Edge Data Center Market Analysis

Edge Data Center Market Overview

The Edge Data Center Market is projected to grow from USD 10.45 billion in 2024 to USD 31.95 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 14.98% during the forecast period (2024 - 2032). Additionally, the market size for Edge Data Center was valued at USD 8.91 billion in 2023. 

A strong inclination towards online services and the escalating data generation in metro areas and remote locations are the key market drivers enhancing market growth.

Edge Data Center Market Trends

As more sectors adopt cutting-edge technologies like the Internet of things, big data, artificial intelligence, cloud, streaming services, and 5G, there is expected to be an increase in the demand for edge data centers globally. Most major players have migrated to evolving data centers that use virtualization and software-defined networks, co-location facilities, public and private clouds, edge clouds, and other technologies. The move toward edge data centers is being made for various reasons, including smart agility, practicality, and affordability. Edge data centers are relatively smaller than large cloud data centers, so they must be close to busy intersections. It has decentralized facilities with power and cooling infrastructure that enable computing and storage in a location closer to where data is generated and/or used.

Edge data centers come in two flavors: mobile and metro. They are typically placed at the base of cell towers, are the size of a shipping container, and offer important support to the IoT (Internet of Things) and autonomous vehicle sectors to boost processing capacity and improve customer experience. Additionally, they are assisting mobile network operators (MNOs) in providing mobile subscribers with faster content services and prefabricated modular edge data centers, perfect for various industries requiring hyper-local computing and storage capability. The demand for edge data center solutions and services is ultimately driven by the high data volumes that these technologies produce in the network, which create new performance and computing demands in the data center. The demand for low operating costs, real-time data analysis, decreased network traffic, improved application performance, and business agility will also hasten market expansion. Thus, driving the edge data center market revenue.

Edge Data Center Market Segment Insights

Edge Data Center Components Insights

The edge data center market segmentation based on components includes hardware, software, and service. The hardware segment dominated the market, The large market share of this segment is attributed to the increasing demand for IoT deployments across various industry verticals for a variety of applications, the growing demand for edge gateways and hyper-converged infrastructure, and the surge in consistent investments from industry players in incorporating edge data solutions in their operations and product or service offerings. However, the software segment is anticipated to record the highest CAGR during the forecast period.

Edge Data Center Service Insights

The edge data center market segmentation, based on service, includes professional service, support and maintenance service. The professional service category generated the most income. Professional services in edge data centers refer to various specialized services created to support the deployment, administration, and upkeep of edge data centers.

These services are targeted at assisting businesses in selecting the best edge data center solution for their particular requirements. Site evaluation, network design, hardware picks, and software setup may all fall under this category.

Edge Data Center Organization Size Insights

Based on organization size, the edge data center market segmentation includes small enterprises and medium enterprises. The medium enterprises segment dominated the market. The market for edge data centers is anticipated to be dominated by large businesses in 2023. The widespread use of cutting-edge technologies like 5G and IoT, which directly impact revenue growth, the increased emphasis on creating strategic IT initiatives, and the regular rollout of solutions to increase businesses' data center capabilities are all credited with the segment's large market share. The edge data centers market is anticipated to expand fastest for small and mid-sized businesses during the projected period.

Edge Data Center Verticals Insights

Based on verticals, the edge data center market segmentation includes banking, IT and telecommunication. The IT and telecommunication segment dominated the market, The adoption of edge data centers by telecommunications companies is responsible for the significant market share of this sector because edge enables them to utilize their geographically distributed infrastructure, which is made up of devices like gateways, smartphones, and other items with built-in storage and computing power. Demand for data services is increasing, as is the number of users generating data traffic, adopting cloud computing, and using high-density networks. This segment is expanding due to the telecom industry's technological advancements, including the development of 5G technology and the spread of IoT-capable devices. The industry segment for healthcare, however, is anticipated to have the highest CAGR during the forecast period.

Edge Data Center Regional Insights

By region, the study provides market insights into North America, Europe, Asia-Pacific and the Rest of the World. The North American edge data center market area will dominate this market, The presence of several important edge computing technology vendors in this area and the early adoption of cutting-edge technologies by a variety of end users are both credited with the region's large market share. Additionally, many businesses in the area are implementing edge data centers to improve their IT infrastructure and take advantage of cutting-edge innovations like 5G and IoT. The region's work on cutting-edge ideas like autonomous vehicles is also anticipated to fuel the edge data centers market growth in North America.

Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Europe’s edge data center market accounts for the second-largest market share because of increased internet use and significant funding from the government for enhancing the IT infrastructure. Further, the German edge data center market held the largest market share, and the UK edge data center market was the fastest-growing market in the European region.

The Asia-Pacific Edge Data Center Market is expected to grow at the fastest CAGR from 2023 to 2032 at the time of the forecast. The growth of end-use industries, the expansion of the IT sector's investment base, and the prevalence of numerous edge computing firms like Huawei Technologies Co. are the main factors driving this region's market for edge data centers, Ltd., including Fujitsu. Moreover, China’s edge data center market held the largest market share, and the Indian edge data center market was the fastest-growing market in the Asia-Pacific region.

