Edge Data Center Market Trends, Growth, Size to 2030

Coverage: Edge Data Center Market covers analysis By Deployment Type (Greenfield Type, Brownfield Type); Vertical (BFSI, IT and Telecommunication, Government, Retail, Others) , and Geography (North America, Europe, Asia Pacific, and South and Central America)

Publication Month : Apr 2024

  • Report Code : TIPTE100000281
  • Category : Technology, Media and Telecommunications
  • Status : Upcoming
  • No. of Pages : 150
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[Research Report] The edge data center market size is expected to grow from US$ 10.20 billion in 2022 to US$ 38.14 billion by 2030; it is estimated to grow at a CAGR of 17.9% from 2022 to 2030.

Analyst Perspective:

The edge data center market has witnessed significant growth in recent years, driven by technological advancements, and the huge adoption of edge data centers among various industry verticals, including BFSI, IT and telecommunication, government, retail, and others, is driving the market. These industries use edge data centers to provide their customers with lower latency, higher security, and greater control over their data. Furthermore, edge data centers have numerous benefits to the user, such as processing data locally, faster processing of time-sensitive data, quick delivery of services with minimal latency, and reducing the volume of traffic flowing to and from central servers. These benefits offered by the edge data center to the users are projected to fuel the global edge data center market during the forecast period. The integration of advanced technologies such as artificial intelligence (AI), the Internet of Things (IoT), machine learning (ML), and 5G are creating lucrative growth opportunities for the market growth.

In recent years, the edge data center has become increasingly popular across industries due to the growing adoption of IoT, and increasing government investment in smart city projects is boosting the market. The edge data center aids smart cities in achieving optimal energy management by monitoring the overall energy consumption. Edge data centers are used to increase the speed of several applications like streaming video, telemedicine, industrial automation, etc., encouraging businesses, cloud service providers, and telecom firms to invest significantly in digital edge data centers. However, increasing investment in the development of 5G and 4G infrastructure is creating opportunities in the market during the forecast period.

Market Overview:

Edge data centers for computing are continuously evolving and have become more cutting-edge in recent years. As a result, computing and data centers will integrate more thoroughly by empowering services and applications to operate more effectively and with lower latency. The development in the existing technology is creating the need for high-speed data with low latency in the coming years. Service providers are migrating to the cloud, and companies are adopting digital transformation to grow their brands and compete with the competitors. This requires high-tech tools with highly efficient data centers at the edge for managing IT operations and data storage.

Edge data centers are decentralized and typically connected to larger central or multiple data centers. Edge data centers are smaller data centers located close to the area or population they serve. They have a power and cooling infrastructure that delivers cloud computing resources and cached content to end users. Edge data centers are powered by edge caching—hardware- or software-based components that temporarily store data for increasing computing response time. These components act as micro-data centers (MDCs), a modular system designed for workloads outside the centralized data center. MDC components can include mobile computing, which uses the cloud and data storage infrastructure for moving data to selected areas. Edge data centers provide storage closer to where data is generated or used. The edge data center functions as a connection between multiple networks. It has become an internet exchange point for numerous devices such as mobile phones, laptops, and others. Edge data centers act as a medium for collecting and transmitting data between multiple networks and benefit service providers by providing access to localized compute resources, especially for various cloud-driven functions like machine learning (ML) and edge computing.

Eventually, edge data centers are designed to convert collected data into operational/usable insights. It also facilitates automated capabilities or processes like cybersecurity, threat analysis, and gaining insight into device or infrastructure performance. An edge data center helps in data processing close to the end user with less integral or time-centric data. This data is sent to a central data center for processing, allowing a business to reduce latency. Thus, the increasing adoption of edge data centers among various industries such as automotive, manufacturing, BFSI, IT & telecom, and others for appropriate data processing is boosting the market.

Strategic Insights

Market Driver:

Increasing Investment in 5G Technology is Driving the Market

Growing demand for 5G technology among consumers for high-speed networks with increased bandwidths increases its deployment across the globe. 5G is a transformative advancement in the mobile communication industry that significantly offers faster data speeds, increased network capacity, lower latency, and the ability to support many connected devices. The network technology represents a significant leap from 4G/LTE technology. 5G technology is revolutionizing various industries and their applications by faster-transferring data between devices, increasing consumer adoption. Thus driving the market.

Moreover, the deployment of 5G networks is increasing the demand & adoption of edge data centers. 5G technology provides lower latency and higher bandwidth to deliver data among users. Edge data centers are necessary to support 5G applications, as the edge data center helps the user process data locally by reducing the backhaul traffic to the core data centers. Integrating 5G and the edge data center enhances the capabilities and potential of both technologies. 5G technology and edge data centers address and fulfill the demands of modern applications and services. Combining both technologies enables quick data transfer from connected devices to nearby edge data centers by supporting real-time processing and responses, increasing its adoption and driving market growth.

