Edge Computing Market Analysis by Region, IT Infrastructure (Hardware, Software and Services), Application, Vertical and Employee Size Band Forecast to 2026
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Edge Computing Market Report Overview
The edge computing market size is expected to be valued at $13.9 billion in 2023 and is expected to grow at a CAGR of 16.6% over the forecast period The increasing adoption of the internet of things (IoT) and 5G technology is expected to bode well for market growth over the forecast period. Furthermore, investments by telecom companies for the modernization of networks are anticipated to drive market growth over the next few years.
Edge computing has witnessed significant growth since the pandemic outbreak due to the increased demand for low latency for different applications, including manufacturing, gaming, online streaming, and more. Although several old and new IT workloads are migrating to the cloud, enterprises are keen on placing computing resources closer to the data creation hub to ensure fast processing and transfer. Edge computing enables enhanced distribution of computing power, making it an area of interest for cloud service providers, IT companies, and telecom vendors, thereby fueling edge computing deployments.
To enhance data processing and maximize application performance, businesses are progressively embracing hybrid cloud and edge computing architectures. By combining the resources of the cloud with the capabilities of edge computing, organizations can harness the advantages offered by centralized cloud infrastructure and distributed edge networks. This collaborative approach not only optimizes operations but also contributes to the overall expansion of the market.
The introduction of 5G networks brings about enhanced speeds of data transmission and reduced latency, making it a perfect tool for edge computing. The increasing collaboration of edge computing with 5G paves the way for faster and effective data processing, offering a wide range of new applications and services, thereby aiding growth to the overall market.
By leveraging edge computing, organizations can effectively lower operational expenses related to data transmission, storage, and cloud computing resources. By conducting local data processing and analysis, businesses can optimize their infrastructure and reduce their dependency on premium centralized cloud resources, thereby achieving effective cost savings and making an attractive investment for the companies.
Edge Computing Market Outlook, 2019-2026 ($ Billion)
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Edge computing has applications in many use cases such as smart grids, self-driving cars, AI, machine learning, augmented reality, virtual reality, video conferencing, cloud gaming and others. These use cases are emerging in nature and have immense potential for growth and hence are expected to contribute to the growth of edge computing market.
The rapid surge of IoT devices has resulted in generation of huge volume of data that requires real-time processing and analysis. Edge computing empowers IoT devices to conduct localized data processing and analysis, effectively reducing latency and minimizing network bandwidth demands, thereby driving the market demand and growth.
The COVID-19 disruptions have accelerated the adoption of edge computing across industries. For example, a large proportion of the global population now relies on online and video conferencing technologies for homeworking, remote schooling, shopping, entertainment, and staying in contact with others. This has increased the pressure on network infrastructure and created a demand for edge computing. Also, the need to automate processes in manufacturing, retail, and other industries contributed to market growth.
The edge computing market research report provides an executive-level overview of the current edge computing market worldwide, with detailed forecasts of key indicators up to 2026. Published annually, the report provides a detailed analysis of the near-term opportunities, competitive dynamics, and evolution of demand by product/service type and verticals across the large enterprise and micro, small & medium enterprise (MSME) markets, as well as a review of key market and technology trends.
| Market Size 2023 | $13.9 billion |
| Market Size 2026 | $22.2 billion |
| CAGR | 16.6% from 2022 to 2026 |
| Forecast Period | 2022-2026 |
| IT Infrastructure Segment | Hardware, Software, and Services |
| Hardware Segment | Edge Data Centers, Telco Edge Solutions, Edge Gateway Hardware, Enterprise Edge Hardware, Device Edge |
| Software Segment | Edge Software (Others), Edge Software/Platforms, Edge Aggregation & Orchestration |
| Services Segment | Edge Integration Services, Managed Edge Services, IoT Edge/Edge Gateways Connectivity |
| Vertical Segments | BFSI, Manufacturing, Information Technology, Communication, Government, and Others. |
| Application Segments | Smart Cities, AR/VR, Content Delivery Networks, IIoT, Remote Monitoring, Others |
| Employee Size Band Segments | Micro (Less than 50), Small (51-250), Medium (251-1000), Large (1001-4999), Very Large (5000+) |
| Leading Companies | Microsoft Corporation, IBM Corporation, Hewlett Packard Enterprise Co, Dell Technologies Inc, Cisco Systems Inc, Amazon, Intel Corporation, Huawei Technologies Co. Ltd, Telefonaktiebolaget Lm Ericsson, EdgeConnex |
Edge Computing Market Segmentation by IT Infrastructure
Based on IT infrastructure, the market has been categorized into hardware, software, and services. The hardware segment is expected to be the fastest-growing segment over the forecast period. The market is driven by an increase in demand for edge computing products/solutions that offer benefits such as improved performance, low latency, cost savings, real-time data processing, and others.
