Edge Computing Market by End-user, Component, and Geography - Forecast and Analysis 2023-2027

Edge Computing Market Forecast 2023-2027

The Edge Computing Market size is estimated to grow by USD 9.92 billion at a compound annual growth rate (CAGR) of 24.74% between 2022 and 2027. The market's expansion is propelled by various factors, notably the increasing demand for decentralized computing and the escalating limitations of front-end devices. Moreover, optimizing network traffic for sustainable energy usage plays a pivotal role in driving growth. As businesses and consumers alike seek efficient and sustainable solutions, the market is poised to capitalize on these trends. Embracing decentralized computing, addressing device limitations, and promoting energy-efficient network practices are integral to meeting evolving demands and fostering sustainable growth in the market landscape.

What will be the Size of the Market During the Forecast Period?

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The Industrial Internet of Things (IIoT)  technology enables data processing at the source, closer to the point of generation, instead of relying on cloud infrastructure. The NetworKing and Telecommunications industries are major consumers of Edge Computing, as it allows for real-time analysis and decision-making. The CDNs (Content Delivery Networks) also utilize Edge Computing for content delivery and caching. The market is expected to grow exponentially, with the 5G network providing the necessary infrastructure for its implementation. Companies like Artificial intelligence, AR tools,  Google, and Microsoft are investing heavily in this technology. The Secure and Manageable nature of Edge Computing makes it an attractive option for businesses seeking to improve their operational efficiency and reduce latency. The Compute and Processing Units at the edge of the network enable decentralized data processing, making it an essential component of the Internet of Things (IoT)  ecosystem. The future of Edge Computing looks promising, with its potential to revolutionize industries and transform business models.

Market Dynamics

The rising demand for decentralized computing to reduce latency in decision-making is notably driving the market growth, although factors such as competition from low-cost centralized and general-purpose computing infrastructure may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The rising demand for decentralized computing to reduce latency in decision-making is notably driving the market growth. The need for low latency in computing or decision-making tasks is increasing the demand for decentralized solutions. Edge nodes are usually placed a single hop away from the device node, which can save considerable time in reducing the roundabout time between the device and the edge node. 

Many companies have started to provide solutions that can operate independently, without the need for full-time internet access. This allows users to reduce decision-making time in critical applications. For example, Amazon AWS Greengrass solution allows the user to run the computation, data caching, synchronization, and machine learning analytics operations for all locally connected devices without the need for internet connectivity. This type of computing environment also leads to the removal of a single point of failure or choke point for internet traffic. These factors are driving the growth of the market trends.

Significant Market Trend

The deployment of Industry 4.0 infrastructure is a key trend influencing the market growth. Industry 4.0 refers to the use of connected automation systems and technologies, such as cyber-physical systems, IoT devices, cloud computing, and cognitive computing, which can enable large-scale automation in factories. The adoption of these technologies is expected to influence the demand.

Industry 4.0-based manufacturing operations and facilities require several IoT sensors, actuators, and communication tools, which constantly generate data. Edge computing plays an important role in the analysis and implementation of this data in the immediate manufacturing environment in real-time. Hence, the demand is expected to grow with the adoption of Industry 4.0 practices. These factors will support the market growth and trends during the forecast period.

Major Market Challenge

Competition from low-cost centralized and general-purpose computing infrastructure may impede market growth. Centralized computing infrastructure includes cloud data centers, supercomputing facilities, and centralized data centers used by organizations to support their global operations. These facilities can be transformed to provide computing or processing capabilities as a service to anywhere in the world virtually.

Many public/private cloud server operators offer low-cost computing and storage services on a pay-as-you-go basis, which poses a threat to the market. Moreover, setting up infrastructure may require additional capital spending, network infrastructure, and skilled labor for maintenance and operation. Furthermore, some companies provide software-based solutions. These factors will impede the growth of the market during the forecast period.

Key Customer Landscape

The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Customer Landscape

Who are the Major Edge Computing Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Amazon - The company offers mobile edge computing services through Google Distributed Cloud Edge.

