Global edge data centers market to reach $18.1B by 2026

The global edge data centers market to reach US$18.1 billion by the year 2026, according to Global Industry Analysts Inc.

The edge datacenter is a relatively smaller facility that is closely located to the population it serves for delivering resources for cloud computing as also cached content to all end users. The center connects to a bigger center for central data or numerous datacenters typically. By processing services and data closely with end users to the maximum possible extent, edge computing enables organizations in reducing latency and also in improving customer experiences. There is no uniform definition for edge datacenters since they are not one uniform facility.

For instance, some facilities serve both larger cloud services and edge computing. With rising data volumes, latency issues and reduced data processing being witnessed at large datacenters, there is a growing trend towards edge datacenters. In edge applications of datacenters, the fast paced advances being witnessed in the areas of 5G, IoT and IoE are expected to enable movement of computing towards the network edge for achieving better latencies, which will further drive the emergence of new small scale edge datacenters around the world.

AI is an important trend with significant implications for datacenters, as the technology can be vital for resolving challenges such as unplanned downtime particularly those attributed to human error or power and cooling failure. With deep learning and machine learning algorithms offering condition-based maintenance for a datacenter’s critical power infrastructure, datacenters can cut down costs and improve efficiencies related to vital components such as power, cooling and datacenter infrastructure management.

Another notable trend being witnessed is the growing pace at which in-house datacenters are being transformed into 3rd party services providers to derive management and cost-related advantages.

Amid the COVID-19 crisis, the global market for Edge Data Centers estimated at US$9.3 Billion in the year 2022, is projected to reach a revised size of US$18.1 Billion by 2026, growing at a CAGR of 17% over the analysis period. Solutions, one of the segments analyzed, is projected to grow at a 15.9% CAGR to reach US$14.1 Billion by the end of the analysis period.

After a thorough analysis of the business implications of the pandemic and its induced economic crisis, growth in the Services segment is readjusted to a revised 19.8% CAGR for the next 7-year period. This segment currently accounts for a 26.7% share of the global Edge Data Centers market.

The U.S. market is estimated at $4.3 billion in 2022, while China is forecast to reach $1.6 billion by 2026
The Edge Data Centers market in the U.S. is estimated at US$4.3 Billion in the year 2022. The country currently accounts for a 45.7% share in the global market. China, the world’s second largest economy, is forecast to reach an estimated market size of US$1.6 Billion in the year 2026 trailing a CAGR of 17.8% through the analysis period.

Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 14.9% and 14.7% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 15.7% CAGR while Rest of European market (as defined in the study) will reach US$943.9 Million by the close of the analysis period. Growing number of smart city initiatives in countries across the world is also promoting growth for edge computing.

North America dominates the global edge computing market, owing to the rising technology acceptance and adequate presence of large market players and startup firms in developed countries, such as the US. In addition, high disposable income of consumers is anticipated to allow the region to maintain its dominance in the global market for over the coming years.

In Asia-Pacific, the market growth would be primarily driven by the digital boom in countries, such as China, South Korea, Japan, Singapore, India, and Indonesia.

Moreover, rising disposable income and growing penetration of edge computing-based products, such as smart home appliances, electric vehicles, and fitness trackers, are anticipated to growth in the regional market. Asia-Pacific which has been reporting increased cloud traffic is therefore anticipated to emerge as the key market for edge computing solutions as the region shifts to edge computing solutions from cloud computing services.

Governments and business organizations in the region are anticipated to increasingly opt for locally storing as well as processing data. In developed countries of Europe and North America, several smart city initiatives were launched in the recent years and their numbers are growing even across the ME and Asian regions.

These initiatives are leading to increase in edge computing implementation by telecom companies, responsible for the deployment of the necessary networks.

CT Bureau