Publication date: 10 Sep 2024
Worldwide Spending on Edge Computing Forecast to Reach $378 Billion in 2028, Driven by Demand on Real-time Analytics, Automation, and Enhanced Customer Experiences
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For more information, contact:- Alexandra Rotaru Email: arotaru@idc.com Phone number: +40 21 4112743
- Michael Shirer Email: press@idc.com Phone number: 508-935-4200
NEEDHAM, Mass., September 10, 2024 – According to the International Data Corporation (IDC) Worldwide Edge Spending Guide, global spending on edge computing is estimated to reach $228 billion in 2024, marking a 14% increase from 2023. This includes combined enterprise and service provider spending on hardware, software, professional services, and provisioned services for edge solutions. The forecast anticipates sustained strong growth through 2028, with spending expected to be near $378 billion, growing at a solid double-digit CAGR.
According to IDC, the edge encompasses the technology-related actions outside of centralized data centers, serving as an intermediary between connected endpoints and the core IT environment.
Edge is a crucial technology infrastructure that extends and innovates on the capabilities found in core datacenters, whether enterprise- or service-provider-oriented. The edge ecosystem comprises various technologies and services, including computing infrastructure (such as servers, storage, and networking equipment), diverse software (such as system infrastructure, security, and application development and deployment), as well as professional implementation and management services and provisioned services delivering cloud-based technologies.
"As the focus of AI shifts from training to inference, edge computing will be required to address the need for reduced latency and enhanced privacy," said Dave McCarthy, research vice president, Cloud and Edge Services at IDC. "This trend not only optimizes operation efficiencies but also fosters new business models that were previously not possible with centralized infrastructure. Distributing applications and data to edge locations enables faster decision-making with reduced network congestion."
The IDC Edge Spending Guide segments edge spending for more than 500 named enterprise use cases related to six domains – Artificial Intelligence (AI), Internet of Things (IoT), Augmented Reality (AR), Virtual Reality (VR), Drones, and Robotics – unlocking significant opportunities across various industries.
In manufacturing, accounting for the largest portion of spending, edge enables real-time monitoring of equipment and processes, reducing downtime and improving operational efficiency. Predictive maintenance use case, powered by AI at the edge, helps companies avoid costly breakdowns by identifying issues before they escalate.
In utilities, edge continues to enable smarter, more efficient, and real-time management of critical infrastructure such as electricity, water, and gas. With the increasing deployment of renewable energy sources, smart grids, and IoT-enabled devices, edge is a critical solution for utilities companies to help with processing vast amounts of data quickly and securely.
Banking is the fastest-growing industry in terms of spending. Driven by the rise of AI-powered services, edge transforms how banks handle data processing, fraud detection, and customer interactions. Examples of use cases include AI-optimized operations, augmented fraud analysis and investigation, and others.
IDC expects all 19 enterprise industries profiled in the spending guide will see five-year double-digit compound annual growth rates (CAGRs) over the forecast period.
However, the service provider segment will see the largest CAGR over the forecast period. In the service provider domain, investments in edge service delivery are built on infrastructure spending for multi-access edge computing (MEC), content delivery networks, and virtual network functions. Multi-access edge computing (MEC) represents the fastest growing area, becoming increasingly critical for supporting the ultra-reliable, low-latency communications required by next-generation applications steered by the widespread of 5G networks, IoT, and artificial intelligence.
"Enterprises are now accelerating their investments in edge and AI to drive real-time analytics, automation, and enhanced customer experiences, particularly in manufacturing, utilities, healthcare, and retail. Key technologies like AI-powered devices, edge servers with GPUs, and 5G connectivity are gaining traction, enabling organizations to process data closer to the source and achieve higher performance," said Alexandra Rotaru, manager, Data & Analytics, Europe. "In this journey, the service providers will play a critical role by offering tailored solutions, from infrastructure deployment to AI integration and edge management, helping enterprises seamlessly adopt edge and AI and unlock its full potential for advanced innovation."
Regarding technology spending, the most significant investment will stay within hardware at the beginning of the forecast, driven by AI processors and accelerators in edge infrastructure systems that are projected to generate increased demand in the coming years. However, provisioned services are estimated to surpass the hardware share by 2028. Within provisioned services, infrastructure as a service will represent the fastest growth category as a great tool that facilitates rapid development, deployment, and iteration of AI models and edge computing applications. Although small in terms of overall spending, on-premises software will remain a critical component of edge infrastructure, driven by accelerated demand for analytics and AI software.
From a geographic perspective, North America will remain the edge spending leader throughout the forecast period, followed by Western Europe, with Germany and the United Kingdom leading the spending. China, Latin America and Asia/Pacfic (excluding Japan and China) will experience the fastest spending growth over the five-year forecast.
Note: The IDC Worldwide Edge Spending Guide quantifies the edge computing market by forecasting enterprise and service provider spending across 22 technology markets, 7 technology domains, 19 enterprise industries, 9 geographic regions, and, newly added, 24 countries.
In the latest version (August—2024 V2) of the Edge Spending Guide, a new domain structure has been introduced. To better understand spending behavior across the AR/VR domain at the edge, it has been divided into two separate reality-type domains: AR and VR.
Additionally, a new country segmentation structure has been introduced as an additional forecast, separate from the main forecast. This new forecast aims to offer more comprehensive insights into each country's unique dynamics. It will enable IT suppliers to make more strategic decisions and tailor their approaches for greater success in new geographical locations. The new forecast will present country-level spending for the 2 buyer types (enterprise and service provider), 11 technology categories (technology detail is excluded from the country forecast) and 19 enterprise industries. The list for the current release includes the following countries: ANZ (Australia and New Zeeland), Argentina, Brazil, Canada, France, Germany, India, Indonesia, Italy, Japan, Korea, Malaysia, Mexico, Poland, PRC, Rest of APeJC, Rest of CEE, Rest of Middle East, Rest of Western Europe, Saudi Arabia, United Arab Emirates, United Kingdom and USA.
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.
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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.