The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Alphabet Inc.
• Arrow Electronics Inc.
• Capgemini Service SAS
• ClearBlade Inc.
• Dell Technologies Inc.
• EdgeConneX Inc.
• General Electric Co.
• Hewlett Packard Enterprise Co.
• Huawei Technologies Co. Ltd.
• Intel Corp.
• Nokia Corp.
• NVIDIA Corp.
• Renesas Electronics Corp.
• Schneider Electric SE
• Telefonaktiebolaget LM Ericsson
• Aarna Networks Inc.
• Cisco Systems Inc.
• International Business Machines Corp.
• Microsoft Corp.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Segmentation

In the rapidly evolving technology landscape, one concept that has gained significant traction is Edge Computing. This innovative technology, implemented through devices like Infrastructures, Servers, and Consultants, enables data processing closer to the source, instead of relying on the Cloud. The Networking of these devices forms a crucial part of Edge Computing, allowing for Traffic management and efficient Data transmission. The Telecommunications industry, in particular, benefits from this technology due to its ability to reduce latency and improve response times. The CDNs (Content Delivery Networks) and Functions are essential for delivering content and services in a timely and effective manner. The market is expected to grow significantly, with the On-premises Consumption of Edge Computing services becoming increasingly popular. The implementation of 5G networks will further boost the adoption of Edge Computing, as it provides the necessary bandwidth and low latency for real-time data processing. In conclusion, Edge Computing is a game-changer in the technology industry, offering numerous benefits and driving growth in the market.

By End-User

The market share growth by the industrial manufacturing segment will be significant during the forecast period. Industrial applications mainly focus on the automation of industrial manufacturing and process environments, which make substantial use of industrial IoT devices, automation hardware, and connected sensors and actuators.

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The industrial manufacturing segment showed a gradual increase in the market share of USD 924.93 million in 2017 and continued to grow by 2021. It plays a crucial role in various industries, particularly in automating manufacturing and process environments. Sensors and IoT devices generate vast amounts of data in these industries, necessitating real-time analysis and storage for timely detection of supply chain disruptions, machine failures, and performance issues. Edge computing hardware and infrastructure are essential for large enterprises and SMEs alike, enabling Capex and Opex savings through scalability and flexibility. Multi-CDN designs ensure efficient data processing and distribution. Industries such as manufacturing, oil & gas, healthcare system, retail, IT & telecom, robotics & automation, and automotive benefit significantly from edge computing for predictive maintenance, smart cities, and IoT applications. VOLTA data center solutions cater to the unique needs of small businesses and large enterprises alike, enabling them to harness the power of edge computing technology.

By Component

The IT infrastructure consists of networking hardware, such as processors, servers, switches, and routers, which are essential for running applications in harsh environments. These components should be rugged and high-performing, with resistance to shocks, extreme temperatures, vibrations, and dust. The market is expected to grow significantly due to its advantages in real-time data processing. Key industries, including telecommunications and healthcare system, utilize edge computing for traffic distribution, service management, and software development. Telecom firms and CDNs use edge devices for network functions, while 5G virtualization enables applications like video conferencing software, online consultations, and game streaming. Connected devices, artificial intelligence, and 5G technology require edge computing for security and compliance with industry standards. Manufacturing sectors, including Industrial internet of things (IIoT) 4.0 and smart factories, use AI edge computing for digital health strategies, IoT in healthcare, life sciences applications, and digital developments during the recession. Edge computing is also crucial for AR and VR tools, IoT devices, and applications in healthcare, government and defense, and manufacturing. Latency and data processing are critical factors in the edge computing market, with cloud computing and smart grids also playing significant roles.

