Edge Data Center Market

Market Overview:

The global edge data center market size reached US$ 11.0 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 44.8 Billion by 2032, exhibiting a growth rate (CAGR) of 16.92% during 2024-2032. The increasing demand for low-latency processing, the growing adoption of IoT devices, the rising demand for cloud services and real-time data processing, and the proliferation of video streaming services are some of the major factors propelling the market.

An edge data center is a localized, smaller-scale data storage facility that enables faster data processing and distribution by being closer to data generation sources. It is designed to deliver cloud computing resources and cached streaming content to end-users. Edge data center alleviates latency issues, reduces the amount of data transferred back and forth from the main server, and ensures a seamless and efficient data service. These data centers are critical in managing the vast volume of data generated by the Internet of Things (IoT) devices, autonomous vehicles, and other digital sources, providing real-time analytics and insights.

The global edge data center market is primarily driven by the rising proliferation of IoT devices, big data, and artificial intelligence (AI) technologies, necessitating faster data processing and lower latency. In addition to this, the widespread adoption of digital services and cloud computing across various sectors, such as healthcare, manufacturing, and retail, is creating a positive outlook for market expansion. Moreover, the burgeoning demand for high-quality (HQ) video content and online gaming services, which require real-time data processing and efficient content delivery networks, is propelling the market forward. Besides this, the surge in remote working patterns and digital learning trends has impelled the need for efficient and reliable data infrastructure, thus favoring the market growth. Furthermore, the rise in smart cities and autonomous vehicles, combined with the advent of fifth-generation (5G) technology, are presenting remunerative growth opportunities for the market.

Edge Data Center Market Trends/Drivers:

The increasing proliferation of IoT, big data, and AI technologies

The advent of IoT, big data, and AI technologies has resulted in the generation of massive volumes of data that require rapid processing and analysis, which, in turn, is propelling the demand for edge data centers. IoT devices, in particular, continuously create data that needs immediate processing to generate real-time insights and optimize functionality. In addition to this, AI and machine learning systems demand quick data access for efficient learning and decision-making processes. Besides this, expanding applications of big data across various sectors, such as finance, healthcare, retail, and others, are positively impacting the market growth. Furthermore, edge data centers, due to their proximity to the data sources, are ideal for addressing these increasing demands, providing lower latency and higher data processing speeds.

Rapid digitalization across various industrial verticals

With digital transformation becoming a strategic imperative for businesses in various sectors, the need for robust data management infrastructure has heightened. Various industrial sectors, such as healthcare, are utilizing digital tools and platforms for telemedicine, remote patient monitoring, and digital health records, necessitating reliable and rapid data services. Moreover, the retail sector is leveraging digital platforms for e-commerce, customer data management, and inventory tracking, which, in turn, is fueling the need for edge data center for efficient data handling and storage. Furthermore, the expanding adoption of Industry 4.0 practices across the manufacturing sector and the growing penetration of connected devices and automation tools that generate enormous amounts of data are aiding in market expansion.

The advent of 5G and the need for real-time data processing

The imminent widespread deployment of 5G technology, offering significantly higher speeds and lower latency than its predecessors, is presenting remunerative growth opportunities for the market. Edge data centers, due to their inherent design, are ideal for this requirement, providing the necessary low-latency, high-bandwidth data services. Moreover, the expanding real-time applications such as autonomous vehicles, telemedicine, and smart cities, needing instantaneous data analysis for a safe and effective operation, ensuring minimal lag and real-time responsiveness, are creating a favorable outlook for the market.

Edge Data Center Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global edge data center market report, along with forecasts at the global, regional, and country levels from 2024-2032. Our report has categorized the market based on component, facility size, and vertical.

Breakup by Component:

• Solution
• Services
   

Solution is dominating the market

The report has provided a detailed breakup and analysis of the market based on the component. This includes solution and services. According to the report, solution represented the largest segment.

The expanding demand for edge data center solutions and services is primarily driven by the exponential growth of data generated by digitalization and the increasing need for rapid, real-time data processing. In line with this, the increasing proliferation of IoT devices, from smart home appliances to industrial sensors, generating a massive influx of data that requires immediate processing for real-time analysis and response is strengthening the market growth. Apart from this, the advent and expanding adoption of technologies, such as AI and big data, are propelling the demand for localized, faster data solutions. Moreover, growing environmental concerns are pushing for more energy-efficient, smaller, and localized data solutions, such as edge data centers, which, in turn, is presenting remunerative growth opportunities for the market.

Breakup by Facility Size:

• Small and Medium Facility
• Large Facility
   

Large facility holds a larger share in the market

A detailed breakup and analysis of the market based on the facility size has also been provided in the report. This includes small and medium, and large facilities. According to the report, large facility accounted for the largest market share.

