Edge Computing Market Size, Share & Trends Analysis Report By Component (Hardware, Software, Services, Edge-managed Platforms), By Application, By Industry Vertical, By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global edge computing market size was valued at USD 4.68 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 38.4% from 2021 to 2028. Edge computing introduces a great level of business complexity, as it requires an extensive range of stakeholders for IT infrastructure, connectivity, application development, traffic delivery, and service management. Edge also brings together hardware and software solutions and networking architecture that address the vast number of use cases pursued across several industry verticals. As the technology is still in the early stages of development and its implementation and operational models are yet to mature, an edge is likely to create vast growth opportunities for new entrants in the near future.

The COVID-19 pandemic has resulted in the growth of edge computing and data centers. However, with the increasing implementation, the spending on these technologies is expected to slightly decline over the next couple of months. Enterprises across different industry verticals are reducing their spending or are slashing their investments in upgrading software and servers to achieve rapid cost savings. However, there are exceptions in the healthcare and telecom sectors, where we can see increased investments in edge and IoT. The telecom sector is witnessing high growth in video conferencing software such as Zoom and Microsoft Teams and is rolling out new products to cope with the ever-increasing demand. For instance, in December 2020, SK Telecom collaborated with Amazon Web Services to launch edge cloud services based on 5G MEC. Companies are grasping the opportunities to tackle the current situation by delivering new services.

The intense escalation of demand for edge computing is expected to continue post-COVID-19 pandemic for the next three to four years as the stress on developing network infrastructure will not subside in the near future. Work from home becoming the new normal and the healthcare system reaching critical mass with online consultation is expected to give rise to such network infrastructure that requires low-latency connectivity and high security. Telecom companies are expected to capitalize on this opportunity as the per-unit cost of edge facilities will be overshadowed by the cost of adding additional switching facilities or building a full-sized data center. This cost advantage will accelerate telecom companies’ movement to a large deployment of data centers in the next couple of years.

Edge computing has become a solution-specific technology with exotic architectures and equipment that are built for particular use cases. 5G and network function virtualization, streaming games, and next-generation CDNs and cloud are some of the use cases where the edge is expected to capture a significant share over the forecast period. This is the first phase in a journey towards a future where the edge becomes readily available and a viable part of the internet with user-friendly interfaces for developers to exploit.

Component Insights

The servers segment captured a revenue share of more than 44% in 2020. Presently, servers that support edge applications are often owned by enterprises, connected to devices over a private network, and deployed on-premises. Servers are increasingly being deployed at many remote and edge locations, thereby helping reduce the latency between producers and consumers of data. Furthermore, with the telco edge evolving, the telcos are working on Multi-access Edge Computing (MEC) server platform for the data processing capabilities.

Edge sensors/routers capture a revenue share of approximately 23%. The increasing number of data centers across various industry verticals is propelling the demand for edge routers. The routers act as a gateway connecting the local network to external WAN. All the data packets approach the network to transmit through the edge router. Moreover, the edge router is eventually responsible for the security of the network, thereby screening out unauthorized access requests. The edge data centers must be well equipped with versatile and powerful edge routers that can handle a large capacity of incoming traffic with minimal latency.

Application Insights

The Industrial Internet of Things (IIoT) application segment captured a revenue share of over 31% in 2020. Edge computing has played an essential role in allowing manufacturers to achieve digitization of their facilities. In the manufacturing sector, a large share of edge computing is deployed in the form of device edge. The demand for edge infrastructure capabilities is expected to grow as service complexity increases and the infrastructure edge becomes more readily available. Furthermore, the Industry 4.0 initiative provides a framework for transforming manufacturing to address industry disruptions, thereby paving the way for edge deployment.

Industry 4.0 emphasizes operational agility using technologies that bring the convergence between physical and cyber systems. With an edge platform, smart factories have the option to send only filtered data to their cloud solutions. The edge acts as a gateway by analyzing data locally and sending summarized data to the cloud. For instance, in a smart factory, the edge systems can spontaneously reform certain problems proactively and then alert the plant operators to the issues on the factory floor.

Industry Vertical Insights

The energy and utilities segment captured a revenue share of over 17% in 2020. In the energy and utilities segment, the implementation of smart grids is expected to contribute to revenue growth as they rely on device edge infrastructure. Environmental sustainability initiatives are driving efforts to improve the efficiencies of electrical utility services globally along with the adoption of alternative renewable power sources, such as wind and solar. Smart grids are being implemented globally to improve operational efficiencies and enable capabilities such as integration with smart appliances, real-time consumption management, and micro-grids to support generation from distributed renewable sources.