Edge Computing Market Share by IT Infrastructure, 2023 (%)
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Furthermore, the hardware segment will account for the highest market share by 2023 and is expected to dominate the edge computing market over the forecast period. The large market share can be attributed to investments by companies in edge computing hardware as they look to improve data processing, enhance data security, and reduce costs.
The volume of data generated by enterprises is increasing rapidly and there is a need for local processing of data to reduce burden on data centers and cloud. As a result, companies are investing heavily in edge computing hardware. Further, in response to the growing demand for edge computing, hardware manufacturers are actively designing specialized solutions that cater to its unique requirements. These customized solutions encompass a range of features, including robust hardware capable of withstanding harsh conditions, low power devices for enhanced energy efficiency, and hardware equipped with built-in security features to safeguard sensitive data. The availability of dedicated hardware specifically designed for edge computing greatly simplifies the deployment and scalability of edge infrastructure, aiding to the growth of the segment.
Edge Computing Market Segmentation by Hardware
The hardware market has been categorized into edge data centers, telco edge solutions, edge gateway hardware, enterprise edge hardware, and device edge. The edge data centers segment is expected to be the fastest-growing segment over the forecast period. The increasing need for businesses to transfer data from private servers to the cloud is expected to drive this growth.
Furthermore, the edge data centers segment is expected to account for the highest market share by 2023 and is expected to dominate the hardware market in the coming years. This can be attributed to the widespread use of edge data centers in many applications such as manufacturing, BFSI, and others. Edge data centers address the unique requirements across various industries and facilitate the incorporation of applications such as remote patient monitoring (RPM), industrial IoT, customized retail experiences, autonomous vehicles, and real-time city management. Through the utilization of edge data centers, businesses can effectively minimize bandwidth consumption by conducting data processing, filtering, and storage at the edge itself. This strategic optimization contributes to the alleviation of network congestion and leads to a reduction in operational expenses linked to data transmission.
With increasing demand, companies are increasingly investing in new edge data centers. For instance, in March 2022, DE-CIX partnered with EdgeConnex to expand its edge data center presence in the USA and Spain.
Edge Computing Market Share by Hardware, 2023 (%)
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Edge Computing Market Segmentation by Software
The software market has been categorized into edge software (others), edge software/platforms, edge aggregation & orchestration. The edge software (others) segment is expected to be the fastest-growing segment with a CAGR exceeding 15% over the forecast period. Edge software (others) includes offerings such as analytics and API software, operating system, edge security application software and others which are critical to the operation of edge networks and need continuous development.
Edge Computing Market Share by Software, 2023 (%)
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The edge software (others) segment will be followed by the edge software/platforms segment over the forecast period. This growth is expected to be driven mainly by applications such as industrial IoT, industry 4.0 and other digital initiatives. The widespread integration of IoT devices and connected devices across various sectors has resulted in a significant surge in volume of data. Edge software enables the handling, analysis, and processing of this data at the edge, guaranteering its prompt and efficient utilization. The capability to manage diverse streams of IoT data and seamlessly integrate with edge devices is aiding to the demand for edge software.
Edge Computing Market Segmentation by Service
The services market has been categorized into edge integration services, managed edge services, and IoT edge/edge gateways connectivity. The managed edge services segment is expected to be the fastest-growing segment over the forecast period. Managed edge services enable edge computing customers to focus on core business operations instead of having to spend huge capital and resources in managing edge infrastructure. Further, managed edge services can help optimize costs associated with edge infrastructure by offering scalability and flexibility in edge computing incorporation. It is capable of providing the necessary software and expertise to scale edge computing computing resources based on fluctuating demands and business requirements. Further, it enables the organizations to modify edge devices, capacity, and alter changing workloads without significant upfront investments.