Regional Analysis

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North America is estimated to account for 42% of the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

The IT infrastructure sector in North America is experiencing significant growth in the adoption of edge computing, driven by the telecommunications industry and enterprise customers in the US and Canada. This shift is due to the increasing use of big data analytics and IoT, as well as the need to improve IT efficiency in commercial and industrial environments. Key industries, such as healthcare and manufacturing, are prioritizing the implementation of edge computing systems, including AI edge computing and 5G virtualization. Telecom firms and CDNs are also investing in network function virtualization and traffic distribution for improved service management. The use of edge computing is also expanding to sectors like government and defense, and the manufacturing sector, for applications such as smart factories, digital health strategies, and IoT in healthcare. Edge computing is essential for reducing latency and data processing requirements in industries with high-traffic and real-time needs, such as video conferencing software, game streaming, and AR/VR tools. Security and compliance standards are also critical considerations in the implementation of edge computing, particularly in sensitive industries like healthcare and life sciences applications. The recession and digital developments have not hindered the growth, with the market expected to continue expanding with the rollout of 5G technology and the increasing use of connected devices.

Market Analyst Overview

The market is witnessing significant growth, revolutionizing IT infrastructures and networking architectures. It offers businesses enhanced traffic distribution, service management, and software development capabilities, with hardware solutions optimizing deployment models. From AI-driven innovations to 5G integration, diverse industries are leveraging edge computing for operational agility and enhanced performance. M&A activities and technological advancements drive market expansion, emphasizing regulatory scrutiny and compliance standards.

In today's data-driven world, the need for real-time processing and analysis of large volumes of data has given rise to Edge Computing. This technology, which allows data processing and analysis to occur closer to the source, is revolutionizing industries such as healthcare, manufacturing, and transportation. According to a recent report by Grand View Research, the market is expected to grow significantly over the next few years, reaching a value of USD 69.4 billion by 2026. The report attributes this growth to factors such as the increasing adoption of IoT devices, the need for real-time data processing, and the decreasing cost of edge computing infrastructure. Companies such as Microsoft, IBM, and Google are investing heavily in this technology, providing solutions for secure, efficient, and scalable edge computing. The Cloud, Digital, Technology, and Services industries are also expected to play a significant role in the growth of the market. The Industry analysis also shows that the market is expected to be driven by the need for faster response times, lower latency, and increased security. The market is also expected to be segmented by component, application, and region.

Data privacy and security remain paramount, shaping the regulatory framework. The strategic importance extends across end-user industries like healthcare, where digital technologies improve patient record management and enable remote care interventions. In industrial settings, smart factories harness AI for efficient operations. Energy and healthcare sectors particularly benefit, promoting environmental sustainability and enhancing patient care through IoT applications and telemedicine programs.

Segment Overview

The market growth and forecasting report covers market growth by revenue at global, regional, and country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• End-user Outlook
  • Industrial manufacturing
  • Telecom
  • Mobility
  • Government
  • Others

• Component Outlook
  • Hardware
  • Software
  • Services
  • Edge-managed platforms

• Region Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Argentina
    • Brazil
    • Chile

Market Scope
Report Coverage	Details
Page number	185
Base year	2022
Historic period	2017-2021
Edge Computing Market Forecast Period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 24.74%
Market growth 2023-2027	USD 9.92 billion
Market structure	Fragmented
YoY growth 2022-2023 (%)	22.67
Regional analysis	North America, Europe, APAC, South America, and Middle East and Africa
Performing market contribution	North America at 42%
Key countries	US, China, Japan, Germany, and UK
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	Alphabet Inc., Amazon.com Inc., Arrow Electronics Inc., Capgemini Service SAS, ClearBlade Inc., Dell Technologies Inc., EdgeConneX Inc., General Electric Co., Hewlett Packard Enterprise Co., Huawei Technologies Co. Ltd., Intel Corp., Nokia Corp., NVIDIA Corp., Renesas Electronics Corp., Schneider Electric SE, Telefonaktiebolaget LM Ericsson, Aarna Networks Inc., Cisco Systems Inc., International Business Machines Corp., and Microsoft Corp.
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period.
Customization purview	If our market growth analysis report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research and Growth Report?

• CAGR of the market share during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the size of the market and its contribution to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market across North America, Europe, APAC, South America, and Middle East and Africa
• Our market trends and analysis report covers a thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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