- Projected to grow by 14% to reach $228b in 2024 and reach $378b by 2028.
- Edge computing emerges as a pivotal technology infrastructure that bridges gap between traditional centralised data centres and burgeoning world of distributed computing.
As organisations increasingly transition toward digital transformation, edge computing emerges as a pivotal technology infrastructure that bridges the gap between traditional centralised data centres and the burgeoning world of distributed computing.
According to the International Data Corporation (IDC) Worldwide Edge Spending Guide, global expenditure on edge computing is projected to reach an astounding $228 billion in 2024, representing a remarkable 14 per cent increase from 2023 and expected to reach $378 billion by 2028, driven by a solid double-digit compound annual growth rate (CAGR).
The significance of these projections transcends mere financial metrics; they reflect an evolutionary shift in how businesses leverage technology to enhance operational efficiency and drive innovation.
At its core, edge computing pertains to the technology-related operations conducted outside of centralised data centres, serving as a crucial intermediary between connected endpoints and the broader IT environment.
Decentralised approach
The decentralised approach is essential in addressing the increasing demand for real-time data processing and analytics, particularly as the focus of artificial intelligence (AI) pivots from training to inference.
Dave McCarthy, research vice president at IDC, said that edge computing is vital for mitigating latency and bolstering privacy, thereby optimising operational efficiencies while enabling the development of new business models previously unattainable through centralised infrastructure.
“By distributing applications and data to edge locations, businesses can facilitate faster decision-making processes and alleviate network congestion, rendering operations more agile and responsive to real-time dynamics.”
The breadth of the edge ecosystem encompasses an array of technologies and services, including computing infrastructure—such as servers, storage, and networking equipment—alongside diverse software solutions ranging from system infrastructure to security measures.
Professional services, implementation strategies, and provisioned services delivering cloud-based technologies further enhance the capabilities of edge computing in various sectors.
Use cases soar
Among the various sectors, manufacturing represents the largest share of edge spending, where edge computing facilitates real-time monitoring of equipment and processes.
The capability is instrumental in minimising downtime and optimising operational efficiency. For instance, AI-driven predictive maintenance empowers companies to identify potential issues before they escalate into costly breakdowns, revolutionising maintenance strategies and driving down operational costs.
Similarly, in the utilities sector, edge computing plays a crucial role in the management of critical infrastructure, encompassing electricity, water, and gas utilities. The integration of edge solutions is essential for processing vast quantities of data quickly and securely, thereby supporting the transition toward smarter grids and a more decentralised energy landscape.
The financial services industry has emerged as the fastest-growing domain in terms of edge computing expenditures. With the proliferation of AI-powered services, banks are reimagining their data management strategies, enhancing fraud detection and enriching customer interactions through real-time data processing.
Use cases in banking, such as AI-optimised operations and augmented fraud analysis, exemplify how edge computing fundamentally transforms traditional business processes.
Alexandra Rotaru, manager, Data & Analytics, IDC Europe, said that 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.
Service providers
“Key technologies like AI-powered devices, edge servers with GPUs, and 5G connectivity are gaining traction, enabling organisations to process data closer to the source and achieve higher performance.”
In this journey, he said that 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, IDC expects 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.
Discover more from TechChannel News
Subscribe to get the latest posts sent to your email.