Edge Computing Market Share by Service, 2023 (%)
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However, edge integration services will be the largest segment accounting for over 40% market share by 2023. The market share of edge integration services is high as edge computing is a relatively new technology and companies looking to adopt this technology would need assistance in terms of advisory, deployment, procurement, and post deployment services.
Edge Computing Market Segmentation by Employee Size Band
The Very Large segment encapsulates those enterprises whose workforce strength is over 5,000 headcounts. The segment captures over 25% of the market and continues to dominate the market over the forecast period. Rapid digital transformation in business operations and high financial capabilities to upgrade network infrastructure to streamline business functions are anticipated to drive the market over the forecast period.
Edge Computing Market Share by Employee Size Band, 2023 (%)
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The Micro segment is expected to grow slightly faster than the remaining segments at a CAGR exceeding 15% over the forecast period. However, considering the current scenario, low seed funding from investors to startups owing to a high degree of uncertainty over the global recession is expected to be one of the bottlenecks for market growth over the forecast period.
Edge Computing Market Segmentation by Vertical
Based on the vertical, the edge computing market has been categorized into BFSI, manufacturing, information technology, communication, government, and others. Among these, BFSI, manufacturing, information technology, communication and government will be accounting a substantial market share by 2023.
The BFSI segment is expected to capture the highest market share by 2023. Large-scale adoption of edge computing to improve data processing and data security in retail banking, financial markets, and the insurance sector are the factors that favor market growth over the forecast period. Furthermore, the need for businesses to reduce costs in terms of network consumption and cloud storage is further expected to accelerate market growth over the forecast period.
Edge Computing Market Share by Vertical, 2023 (%)
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The manufacturing segment is also one of the lucrative markets for edge computing. The application areas include interconnected sensors on factory floors, remote monitoring of equipment, predictive maintenance, and others. The COVID-19 disruptions have further resulted in manufacturing companies adopting edge computing to tackle challenges faced during the pandemic. For example, edge computing enabled companies to work with a reduced workforce as governments imposed strict social distancing rules.
Edge Computing Market Segmentation by Application
Based on application, the edge computing market has been categorized into smart cities, AR/VR, content delivery networks, IIoT, remote monitoring, and others. The Industrial Internet of Things (IIoT) segment set to capture the highest market share by 2023. The large market share can be attributed to the large-scale adoption of edge computing to improve performance and latency, and reduce costs in the internet of things (IoT) applications.
Edge Computing Market Share by Application, 2023 (%)
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The AR/VR segment is expected to be the fastest-growing segment over the forecast period. This growth can be attributed to increasing investments in the development of augmented reality and virtual reality applications. Large companies such as Meta and Microsoft are actively working within the Metaverse space which is a virtual world that can be accessed using AR and VR technologies.
Edge Computing Regional Insights
The edge computing market in North America is being led by the US which captured a sizeable revenue share of the overall demand in 2023. Further, the US edge computing market witnessed faster growth than Canada. Factors like, IoT expansion, latency-sensitive applications, and increasing adoption of hybrid cloud and edge architectures aid to the market growth in the country. Further, in terms of verticals, the BFSI industry accounted for the highest share in the edge computing market in the region, followed by communication and IT industries. On the other hand, in terms of product, edge data centers and edge software platforms dominated the North American edge computing market.
Asia-Pacific emerged as the second largest market in terms of edge computing demand in 2023. The Asia Pacific region is witnessing a rapid pace of digital transformation across industries. As organizations adopt emerging technologies like IoT, AI, and 5G, the need for edge computing infrastructure to process and analyze data closer to the source has become crucial. Edge computing enables faster data processing, reduces latency, and enhances overall performance, supporting the region’s digital transformation initiatives. In terms of verticals, the regional market is led by manufacturing industry, followed by BFSI and IT industries. Further, in terms of product, edge data centers and edge software platforms accounted for the highest market share in the region.