The healthcare segment captured a significant revenue share in 2020. The healthcare industry has characteristically been conservative when it comes to the adoption of digital technologies. The industry is closely regulated, where innovation tends to be driven by consent rather than outright disruption. However, owing to the growing digitization across the healthcare sector, hospitals and clinics are increasingly adopting digital health strategies with varying degrees of maturity and success. To support these strategies, clinics and hospitals are implementing edge computing solutions across key use cases, including remote patient care, patient record management, and intervention and continuous patient monitoring.

Though the market has been impacted by the COVID-19 pandemic, there are several short-term growth prospects for the edge computing market. Applications of edge and IoT in healthcare and life sciences are expected to witness robust growth over the next couple of months. Edge computing and IoT have made it possible for disruptive technological developments to transform the healthcare industry. Using patient data, telemedicine programs, software applications, and diagnostic devices allows medical professionals to reach their patients faster and more efficiently.

Regional Insights

North America accounted for the largest revenue share of more than 44% in 2020. The convergence of edge computing with IIoT is encouraging manufacturers in the U.S. to move toward connected factories. Additionally, several startups have emerged to provide platforms for developing edge-enabled solutions, which is expected to drive the regional market. For instance, telecom companies in Canada, such as Telus Communications, are working with MobiledgeX, Inc. to develop the MobiledgeX Early Access Programme, which would allow developers to build, experiment, and gauge the effectiveness of edge-enabled applications in a low latency atmosphere.

Asia Pacific captured a significant revenue share in 2020, attributed to the growing emphasis on improving networking technology in the region due to COVID-19. The notable expansion of the connected device ecosystem in the region is resulting in the generation of a large amount of data, thereby creating the need for a powerful computational environment. Moreover, the increased focus of leading service providers such as Microsoft Corporation, which recently announced Azure Edge Zones, and Google Inc., which unveiled its Global Mobile Edge Cloud (GMEC) strategy that was primarily targeted at the U.S. market, is expected to provide impetus to regional growth over the next few years.

Key Companies & Market Share Insights

Edge start-ups are engaged in developing micro-edge data centers, which are small-scale modular data centers that include all the storage, computing, networking, power, and cooling facilities. For instance, in 2020, EdgeMicro launched five new micro-edge data centers across the U.S. The company developed a containerized data center design that can hold up to six racks, each designed to support 8 kW of power.

Another key development in the edge computing space is the hyperscalers, who already have a strong presence in the cloud market. These hyperscalers are transitioning towards the edge by bringing new solutions such as AWS Outposts, Azure Stack, and other IoT offerings. Both telcos and hyperscalers are some of the top contenders to lead the market for edge computing. However, the lack of cloud platforms for telcos and the presence of physical location for hyperscalers are few limitations faced by them. To overcome these limitations, the industry is expected to witness partnerships between operators and hyperscalers, which may impact the short-term and long-term strategies of the market players over the next few years. Some of the prominent players operating in the global edge computing market are:

• Cisco Systems, Inc.

• Microsoft Corporation

• Amazon Web Services (AWS), Inc.

• Moxa Inc.

• NVIDIA Corporation

• Belden Inc.

Edge Computing Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2028. For this study, Grand View Research has segmented the global edge computing market report based on component, application, industry vertical, and region:

• Component Outlook (Revenue, USD Billion, 2017 - 2028)

  • Hardware

    • By Type

      • Edge Nodes/Gateways (Servers)

      • Sensors/Routers

      • Others

    • By End Point Devices

      • Cameras

      • Drones

      • HMD

      • Robots

      • Others

  • Software

  • Services

  • Edge-managed Platforms

• Application Outlook (Revenue, USD Billion, 2017 - 2028)

  • IIoT

  • Remote Monitoring

  • Content Delivery

  • Video Analytics

  • AR/VR

  • Others

• Industry Vertical Outlook (Revenue, USD Billion, 2017 - 2028)

  • Industrial

  • Energy & Utilities

  • Healthcare

  • Agriculture

  • Transportation & Logistics

  • Retail

  • Datacenters

  • Wearables

  • Smart Cities, Smart Homes, Smart Buildings

• Regional Outlook (Revenue, USD Billion, 2017 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • MEA