Edge Data Center Key Market Players & Competitive Insights

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the edge data center market grow even more. Market participants are also undertaking various strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. The edge data center industry must offer cost-effective items to expand and survive in a more competitive and rising market climate.

Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the edge data center industry to benefit clients and increase the market sector. The edge data center industry has offered some of the most significant advantages in recent years. Major players in the edge data center market, including Huawei Technologies Co. Ltd. (China), Cisco Systems Inc. (U.S.), Elliptical Mobile Solutions (U.S.), Rittal (Germany), and others, are attempting to increase market demand by investing in research and development operations.

Huawei Technologies Co. Ltd. (China), Beijing Huawei Technologies Co. Ltd. 's Shenzhen, Guangdong, China headquarters house this multinational technology company. Ren Zhengfei established it in 1987 with the primary goal of producing phone switches. Since then, though, it has broadened its operations to cover a variety of telecommunications tools and services, including mobile devices, tablets, wireless networks, cloud computing, and artificial intelligence. One of the biggest telecom equipment producers, Huawei is also a significant force in the smartphone industry.

Cisco Systems Inc. (U.S.), Networking giant Cisco Systems, Inc., more commonly known as Cisco, is an American multinational digital communications technology conglomerate corporation headquartered in San Jose, California. In addition to other high-tech services and goods, Cisco develops, produces, and markets networking hardware, software, telecommunications equipment, and other items. With cutting-edge products like Webex, OpenDNS, Jabber, Duo Security, and Jasper, Cisco is a leader in specialized tech markets like the Internet of Things (IoT), domain security, videoconferencing, and energy management. With over $51 billion in annual revenue and close to 80,000 employees, Cisco is one of the biggest technology companies in the world, coming in at number 74 on the Fortune 100.

Key Companies in the edge data center market include

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  Huawei Technologies Co. Ltd. (China)

  
  


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  Cisco Systems Inc. (U.S.)

  
  


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  Elliptical Mobile Solutions (U.S.)

  
  


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  Rittal (Germany).

  
  

Edge Data Center Industry Developments

In July 2023, Dell made an announcement about their collaboration with Airspan to deliver a pre-integrated solution for wireless edge deployments. The solution integrates Airspan’s advanced wireless networking technology and Dell modular data center which offers seamlessness and efficiency in wireless edge deployments.

In july 2023, Siemon launched its new EagleEye Red software for network management of the datacenter LANs. Its multi-tiered network discovery protocols enable quick scanning for all IP based devices within the network hence positioning them in their correct locations.

Flexential announced a substantial expansion of its FlexAnywhere Platform, adding over 110MW Under Development across Atlanta, GA and Hillsboro, OR in 2023.

The recently expanded Dell Private Wireless Program aims to provide secure enterprise connectivity fo edge locations as of June 2023. It supports Airspan and Druid wireless solutions that offer businesses more options on dependable wireless connectivity at the edge.

HPE partnered with Equinix to extend the HPE GreenLake private cloud portfolio within Equinix International Business Exchange (IBX) data centers by June 2023. Pre-provisioning of HPE GreenLa for Private Cloud Enterprise and HPE GreenLake for Private Cloud Business Edition at selected Equinix data centers globally is part of this deal, thus allowing customers access a vast array of private cloud solutions so they can get speed, agility, flexibility, choice hybrid cloud strategy.

NVIDIA rolled out a large-memory Al supercomputer class called NVIDIA DGX in May 2023.The NVIDIA GH200 Grace Hopper Superchips and the NVIDIA NVLink Switch System drive this powerful system. This makes possible development of massive next generation models for generative Al language applications, recommender systems or data analytics workloads.

In May 2023, 365 Data Centers expanded its comprehensive enterprise service capabilities to encompass eight new data center locations and 35 new Points of Presence (POPs). This expansion benefits agents, resellers, and direct customers by providing a unified solution with one Master Service Agreement (MSA), one support team, and one invoice for a full stack offering, including colocation, network, cloud, and IT support services.

Cisco and Leonardo signed an MoU in April 2023 that includes activities supported by dedicated working groups to periodically identify business opportunities and areas of technical cooperation meeting market demands under the following sectors – cybersecurity; secure networking; lot; digital workplace; cloud edge computing.

Edge Data Center Market Segmentation

Edge Data Center Components Outlook

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  Hardware

  
  


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  Software

  
  


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  Service

  
  

Edge Data Center Service Outlook

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  Professional Service

  
  


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  Support Service

  
  


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  Maintenance Service

  
  

Edge Data Center Organization Size Outlook

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  Small Enterprises

  
  


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  Medium Enterprises

  
  

Edge Data Center Vertical Outlook

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  Banking

  
  


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  IT and Telecommunication

  
  

Edge Data Center Regional Outlook