Edge Computing Market - Competitive Landscape
The edge computing landscape is a moderately fragmented market with globally recognized players such as Microsoft Corporation, IBM Corporation, Hewlett Packard Enterprise Co, Dell Technologies Inc, and Cisco Systems Inc, among others. Strategies and business models are still in the early stages of development and are likely to undergo significant transformation as the market for edge computing evolves and matures. The market witnessed an increase in deals and partnerships over the last two years. For instance, in February 2022, Akamai Technologies announced plans to acquire Linode, an infrastructure-as-a-service (IaaS) provider. In February 2022, IBM partnered with AT&T to develop solutions for enterprise clients using 5G wireless networking and edge computing.
Leading Players in the Edge Computing Market
- Microsoft Corporation
- IBM Corporation
- Hewlett Packard Enterprise Co
- Dell Technologies Inc
- Cisco Systems Inc
- Amazon
- Intel Corporation
- Huawei Technologies Co. Ltd
- Telefonaktiebolaget Lm Ericsson
- EdgeConnex
Other Edge Computing companies include
Nvidia Corp, Alibaba Group Holding Ltd, Oracle Corp, Verizon Communications Inc, AT&T Inc, Vmware Inc, Hitachi Ltd, Capgemini, Telstra Corp Ltd, Nokia Corp, Fujitsu Ltd, and others.
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Edge Computing Market Scope
GlobalData Plc has segmented the edge computing market report by IT infrastructure, hardware, software, services, vertical, application, enterprise size band, and region:
Edge Computing Market – Revenue Opportunity Forecast, by IT Infrastructure segments 2019-2026 (US$ million)
- Hardware
- Software
- Services
Edge Computing Market – Revenue Opportunity Forecast, by Hardware segments 2019-2026 (US$ million)
- Edge Data Centers
- Telco Edge Solutions
- Edge Gateway Hardware
- Enterprise Edge Hardware
- Device Edge
Edge Computing Market – Revenue Opportunity Forecast, by Software segments 2019-2026 (US$ million)
- Edge Software (Others)
- Edge Software/Platforms
- Edge Aggregation & Orchestration
Edge Computing Market – Revenue Opportunity Forecast, by Services segments 2019-2026 (US$ million)
- Edge Integration Services
- Managed Edge Services
- IoT Edge/Edge Gateways Connectivity
Edge Computing Market – Revenue Opportunity Forecast by Vertical Industry Segments, 2019-2026 (US$ million)
- BFSI
- Manufacturing
- Information Technology
- Communication
- Government
- Others
Edge Computing Market – Revenue Opportunity Forecast by Application Segments, 2019-2026 (US$ million)
- Smart cities
- AR/VR
- Content Delivery Networks
- IIoT
- Remote Monitoring
- Others
Edge Computing Market – Revenue Opportunity Forecast by employee size band, 2019-2026
- Micro (Less than 50)
- Small (51-250)
- Medium (251-1000)
- Large (1001-4999)
- Very Large (5000+)
Edge Computing Market – Revenue Opportunity Forecast by Regions, 2019-2026 (US$ million)
- Asia Pacific
- China
- Japan
- India
- South Korea
- Australia
- Rest of Asia Pacific
- North America
- US
- Canada
- South & Central America
- Brazil
- Mexico
- Argentina
- Chile
- Colombia
- Rest of South & Central America
- Western Europe
- Germany
- United Kingdom
- France
- Italy
- Netherlands
- Rest of Western Europe
- Central & Eastern Europe
- Russia
- Turkey
- Rest of Central & Eastern Europe
- Middle East & Africa
- United Arab Emirates
- South Africa
- Saudi Arabia
- Kuwait
- Qatar
- Rest of Middle East & Africa
Scope
The market intelligence report provides an in-depth analysis of the following –
- Edge computing market outlook: analysis as well as historical figures and forecasts of revenue opportunities from the hardware, software, and services.
- Edge computing market outlook: analysis as well as historical figures and forecasts of revenue opportunities from the key vertical industry segments.
- Edge computing market outlook: analysis as well as historical figures and forecasts of revenue opportunities from the key application segments.
- Edge computing market outlook: analysis as well as historical figures and forecasts of revenue opportunities by employee size band.
