San Francisco, 30 January 2030: The Report Edge Data Center Market Size, Share & Trends Analysis Report By Component (Solution, Service), By Facility Size (Small & Medium, Large), By End-use (BFSI, Government), By Region, And Segment Forecasts, 2023 - 2030

The global edge data center market size is expected to reach USD 34.91 billion by 2030 and is set to expand at a CAGR of 18.4% from 2023 to 2030, according to a new report by Grand View Research, Inc. Increasing adoption of Internet of things across various end-use industries, the rapid growth of mobile and IoT applications, and the rising popularity of online streaming and e-commerce services are major drivers of market growth. It is anticipated that factors including the increasing adoption of 5G technology to improve communication, rising spending on data center technology, increasing demand to reduce data center complexity, and development in the AR/VR technology, will also contribute to the market's growth.

Moreover, COVID-19 has increased the penetration of technologies such as 5G, IoT, cloud, and edge computing. Owing to the global adoption of the work-from-home policy, the demand for edge data centers has witnessed a remarkable rise during the pandemic period. The pandemic has forced the major workforce to work remotely, which has resulted in a growing number of companies investing additional resources in IT services. The need for data centers has increased over the past few years as a result of this expanding digitization.

The companies in the edge data center industry have been involved in various strategic initiatives to gain better traction in the market. For instance, in March 2023, AtlasEdge announced a partnership with PacketFabric to offer customers cloud connectivity. The partnership would enable AtlasEdge to use PacketFabric’s TruNaaS Converge Platform. PacketFabric has deployed high availability 100GB private network in 2 locations AtlasEdge which are in Hamburg and Berlin. This initiative has helped enable companies to reach a wider audience, thereby driving the growth of the edge data center industry.

As edge data centers are typically smaller than centralized data centers, their scalability is limited. This can be a major limitation for applications that demand a high level of scalability, such as cloud-based apps or data-intensive workloads. However, edge data centers are expected to develop in the anticipated period because they are well-positioned to meet the growing demand for localized computing and storage resources, as well as upcoming technologies such as 5G and IoT. Edge data centers can assist in improving speed, reducing latency, and providing greater security, making them an essential component of the digital infrastructure.

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Global demand for edge data centers is expected to increase as more industries are adopting emerging technologies such as the Internet of Things (IoT), big data, artificial intelligence, cloud, streaming services, and 5G. These technologies generate a high volume of data in the network, creating new performance and computing demands for data centers, which is ultimately driving the demand for edge data center solutions and services. In addition, the demand for low operating costs, real-time data analysis, reduced network traffic, improved application performance, and business agility will accelerate the growth of the edge data center industry.

Edge Data Center Market Report Highlights

• By component, the solution segment accounted for the major revenue share of 87.7% in 2022. It is anticipated to maintain its dominance over the forecast period. Increased use of hardware and software solutions such as analytics, networking equipment, DCIM, IT racks, enclosures, and power and cooling systems in data centers is attributed to the market growth
• By service, the professional segment is projected to occupy the largest share of the edge data center industry in 2022. The same trend is expected to continue its dominance over the forecast period. The growth of the professional segment can be attributed to the rising demand for the large number of companies offering professional services
• The small & medium facility size is expected to witness the highest growth rate of 19.2% during the forecast period. Small and medium facility segment includes facilities with 1 to 12 racks, with a power draw of 8 to 12 kW/rack. They are ideal for reducing space, deploying quickly, and offering ways to cut costs. Edge data centers are designed to be smaller and more localized than standard data centers
• In terms of the end-use industry, the IT & telecom segment accounted for the major revenue share of 39.6% in 2022. It is anticipated to maintain its dominance over the forecast period. The rapidly growing IT and telecom industry across the globe is creating more demand for edge data centers
• North America held the highest market share of 33.1% in 2022. It is expected to retain its position over the forecast period. The high adoption of edge data center solutions and services in this region is the major driving factor behind the market growth.North America's growth is attributed to the growing adoption of edge data centers for various factors, including the requirement to serve future technologies such as 5G, IoT, and AI, which demand low latency and high bandwidth connections

The COVID-19 pandemic had a positive impact on the edge data center market. Increased corporate awareness regarding the benefits of edge computing services, increased pressure to provide more secure and robust IT environments, as well as the establishment of local data centers throughout the regions, have all contributed to the data center industry growth. In addition, the growing popularity of over-the-top (OTT) platforms and e-commerce has promoted the utilization of edge data centers. To provide an optimal user experience, OTT services such as Netflix, Disney+, and Amazon Prime rely on fast and reliable content delivery.

Edge data centers can provide localized processing and storage resources that minimize latency and increase performance, ensuring customers have a seamless streaming experience. For instance, e-commerce platforms such as Amazon.com Inc, Alibaba Group Holding Limited, and Walmart rely on timely and dependable customer delivery. Edge data centers can help support these platforms by offering localized processing and storage resources, which reduce delivery times and enhances inventory management.

For instance, in October 2021, Schneider Electric, an automation and energy management company, introduced a new range of edge data center solutions. These solutions include pre-integrated small data centers that are easy to set up and can be deployed in a wide range of settings, including branch offices, production floors, and remote sites.

Edge Data Center Market Report Scope

Edge data centers reduce latency by managing and storing data closer to the edge by facilitating real-time data processing applications such as industrial automation, autonomous automobiles, and video streaming. Several AI applications, such as speech and image recognition, machine learning, and natural language processing, are being implemented by edge data centers. Organizations aim to enhance speed and cut costs by processing data closer to the edge, thereby reducing the amount of data that needs to be transmitted to central data centers for processing.

For instance, in May 2022, Dell Technologies submitted results to ML Perf Inference v2.0 benchmark suite that provides solutions for measuring how fast systems operate in various deployment scenarios. The Dell PowerEdge XR 12 and PowerEdge XE2420 servers are designed for workloads that involve edge computing. The design criteria are based on real-world scenarios such as severe dust, heat, and vibration from factory floors. This server is created for high-performance edge applications including streaming analytics, manufacturing logistics, 5G cell processing, and other AI applications. To address the demand for low-latency data processing and edge computing capabilities, several companies are introducing new products and services in the edge data center industry, which is expected to expand rapidly in the forecasted period.

Health safety compliances and mandatory containment measures have put huge pressure on remote operations in several industries, such as automotive, manufacturing, retail, and logistics. For instance, numerous automotive companies, such as Fiat Chrysler, Ford, and GM, had shut down their centers and operations across Europe and North America. This has resulted in the demand for edge computing solutions to support remote monitoring across these industries.

North American edge data centers are expanding significantly because of the rising demand for data processing and storage that is more rapid and reliable. In North America, several large companies, including Equinix Inc., EdgeConneX Inc., and vXchnge, are making significant investments in edge data centers. For instance, with a focus on delivering localized data processing and storage capabilities, Equinix, Inc. has been growing its edge data center presence across the U.S. Additionally, there has been an increase in the use of modular data centers, which are ideal for edge computing applications as they can be quickly deployed and easily scaled.