Market Segmental Analysis:

Based on component, the edge data center market is segmented into solutions and services. The solution segment is anticipated to expand during the forecast period due to the growing demand for DCIM software in edge data centers. The solution segment includes a variety of hardware & software solutions such as networking equipment, DCIM software, IT racks & enclosures, and data center analytics solutions. Growing demand for next-generation DCIM offerings for improving the energy efficiency of edge data centers is driving the market. The DCIM software is used for managing and coordinating processing and data storage in edge data centers. The DCIM software enables real-time data processing, which increases its adoption among edge data centers, thus boosting the solution segment.

Market Regional Analysis:

The North America edge data center market was valued at US$ XX billion in 2022 and is projected to reach US$ XX billion by 2030; it is expected to grow at a CAGR of XX% during the forecast period. North America holds one of the largest global edge data center market shares. High technology adoption trends in the industries in North America have fueled the growth of the edge data center market. The region is witnessing substantial growth owing to the growing commercialization and deployment of 5G networks. Growing adoption of edge data centers among customers to serve future technologies such as 5G, the Internet of Things (IoT), and artificial intelligence (AI) demand low latency and high bandwidth connections. Edge data centers are used to lower latency by immediately bringing data processing and storage resources closer to end users, significantly enhancing application and service performance.

Furthermore, the market in the US is projected to expand due to the presence of key players. The US is the homeland of several leading-edge data center providers, such as Dell Technologies Inc., 365 Data Centers, EdgeConneX Inc., Eaton Corporation, Fujitsu Ltd., and Huawei Technologies Co., Ltd. These players are continuously engaged in developing new and existing technologies, which is another factor driving the growth of the edge data center market in the country. The COVID-19 pandemic has increased the demand and adoption of edge data centers in the US. A larger percentage of the population in the country has subscribed to various streaming like Netflix, Hulu, or Amazon for entertainment purposes. Edge data center is helping streaming service providers to enhance end users’ experience.

Moreover, an edge data center is also experiencing tremendous growth in the usage of video conferencing applications. Edge AI offers unemployed people new career prospects. Telecom operators plan to invest USD 380 billion in 5G technology by 2025 to focus on new services for consumers and enterprises. Hence, 5G-based applications represent an effective potential for adopting edge data centers in North America.

Market Key Player Analysis:

The edge data center market analysis consists of players such as 365 DATA CENTERS, COMPASS DATACENTERS, DELL TECHNOLOGIES, INC., EATON CORPORATION, EDGECONNEX INC., EDGEPRESENCE, FLEXENTIAL CORPORATION, FUJITSU LTD., HUAWEI TECHNOLOGIES CO., LTD., AND VXCHNGE are among the key edge data center market players profiled in the report.

Market Recent Developments: 

Inorganic and organic strategies such as mergers and acquisitions are highly adopted by companies in the edge data center market. A few recent key market developments are listed below: 

  • In July 2023, Dell Technologies, Inc. announced a collaboration with Airspan to deliver a pre-integrated solution for wireless edge deployments. This solution combines Dell Technologies, Inc.'s modular data center and Airspan’s advanced wireless networking technology to provide a seamless and efficient solution for wireless edge deployments.
  • In July 2023, Flexential announced a significant expansion of the FlexAnywhere Platform across Atlanta, Georgia and Hillsboro, Oregon. The company plans to construct a new 36-megawatt (MW) phased development at its Atlanta-Douglasville, Georgia campus by the end of 2023. This development adds a new facility to the campus by strengthening the 22.5MW project.
  • In June 2023, Dell Technologies Inc. expanded its Dell Private Wireless Program to provide secure enterprise connectivity to edge locations. The program also supports Airspan and Druid wireless solutions to provide businesses with enhanced options for consistent wireless connectivity at the edge.
  • In May 2023, 365 Data Centers expanded enterprise service capabilities by including eight new data center locations and 35 new Points of Presence (PoPs). This expansion benefits agents, resellers, and direct customers by providing a unified solution with one Master Service Agreement (MSA), support team, and invoice for full-stack offerings such as colocation, network, cloud, and IT support services.

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Report Coverage
Report Coverage

Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends

Segment Covered
Segment Covered

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Regional Scope
Regional Scope

North America, Europe, Asia Pacific, Middle East & Africa, South & Central America

Country Scope
Country Scope

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The List of Companies

1. 365 Data Centers
2. Compass Datacenters
3. Dell Technologies, Inc.
4. Eaton Corporation
5. EdgeConneX Inc.
6. EdgePresence
7. Flexential Corporation
8. Fujitsu Ltd.
9. Huawei Technologies Co., Ltd.
10. vXchnge

The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.

  1. Data Collection and Secondary Research:

As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.

Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.

  1. Primary Research:

The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.

For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.

A typical research interview fulfils the following functions:

  • Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
  • Validates and strengthens in-house secondary research findings
  • Develops the analysis team’s expertise and market understanding

Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:

  • Industry participants: VPs, business development managers, market intelligence managers and national sales managers
  • Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.

Below is the breakup of our primary respondents by company, designation, and region:

Research Methodology

Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.

  1. Data Analysis:

Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.

  • 3.1 Macro-Economic Factor Analysis:

We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.

  • 3.2 Country Level Data:

Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.

  • 3.3 Company Profile:

The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.

  • 3.4 Developing Base Number:

Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.

  1. Data Triangulation and Final Review:

The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.

We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.

We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.

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