Edge Data Center Market Overview

Edge computing data centers are small data centers located close to the edge of the network, or closer to end users and devices. Edge data centers are used to deliver cached content, cloud computing resources, and analytics capabilities. 

Content providers, such as video streaming services, often use edge data centers to reduce latency and improve performance. Enterprises can also use edge data centers to improve the performance of their applications and services.

Edge data centers are typically located in co-location facilities, at the base of cell towers, or in other locations where they can be close to end users. Organizations can also deploy edge data centers in modular form factors, such as shipping containers, which can be deployed quickly and easily.

Edge data center deployments are often managed by a service provider, which is responsible for ensuring that the data center meets the needs of its customers.

Benefits of an Edge Data Center

In the right environment and with proper application, edge data centers come with lots of benefits.

Reduce network latency

An edge data center reduces network latency by providing a location that is close to the users. This reduces the time it takes for data to travel from the users to the data center and back again. By reducing the amount of time that data spends traveling, the edge data center can minimize the impact of network latency on the overall user experience.

Boost network processing power

Edge data centers can also boost network processing power by providing additional computing resources in a location that is closer to the end users. This allows for more efficient processing of data and improved overall performance.

Prompt network resiliency

Edge data centers can also provide prompt network resiliency by allowing for the quick deployment of additional computing resources in the event of an outage or other issue. This helps improve the overall reliability and uptime for businesses and their customers.

Enable network scalability

The modular nature of edge data centers also enables easy scalability, allowing businesses to add or remove computing resources as needed – quickly.

Save on IT infrastructure costs

By deploying edge data centers, businesses can reduce their need for physical IT infrastructure at remote locations, leading to cost savings.

Allow for customizability

Edge data centers can also be customized to meet the specific needs of a business or industry, allowing for more tailored and efficient deployments.

Boost network security

By deploying edge data centers, businesses can also improve network security by reducing the amount of sensitive data that travels across public networks.

Also see: Best Network Management Solutions 

Edge Data Center Market Size and Trends

The edge data center market is growing rapidly, with a predicted compound annual growth rate of 25.3% from 2022 to 2030, reaching a market size of $64.09 billion by 2030.

This growth is driven by increased demand for improved performance and reduced latency in industries such as video streaming, online gaming, and the Internet of Things (IoT). And with the rapid rollout and uptake of 5G, edge data centers are also becoming more widespread, with edge deployments being found in industries such as healthcare, retail, and government.

Key edge data center market segmentation

The global edge data center market is segmented on the following basis:

  • Components: By component, the market is divided into solutions and services. The solution component is currently the most dominant as edge data centers continue to grow worldwide. Examples of edge data center solutions include uninterruptible power supply (UPS), cooling, fire detection and suppression, access control and remote monitoring, and power distribution units. The services component includes installation, training, and maintenance services.
  • Organization: The edge data center market is also segmented by organization, including small and medium-sized enterprises (SMEs) and large enterprises.
  • Application: By application, the edge data center market is segmented into various categories, including retail; banking, financial services, and insurance (BFSI); logistics and transportation; healthcare; government; IT and telecom; media and entertainment; manufacturing; and others such as education and energy.
  • Geography: The edge data center market is divided by geographic regions, with the Americas currently being the largest market for edge data centers and the Asia Pacific region predicted to have the highest growth rate.

Also see: Best IoT Platforms for Device Management

Edge Data Centers vs. Traditional Data Centers

Smaller footprint and lower power usage

Edge data centers typically have a smaller footprint and lower power usage compared to traditional data centers, as they are designed for efficiency and modularity. As a result, edge data centers also often have a higher power usage effectiveness (PUE) rating, which measures the overall efficiency of a data center’s energy usage.

More distributed network

Edge data centers are more distributed in their network, with multiple edge locations rather than centralizing computing resources in one location.

Size

Edge data centers can vary in size, from small modular units to larger facilities. Traditional data centers are typically larger and more centrally located.

Data type

Edge data centers are often used for handling time-sensitive or high-bandwidth data, such as the streaming of live video or IoT data. Comparatively, traditional data centers often handle less time-sensitive and lower-bandwidth data, such as email storage or website hosting.