- Company snapshots: snapshots of leading companies in the edge computing market.
- Underlying assumptions behind our published base-case forecasts, as well as potential market developments that would alter, either positively or negatively, our base-case outlook.
Reasons to Buy
- This market intelligence report offers a thorough, forward-looking analysis of the edge computing market and key opportunities in a concise format to help executives build proactive and profitable growth strategies.
- Accompanying GlobalData’s Forecast products, the report examines the assumptions and drivers behind ongoing and upcoming trends in global edge computing markets.
- The report also highlights key IT infrastructure segments (Hardware: Edge Data Centers, Telco Edge Solutions, Edge Gateway Hardware, Enterprise Edge Hardware, Device Edge; Software: Edge Software (Others), Edge Software/Platforms, Edge Aggregation & Orchestration; Services: Edge Integration Services, Managed Edge Services, IoT Edge/Edge Gateways Connectivity), vertical industries (BFSI, Manufacturing, Information Technology, Communication, Government, Others), application (Smart cities, AR/VR, Content Delivery Networks, IIoT, Remote Monitoring, Others) and employee size band (Micro, small, medium, large, and very large)
- With more than 20 charts and tables, the report is designed for an executive-level audience, boasting presentation quality.
- The report provides an easily digestible market assessment for decision-makers built around in-depth information gathered from local market players, which enables executives to quickly get up to speed with the current and emerging trends in edge computing markets.
- The broad perspective of the report coupled with comprehensive, actionable detail will help edge computing hardware & software vendors, service providers, and other players succeed in the growing edge computing market globally.
Key Players
Microsoft CorporationIBM Corporation
Hewlett Packard Enterprise Co
Dell Technologies Inc
Cisco Systems Inc
Amazon.com Inc
Lenovo Group Ltd
Inspur Software Co Ltd
Intel Corporation
Huawei Technologies Co. Ltd
Telefonaktiebolaget Lm Ericsson
EdgeConnex
Table of Contents
Table
Figures
Frequently asked questions
-
What will be the edge computing market size in 2023?
The edge computing market size will be valued at $13.9 billion by 2023.
-
What is the edge computing market growth rate?
The edge computing market is expected to grow at a CAGR of 16.6% during the forecast period 2022-2026.
-
What are the key edge computing market drivers?
A significant increase in the adoption of the internet of things (IoT), investments in network modernization, and the introduction of 5G technology are stimulating the edge computing market growth.
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What are the key edge computing market segments?
IT Infrastructure Segment: Hardware, Software, and Services
Hardware Segment: Edge Data Centers, Telco Edge Solutions, Edge Gateway Hardware, Enterprise Edge Hardware, Device Edge
Software Segment: Edge Software (Others), Edge Software/Platforms, Edge Aggregation & Orchestration
Services Segment: Edge Integration Services, Managed Edge Services, IoT Edge/Edge Gateways Connectivity
Vertical Segments: BFSI, Manufacturing, Information Technology, Communication, Government, and Others.
Application Segment: Smart cities, AR/VR, Content Delivery Networks, IIoT, Remote Monitoring, Others
Employee Size Band Segment: Micro (Less than 50), Small (51-250), Medium (251-1000), Large (1001-4999), Very Large (5000+)
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Which are the leading edge computing companies?
The leading companies in the edge computing market are Microsoft Corporation, IBM Corporation, Hewlett Packard Enterprise Co, Dell Technologies Inc, Cisco Systems Inc, Amazon, Intel Corporation, Huawei Technologies Co. Ltd, Telefonaktiebolaget Lm Ericsson, and EdgeConnex.
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Is there a third level of segmentation in the report?
GlobalData’s focus is on providing reliable and accurate data that is supported by robust research methodology. Our reports undergo rigorous quality checks and are based on primary and secondary research sources, ensuring that the numbers and insights provided are trustworthy. However, despite the best efforts to gather comprehensive data, there could be instances where the available data is limited, making it challenging to provide third level segmentation. In such cases, GlobalData may choose to provide high-level insights and general trends rather than forcing segmentation that may not be backed by sufficient data. This approach ensures that the report’s overall quality and credibility are maintained.
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