The surging growth of data-intensive applications and technologies, such as IoT, AI, and 5G networks, are creating a need for low-latency processing and storage capabilities closer to the source. Concurrent with this, the widespread product adoption in small and medium facilities to cater to local or regional data processing requirements and enable faster data processing, reduce network congestion, and improve application performance is acting as a significant growth-inducing factor. This is particularly crucial for applications that require real-time analytics, autonomous systems, and localized data storage, such as smart cities, connected vehicles, and industrial automation. In addition to this, the increasing demand for content delivery, streaming services, and cloud computing are aiding in market expansion.

Breakup by Vertical:

• IT and Telecom
• BFSI
• Retail and E-commerce
• Government
• Healthcare and Life Sciences
• Manufacturing
• Gaming and Entertainment
• Automotive
• Others
   

BFSI is dominating the market

The report has provided a detailed breakup and analysis of the market based on the vertical. This includes IT and telecom, BFSI, retail and e-commerce, government, healthcare and life sciences, manufacturing, gaming and entertainment, automotive, and others. According to the report, BFSI represented the largest segment.

The expanding product adoption across the flourishing IT and Telecom industry in cloud services, edge computing, and 5G networks, providing low-latency connectivity for data-intensive applications, is contributing to the market growth. Moreover, the rising product employment in the BFSI sector to enable secure and real-time financial transactions, data analytics, and fraud detection is strengthening the market growth. Besides this, the growing use of edge data centers in the retail and e-commerce industry to facilitate inventory tracking, augmented reality shopping experiences, and efficient order fulfillment is aiding in market expansion. Furthermore, the growing product employment in the healthcare sector to support telemedicine, medical IoT devices, remote patient monitoring, and precision medicine are propelling the market forward.

Breakup by Region:

• North America
  • United States
  • Canada
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

North America exhibits a clear dominance in the market, accounting for the largest edge data center market share

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa.

The rising adoption of emerging technologies, such as IoT, AI, and 5G networks, in North America represents the key factor driving the market growth. Concurrent with this, the increasing demand for content delivery services and cloud computing, and the need to support autonomous systems are propelling the demand for edge data centers in the region.

In addition to this, the increasing digitalization across various industrial verticals in Europe, combined with the escalating focus on data sovereignty and privacy regulations, are presenting remunerative growth opportunities for the market. Apart from this, the large population and a high concentration of mobile users in the Asia Pacific region, resulting in significant data generation and consumption, is acting as another significant growth-inducing factor. Moreover, the rapid adoption of IoT and AI technologies and the expanding deployment of 5G networks in countries, such as China, South Korea, and Japan, is fueling the demand for edge data centers to support enhanced network capabilities.

Competitive Landscape:

The global edge data center market is characterized by intense competition among various players operating in the industry. The competitive landscape is dynamic and evolving, with both established companies and new entrants striving to capture market share and meet the growing demand for edge data center solutions. Several major players dominate the market, including IT infrastructure providers, data center operators, telecommunications companies, and cloud service providers. These companies leverage their extensive resources, infrastructure, and technological expertise to offer comprehensive edge data center solutions to customers worldwide. Additionally, there are numerous smaller and niche players that focus on specific segments or regional markets. These players often offer specialized services, customized solutions, or innovative technologies to cater to specific industry needs or emerging trends.

The report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• Compass Datacenters
• DC BLOX Inc.
• Dell Technologies Inc.
• EdgeConneX Inc.
• Equinix Inc.
• Hewlett Packard Enterprise Development LP
• Huawei Technologies Co. Ltd.
• International Business Machines Corporation
• Nvidia Corporation
• Rittal Limited (Friedhelm Loh Group)
• Schneider Electric SE
• Vapor IO Inc.
• Vertiv Group Corp.

Edge Data Center Market Report Scope:

Key Questions Answered in This Report:

• How has the global edge data center market performed so far, and how will it perform in the coming years?
• What are the drivers, restraints, and opportunities in the global edge data center market?
• What is the impact of each driver, restraint, and opportunity on the global edge data center market?
• What are the key regional markets?
• Which countries represent the most attractive edge data center market?
• What is the breakup of the market based on the component?
• Which is the most attractive component in the edge data center market?
• What is the breakup of the market based on the facility size?
• Which is the most attractive facility size in the edge data center market?
• What is the breakup of the market based on the vertical?
• Which is the most attractive vertical in the edge data center market?
• What is the competitive structure of the global edge data center market?
• Who are the key players/companies in the global edge data center market?

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the edge data center market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global edge data center market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the edge data center industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.