Edge Data Center Market Size, Share & Trends Analysis Report By Component (Solution, Service), By Facility Size (Small & Medium Facility, Large Facility), By End-use Industry, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global edge data center market size was valued at USD 8.27 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 17.9% from 2022 to 2030. Global demand for edge data centers is expected to increase as more industries are adopting emerging technologies such as the internet of things, big data, artificial intelligence, cloud, streaming services, and 5G. Most of the prominent players have moved to public and private clouds, co-location facilities, the edge cloud, and evolving data centers using virtualization and software-defined networks. The reasons for the shift toward edge data centers include smart agility, convenience, and cost-effectiveness. Edge data centers are relatively smaller than large cloud data centers and will need to be located near places where people congregate and move. It has decentralized facilities, equipped with power and cooling infrastructure that provides computing and storage in a location closer to where data is being generated and/or used. There are two types of edge data centers: metro and mobile. They are typically the size of a shipping container, are placed at the base of cell towers, and provide substantial support to IoT (Internet of Things) and the autonomous vehicle segment to increase processing capability and enhance customers’ experience. They are also helping mobile network operators (MNOs) to provide faster content services to mobile subscribers and prefabricated modular edge data centers, which are ideal for a variety of industries that need hyper-local computing and storage capacity. These technologies create high volumes of data in the network, generating new performance and computing demands in the data center, which is ultimately driving the demand for edge data center solutions and services. In addition, the demand for low operating costs, real-time data analysis, reduced network traffic, improved application performance, and business agility will accelerate the growth of the market.

The COVID-19 pandemic had a positive impact on the market. Increased corporate awareness regarding the benefits of edge computing services, increased pressure to provide more secure and robust IT environments, and the establishment of local data centers throughout the regions have all contributed to the data center industry growth. In addition, the growing popularity of OTT platforms and e-commerce is expected to drive demand for edge data centers in the projected period.

Health safety compliances and mandatory containment measures have put huge pressure on remote operations in several industries, such as automotive, manufacturing, retail, and logistics. For instance, numerous automotive companies, such as Fiat Chrysler, Ford, and GM, had shut down their centers and operations across Europe and North America. This has resulted in the demand for edge computing solutions to support remote monitoring across these industries.

Component Insights

The solution segment accounted for the largest revenue share of over 85.0% in 2021 and is expected to continue to dominate the market over the forecast period. The solution segment includes hardware and software solutions such as networking equipment, IT racks and enclosures, DCIM software, and data center analytics solutions. Factors such as the emergence of next-generation DCIM offerings, the rise in data center workloads during COVID-19, and the need to improve data center energy efficiency are driving the demand for edge data center solutions. In terms of component, the market is segmented into solutions and services.

The service segment is anticipated to witness the highest growth rate of 19.8% during the forecast period. The service segment is bifurcated into professional services and managed services. Edge data center professional services improve service delivery, simplify IT operations, and enable cloud initiatives. It includes services such as integration and implementation and consulting services.

Facility Size Insights

The large facility segment held the largest revenue share of over 75.0% in 2021. Facilities with 12-49 racks or more and a power draw of 12 to 14 kW/rack or cabinet fall under the large facility segment. As they easily expand and support an organization's data center capabilities, these large facility data centers are perfect for businesses with several branch offices. They are also ideal for reducing space, deploying quickly, and offering ways to cut costs.

The small and medium facility segment is expected to register the highest growth rate of 18.7% during the forecast period. In the upcoming years, SMEs are anticipated to quickly adopt edge data center solutions as they are witnessing strong digitization and providing online services, both of which require data-intensive applications. Thus, demand for small and medium-edge data centers is expected to increase during the forecast period.

End-use Industry Insights

The IT and telecom segment held the largest revenue share of over 35.0% in 2021 and is expected to maintain its position over the forecast period. With the introduction of various technologies such as IoT, 5G, augmented and virtual reality, and AI/ML, the IT and telecom sector is growing to meet the needs of large data processing and low latency. Thus, to meet these demands, IT and telecom data centers are going through a transformation to handle low latency and high data volume needs, which is ultimately driving the demand for edge data centers. Based on the end-use industry, the global market is segmented into IT & telecom, BFSI, manufacturing & automotive, government, healthcare & life science, retail & E-commerce, gaming & entertainment, and others.

The manufacturing and automotive segment is expected to register the highest growth rate of 20.4% during the forecast period. Increasing adoption of technologies such as 5G and edge computing in the automotive sector as they can provide high bandwidth, low latency, and mobile applications in a reliable and secure way is the major factor behind the segment growth.

Regional Insights

North America dominated the market with a share of over 30.0% in 2021 and is anticipated to retain its position over the forecast period. The high adoption of edge data center solutions and services in this region is the major factor behind the market growth. In addition, North America has prominent edge data center solutions and service providers, which makes North America a promising region for the market. The region is likely to witness significant growth owing to the growing commercialization and deployment of 5G networks in the region.

Asia Pacific is anticipated to expand at the highest CAGR of 18.7% during the forecast period. The market for edge data centers in this region is driven by the rise in investments in the IT sector, the growth of end-use industries, and the vast presence of edge computing companies such as Huawei Technologies Co., Ltd., and Fujitsu.

Key Companies & Market Share Insights

The market has a fragmented competitive landscape as it features various global and regional market players. Leading industry players are undertaking strategies such as product launches, collaborations, and partnerships to survive the highly competitive environment and expand their business footprints.

For instance, in June 2022, Cisco and Kyndryl announced a technology collaboration to aid enterprise customers to increase their transformation into data-driven businesses powered by Kyndryl-managed services and Cisco solutions. By utilizing cloud computing technologies that simplify difficult hybrid IT management with increased manageability, visibility, and flexibility, Cisco and Kyndryl will work together to assist businesses in transforming their operations. In addition, in October 2021, to support the acceleration of HPE's edge-to-cloud strategy, Hewlett Packard Enterprise announced strategies to extend its venture financing program, Hewlett Packard Pathfinder. Over the course of the upcoming year, Pathfinder aims to considerably increase the rate of its investments, beginning with new investments that address three important client challenges such as cloud, edge, and data. Some prominent players in the global edge data center market include:

• Cisco Systems Inc.

• Dell Inc.

• Flexential Corporation

• Rittal GmbH & Co. KG

• Vapor IO, Inc.

• Eaton

• Fujitsu

• Hewlett Packard Enterprise Development LP

• Huawei Technologies Co., Ltd.

• IBM

• NVIDIA Corporation

• Schneider Electric

• Vertiv Group Corp.

• CommScope

• 365 Data Centers

Edge Data Center Market Report Scope

Global Edge Data Center Market Segmentation

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global edge data center market report based on component, facility size, end-use industry, and region:

• Component Outlook (Revenue, USD Million, 2017 - 2030)

  • Solution

    • Hardware

    • Software

  • Service

    • Professional

    • Managed

• Facility Size Outlook (Revenue, USD Million, 2017 - 2030)

  • Small And Medium Facility

  • Large Facility

• End-use Industry Outlook (Revenue, USD Million, 2017 - 2030)

  • IT And Telecom

  • BFSI

  • Healthcare And Lifesciences

  • Manufacturing & Automotive

  • Government

  • Gaming And Entertainment

  • Retail And E-Commerce

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • Italy

    • France

    • Rest of Europe

  • Asia Pacific

    • China

    • India

    • Japan

    • Australia

    • Rest of Asia Pacific

  • Latin America

    • Brazil

    • Mexico

    • Rest of Latin America

  • Middle East & Africa

    • UAE

    • Saudi Arabia

    • South Africa

    • Rest of MEA