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Edge computing allows computation and data storage to occur at the network edges close to IoT sensors and devices where data are generated. This provides advantages such as reduced latency, near real-time response, and lower bandwidth requirements. With the increasing deployment of IoT devices across various industries, there is massive generation of data that requires to be processed. Managing and analyzing such huge volumes of data at centralized cloud facilities involves high latency and bandwidth requirement issues. Edge computing helps overcome these challenges by shifting computational tasks closer to IoT endpoints.
The Global Edge Computing Market is estimated to be valued at US$ 111.3 Bn in 2024 and is expected to exhibit a CAGR of 15.% over the forecast period 2023 to 2030.
Key Takeaways
Key players operating in the Edge Computing are Microsoft Corporation,,Google LLC,,IBM Corporation,,Huawei Technologies Co. Limited,,Cisco Systems Inc. These players are expanding their edge capabilities through strategic partnerships and collaborations.
The growing adoption of advanced technologies like augmented reality, virtual reality, and artificial intelligence has opened various opportunities for edge data centers. Decentralizing cloud infrastructure through edge data centers helps deliver low-latency services for applications that require real-time processing of data like autonomous vehicles.
Rapid deployment of 5G networks is expected to fuel the adoption of edge computing. 5G offers higher bandwidth and lower latency which are critical for applications based on edge computing infrastructure. Edge nodes integrated with 5G networks can improve real-time data processing for applications in sectors like industrial manufacturing, transportation, and healthcare.
Market drivers
Growing demand for reduced latency and real-time analysis of data generated by IoT devices is a major market driver. As IoT devices proliferate across industries, there is a need to process the data generated closer to source and gain insights faster. Edge nodes positioned near data sources enable this through their decentralized computing capabilities. This helps organizations make critical operational and business decisions with speed based on real-time IoT insights. The increasing capabilities of edge nodes is facilitating their adoption for applications that require fast data processing and response times.
Current Challenges in Edge Computing Market
The edge computing market is still in a nascent stage of development and therefore facing many technical as well as market related challenges. Issues around data security, limited infrastructure, integration challenges with legacy systems, and inconsistent standards and regulations are hindering the growth of this market. As huge amounts of data will be processed at the network edges in real-time, it raises serious concerns around privacy, safety and regulatory compliance. Ensuring security and privacy of sensitive data at decentralized edge locations is the top most challenge for players in this market. Limited broadband connectivity in rural and remote areas is restricting the implementation of edge solutions globally. Lack of common architecture and infrastructure also creates integration challenges with existing centralized IT systems of organizations.
SWOT Analysis
Strength: Edge computing provides significant advantages in terms of latency, bandwidth, and mobility over traditional cloud-based systems. Processing data locally helps organizations achieve near real-time insights.
Weakness: Initial set up and management of geographically distributed edge nodes require huge capital investments and specialized skills. Security risks are more due to the distributed nature of edge infrastructure.
Opportunity: Widespread adoption of IoT devices and availability of 5G networks will create massive opportunities for edge data processing and analytics. Emerging technologies like AI/ML also increases the relevance of edge computing.
Threats: Dependence on telecom operators for connectivity can impact services. Competition from other innovative technologies in the data center space is also a challenge.
Geographical Regions
In terms of value, the edge computing market is currently dominated by North America, as early adopters of edge solutions are primarily based in this region. America accounts for over 30% of the global edge computing infrastructure spend. Presence of major technology companies and advanced telecom infrastructure has accelerated the commercial deployment of edge projects.
Asia Pacific is expected to be the fastest growing regional market during the forecast period. This is mainly due to the massive ongoing investments in 5G rollouts, industrial automation, and smart city projects – primary targets for edge computing implementations. Countries like China, Japan, and South Korea are aggressively testing edge applications to power mission critical systems.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
