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From $5.3 billion in 2019, the global edge data center market size is predicted to reach $53.1 billion by 2030, at a CAGR of 25.4% during 2020–2030. The major factors behind the growing edge data center industry are the commercialization of 5G, increasing adoption of internet of things (IoT) devices, and rising mobile data traffic and over-the-top (OTT) traffic across the globe.
The COVID-19 pandemic has increased the demand for edge data centers, owing to the significant adoption of the work-from-home policy worldwide, but halted the deployment of new edge data centers across the globe. No labor availability and reduction in the raw material supplies are the major factors behind the reduced edge data center construction activities during the COVID-19 period. However, the pandemic will have a positive impact on the edge data center market in the long run, due to the increasing digitization rate.
The solutions bifurcation, under segmentation by component, held the major share in the edge data center market in 2019, as the deployment of edge data centers is increasing worldwide. Within the solutions bifurcation, the power & uninterruptible power supply (UPS) category held the largest revenue share in 2019, due to the omnipresent need for prime and backup power at data centers. In addition, the increasing investments in research & development for advanced UPS technologies, as well as numerous benefits of such devices, such as reliable power backup, equipment protection against power fluctuations, and higher efficiency, are further projected to drive the category growth in the years to come.
On the basis of organization, the large enterprises category holds the larger edge data center market share, currently, owing to the rising investments and deployment of edge data centers among such companies. Besides, small & medium enterprises (SMEs) are expected to witness a rapid adoption of edge data centers in the years to come, as SME’s become more digital and offer online services, which require data-intensive applications. This can be attributed to the increasing investments in IT facilities and shift toward digitization across the globe. Hence, edge data centers are expected to be a complete data center solution for SMEs.
In the near future, the demand for edge data centers is expected to be highest in the banking, financial services, & insurance (BFSI) category, based on application. The increasing focus of financial institutions on having a robust IT infrastructure, along with the rising need for securely storing and processing the consumer data, is expected to be the key factor driving the category growth over the upcoming years. In 2019, the global BFSI industry spent more than 10% of its revenue on IT solutions and services. The strong need to allow customers to transact securely and collect real-time data is further projected to drive the category growth in the edge data center market.
Currently, North America holds the largest share in the edge data center market. The commercialization of 5G, along with the rising data traffic and increasing government initiatives for the deployment of data centers, is the major factor behind its dominance. The U.S. dominates the regional market, due to the higher financial incentives to establish data centers offered by U.S. states, compared to Canadian provinces and territories, and heavy investments in data centers by major companies.
For instance, in March 2020, Google LLC announced plans to invest $10 billion for the development of data centers and its U.S. offices. With the abovementioned investment, Google LLC will develop new data centers in California, New York, Georgia, Colorado, Massachusetts, Nebraska, Oklahoma, Washington, and Pennsylvania.
The Asia-Pacific (APAC) region is predicted to grow at the most rapid pace in the coming years. The growth in the region is attributed to the rapid shift toward digitization and growing internet penetration in developing economies, including India, China, and Indonesia. As per a recent report published by the Internet & Mobile Association of India (IAMAI), as of November 2019, India had more than 504 million active internet users, which was a 12% increase compared to March 2019. The rising adoption of IoT devices, along with the consumer shift toward OTT content, is projected to drive the regional edge data center market growth.
IoT proliferation across the globe is one of the key edge data center market trends. The growing deployment of IoT in the automotive and healthcare industries is projected to increase the need for edge data center services. The number of connected devices is set to reach over 41.0 billion by 2027, from 14.2 billion in 2019. The growing number of smart city initiatives in various countries, such as India, the U.K., and Germany, is further projected to fuel the IoT growth. Thus, to manage the large amounts of IoT data, the demand for edge data centers is predicted to grow across the world in the near future.
The major factor driving the growth of the edge data center market is the rising mobile data traffic across the globe. The increasing adoption of smartphones and IoT devices is leading to a rise in the mobile data traffic, so, to manage the growing amount of data, the need for edge data centers across the world is becoming more dire. As per a recent report published in February 2019, the Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update 2017–2022, the mobile data traffic has been estimated at nearly 26.8 exabytes per month in 2019, and it is predicted to reach over 77.5 exabytes per month by 2022.
|Base Year (2019) Market Size||$5.3 Billion|
|Forecast Period (2020-2030) CAGR||25.4%|
|Report Coverage||Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Company Share Analysis, Major Countries Analysis, Companies’ Strategic Developments, Product Benchmarking, Company Profiling|
|Market Size by Segments||Component, Organization, Application, Geography|
|Market Size of Geographies||U.S., Canada, Germany, France, Italy, U.K., Spain, Japan, China, India, Australia, South Korea, Brazil, Mexico, U.A.E., South Africa|
|Secondary Sources and References (Partial List)||Advancing Data Center and IT Infrastructure Professionals (AFCOM), Africa Data Center Association (ADCA), Asian Development Bank (ADB), BCS Data Center Specialist Group (DCSG), Brazilian Association of Software Companies (ABES), Building and Construction Authority (BCA – IDA Singapore), Building Research Establishment (BRE), China Data Center Committee (CDCC), China Internet Network Information Center (CNNIC), Data Centre Alliance (DCA), International GNSS Service (IGS), Telecommunication Industry Association (TIA),|
The increasing OTT traffic across the world is another key driver for the edge data center market growth. The rising demand for OTT services and rapid consumer shift toward online content are the key reasons for the growth of OTT traffic. As per Cisco, the global internet protocol (IP) video, gaming and multimedia streaming traffic is estimated to reach more than 81% of all internet traffic by 2021, from 75% in 2019. Hence, the need for edge data centers will increase.
The edge data center market is fragmented in nature, due to the presence of a large number of industry players, such as Microsoft Corporation, IBM Corporation, 365 Operating LLC, and EdgeConnecX Inc. In recent years, several companies in the edge data center market have launched new products, in order to provide technologically advanced products to customers. For instance:
The edge data center market report offers comprehensive market segmentation analysis along with market estimation for the period 2014–2030.
Based on Component
Based on Organization
Based on Application