Deployment

Edge data centers can be quickly deployed in a variety of locations, such as on the premises of a business or at a provider’s edge location. Traditional data centers are often stationary, with long lead times for deployment and construction.

Edge Data Center Use Cases

Edge data centers are becoming increasingly popular as businesses look for ways to improve network performance, enhance security, and enable new technology applications. Here are some examples of how edge data centers are being used in various industries.

Retail

In the retail industry, edge data centers are being used to process customer data in real time so that retailers can offer personalized experiences and recommendations. This is possible because edge data centers allow for low-latency data processing and fast connectivity to retail point of sale (POS) systems.

Banking, financial services, and insurance

Edge data centers are also being used in the banking, financial services, and insurance industries to improve fraud detection and prevention. By processing data closer to where it is generated, these industries can reduce the risk of data breaches and protect sensitive customer information.

Logistics and transportation

In the logistics and transportation industry, edge data centers are being used to track shipments in real time, which helps businesses optimize delivery routes and reduce costs. Additionally, edge data centers can be used to monitor environmental conditions during transport, so delicate shipments can be protected from extreme temperatures or humidity.

Health

In the health industry, edge data centers are being used to store and process patient data. This is important because it allows for faster access to medical records in emergencies. Additionally, by storing patient data locally, healthcare providers can comply with strict regulations regarding the handling of personal health information (PHI).

IoT

Edge data centers are also playing a role in the IoT industry by providing the processing power and storage capacity needed to support billions of connected devices. By bringing compute and storage resources closer to the edge of the network, IoT applications can benefit from improved performance and reduced latency.

Telecommunications companies

Telecommunications companies are using edge data centers to offload traffic from their networks and improve customer experience. By storing content closer to users, telecom companies can reduce congestion on their networks and deliver faster speeds for customers who are streaming video or using other bandwidth-intensive applications.

5G

5G is a new generation of wireless technology that promises higher speeds and lower latency than previous generations. To take advantage of 5G’s potential, telecom companies are deploying edge data centers at cell towers across the world. By processing traffic closer to users, telecom companies can provide an enhanced experience for customers using 5G-enabled devices.

Autonomous vehicles

Autonomous vehicles generate large amounts of data that need to be processed in real time, so the vehicle can make decisions about its next move. Edge data centers can provide the low-latency connectivity needed to support autonomous vehicles by bringing compute resources closer to the edge of the network.

Smart factories

Smart factories are using edge computing to process sensor data in real time, so they can make adjustments to production lines on the fly. This allows factories to become more agile and responsive to changes in demand while reducing waste and increasing efficiency.

Also see: Top Managed Service Providers

Top Trends in the Edge Data Center Market

With distributed computing, edge data centers place compute power, storage, or networking where it is most needed. If self-driving cars are to be successful, they will require edge data centers all along highways and at intersections. Also, new telecom services such as 5G consume so much power that a central data center cannot support them well.

Against this background, we can identify some edge data center market trends as vendors seek to address market demands:

  • Miniaturization: Edge data centers are designed to be smaller and more modular, allowing them to fit into a variety of locations and adapt to changing needs. They are also running more on commodity hardware and can quickly scale up storage and bandwidth.
  • Software-Defined: Edge data centers increasingly rely on software-defined infrastructure, allowing for greater flexibility in resource allocation and ease of management.
  • Data Center Anywhere: Thanks to mobile edge data centers, compute resources can be deployed virtually anywhere, whether it’s a temporary event or an industrial facility.
  • 5G Necessity: As 5G becomes more prevalent, edge data centers will become increasingly necessary to support its high bandwidth demands.
  • More Density, Less Power: Edge data centers are also becoming more efficient in their power usage, allowing for greater compute density in a smaller form factor.

Overall, edge data centers offer exciting opportunities for businesses to improve performance, reduce latency, and better serve their customers. As the demand for distributed computing continues to grow, we can expect to see further innovation and adoption of edge data centers in the market.

Also see: Trends Shaping the Future of IoT

Kihara Kimachia
Kihara Kimachia
Kihara Kimachia has been a writer and digital marketing consultant for more than ten years. He has a great passion for technology and currently works freelance for several leading tech websites.

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