European Edge Computing Spending Is Expected to Reach Nearly $50 Billion in 2024, Says IDC

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• Alexandra Rotaru (arotaru)  Email: arotaru@idc.com  Phone number: +40 21 4112743

Munich, March 21, 2024 – According to the Worldwide Edge Spending Guide (Edge SG) published by the International Data Corporation (IDC), European spending on edge computing will reach nearly $50 billion in 2024, representing an increase of 15% compared to last year. Buyer segment spending, which includes both enterprises (large and very large businesses) and service providers, is expected to continuously grow across various categories such as hardware, software, professional services, and provisioned services for edge solutions through 2027. Spending is expected to reach $75 billion in 2027, reflecting a strong growth trend.

IDC defines edge as information and communications technology (ICT) related actions that are performed outside of the centralized datacenter, where edge is the intermediary between the connected endpoints and the core IT environment. Characteristically, edge is distributed, software-defined, and flexible. The value of edge is the movement of computing resources to the physical location where data is created, transacted or stored, thereby facilitating business processes, decisions, and intelligence outside of the core IT environment.

"Europe is steadily moving into the digital age, despite the ongoing macroeconomic uncertainty. Edge computing is playing a vital role in this advancement by revolutionizing industries and building resilience through innovation," says Alexandra Rotaru, senior research analyst for the IDC Data & Analytics group. "This transformative process will enable businesses to leverage data-driven insights at the source, with the assistance of AI at the edge. This will facilitate real-time decision-making and unlock new potential for efficiency and competitiveness."

Over the next three years, edge computing in Europe is expected to experience substantial growth due to advancements such as the widespread adoption of 5G networks and the integration of artificial intelligence (AI) and machine learning (ML) technologies at the edge. Also, leveraging edge computing for augmented and virtual reality (AR/VR) applications can enhance user experience, reduce operational costs, and enable new use cases in various industries.

The development of AI deployments at the edge remains crucial for Europe, as it can enhance privacy protection by processing data locally. It can also foster innovation and economic growth by encouraging the development of specialized Edge AI solutions. Additionally, it can improve resilience and promote compliance with stringent data regulations, thereby contributing to Europe's leadership in the global AI landscape.

Investments in edge solutions are dominated by the enterprise segment, with discrete and process manufacturing being the largest contributors, followed by the retail and professional services industries. Production asset management, autonomic operations, electric distribution, and inventory intelligence will be among the use cases with the largest value of investments in our forecast period. These are mostly linked to the maturing IoT domain. In the service provider domain, investments for edge service delivery are based on infrastructure spending for multi-access edge computing (MEC), content delivery networks, and virtual network functions. Across more than 500 enterprise use cases, these three together will account for almost 22% of all edge spending this year.

In the long term, the fastest spending growth over the 2022-2027 period is expected in emerging edge use cases, primarily within the AR/VR and AI domains, such as augmented threat intelligence and prevention systems, collaborative autonomous mining operations, augmented maintenance, or AR/VR-focused training. These technologies remain instrumental in allowing companies to realize the full potential of their innovation and digital transformation capabilities.

In terms of edge-specific technology spending, the largest investment share will continue to be led by hardware, followed by provisioned services, which will continue to significantly increase spending over the forecast period. Within provisioned services, the cloud portion will represent the fastest-growing category. On-premises software will be a critical component of edge infrastructure but remain the smallest share category over the forecast period.

About IDC Worldwide Edge Spending Guide

The IDC Worldwide Edge Spending Guide quantifies the edge computing market by forecasting enterprise and service provider spending across 22 technology markets, six technology domains, 19 enterprise industries, and nine geographic regions. This version (2024 v1) of the Edge SG also includes more than 500 use cases that were segmented across various industries and domains.

About IDC Spending Guides

IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.

For more information about the IDC's Worldwide Edge Spending Guide, please contact Alexandra Rotaru at arotaru@idc.com or Marcus Torchia at mtorchia@idc.com

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About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world's leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.

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