The global edge computing market size was valued at USD 3.5 billion in 2019, registering a CAGR exceeding 37% from 2020 to 2027. IoT-edge partnership is expected to revolutionize data computing and account for various corporate gains for those looking to leverage and harness the power of data analytics in developing solutions for major industry verticals. Moreover, to cope up with the challenges of network latency and the need for immediate real-time insights has led to the evolution of multi-locational hybrid data architectures that store data locally at the edge. Furthermore, surging enterprise demand for more powerful computing at the edge has resulted in companies to offer AI-enabled edge solutions.
Edge computing for IoT (Internet of Things) is expected to bring some possible advantages for many IoT deployments, as compared to using the cloud to store and process data. For instance, many IoT processors deliver an increased level of automation at the edge resulting in low latency for rapid data processing. The edge IoT has the ability to reside at an operator’s regional or local datacenter, at a dedicated server, or a base station on the customer’s premises. Furthermore, companies such as Cisco Systems, Inc., Amazon Web Services, and Marlabs Inc. are innovating to offer IoT platforms based on technology.
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The latest on-device approach features lower dependency on cloud and better manage a massive deluge of data being generated by the edge IoT products. For instance, Nest Cam IQ indoor security cameras built by Google Inc. features an on-device vision processing to detect motion, recognize familiar faces, and send real-time alerts about the occurrence of specific events, all by leveraging the technology. Moreover, Google Inc. has announced a Cloud IoT Edge platform that extends the Google cloud’s data processing and Machine Learning (ML) capabilities to edge devices. This software platform comes with an ML inferencing engine that can take advantage of Edge Tensor Processing Units (TPUs).
Furthermore, with edge offering several use-cases in video analytics such as real-time traffic monitoring and security and surveillance, has provided an impetus to the smart cities’ development. The integration of video analytics with edge platforms offers a mesh of fog nodes to facilitate intelligent video processing by enabling anomaly detection, real-time tracking, and data insights. Additionally, declining prices of hardware components and computation mediums have enabled wide-scale adoption of edge computing methodologies. For instance, NTT Docomo Inc. in Japan recently tested a new video IoT solution for video analytics that leverages the technology.
Report Coverage & Deliverables
The hardware segment dominated the global edge computing market in 2019. The highest percentage can be attributed to the growing cloud-based applications where the server plays a crucial role, operating as the invisible computing backbone for the services on which users are dependent. The impetus growth of edge computing applications is going to demand various types of servers at many levels. One of the best examples can be Hyperconverged Server Applications, which essentially provides the equivalent of a complete data center in a single box, offering organized networking components and software-controlled storage.
The routers segment captured a revenue share of approximately 22% in 2019. With the growing number of edge data centers across various industry verticals, the role of edge routers has become incredibly important. Moreover, the router is eventually responsible for the security of the network, thereby screening out unauthorized access requests. The data centers are well equipped with versatile and powerful routers that can handle a large capacity of incoming traffic with minimal latency.
Furthermore, the edge-managed platforms segment captured significant revenue share in 2019, owing to the rising demand amongst companies to leverage stacked hardware and software capabilities. There has been an increasing trend amongst organizations to increase their budget for the (Information Technology/Operational Technology) IT/OT solutions. The convergence of IT/OT solutions has removed barriers in data transmission and processing, thereby empowering providers to deliver superior user experiences via personalized, predictive analysis. For instance, Hewlett Packard Enterprise (HPE) has started offering IT/OT converged solutions and platforms for manufacturing, oil and gas, utilities, and transportation.
Industry Vertical Insights
The energy and utilities segment captured the largest revenue share in 2019. The emerging need to bridge the gap between theoretical efficiency and the actual output of energy grids is promoting the adoption of edge computing practices amongst grid manufacturers. Furthermore, a large amount of data generated by distributed energy generation stations need to be processed and analyzed at faster rates to facilitate efficient data-driven decision making. Smart functionalities such as Automatic Meter Reading (AMR), remote control of distributed generators, grid automation, and real-time analysis of power flows are some of the driving factors which are aiding the industry growth.
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The industrial segment captured significant revenue share in 2019. Advancement in industrial automation technology due to the fusion of edge computing elements in smart machines has enabled manufacturers to increase the efficiency of their production lines and develop high-quality products. Additionally, reduced complexity in interconnected systems due to the presence of edge computing framework facilitates easier data collection and analysis, thus offering growth prospects to the industry growth. Furthermore, edge computing in smart manufacturing has enabled the machines on the factory floor to extract insight and formulate actions on a real-time basis. Moreover, combining technology with 5G is expected to offer new growth avenues for the development of smart factories.
North America accounted for the largest revenue share of more than 46% in 2019. The convergence of edge computing with the Industrial Internet of Things (IIoT) has emphasized manufacturers in the U.S. to move towards connected factories. Additionally, the emergence of several startups providing platforms to develop an edge-enabled solution is driving the industry growth in the region. For instance, telecom companies in Canada, such as Telus Communications, are working with MobiledgeX, Inc. to develop the MobiledgeX Early Access Programme, which is expected to empower developers to build, experiment, and gauge the effectiveness of edge-enabled applications in a low latency atmosphere.
Furthermore, the Asia Pacific region is expected to register the highest CAGR from 2020 to 2027. The data center operators and enterprises in the Asia Pacific region are expected to build edge data centers to cope up with better IoT device management and edge computing when 5G networks are in place. Moreover, the region is playing a major role in developing new AI (Artificial Intelligence) technologies, with the opening of Microsoft Corporation’s research labs in China and India. Furthermore, companies in the region such as China Unicom deployed a virtual edge-cloud testbed in Tianjin city for security monitoring and video optimization.
Edge Computing Market Share Insights
Amazon Web Services (AWS), Inc.; Cisco Systems, Inc.; General Electric Company; Intel Corporation; Huawei Technologies Co. Ltd.; Microsoft Corporation.; and Hewlett Packard Enterprise Development LP are some of the major players maneuvering the dynamics of the market. The need to provide AI-enabled stack platforms has led key players to develop high-functionality products by leveraging edge computing. Organizations are developing these platforms to fulfill the needs of diverse industries, such as manufacturing, retail, healthcare, telecom, and smart cities. For instance, NVIDIA Corporation has developed a platform, the NVIDIA EGX Platform, which is expected to bring real-time AI to the edge, thus promising enhanced user experience.
Edge providers are undertaking strategic initiatives such as partnerships and collaborations to offer a broader range of services to its customers. For instance, Verizon Communications, Inc. and Amazon Web Services, Inc. announced a partnership to provide a 5G cloud edge computing platform for its customers to empower IoT capabilities, develop new applications, and foster innovations. Verizon Communications, Inc. has also developed a new platform, ThingSpace, which provides developers to develop and launch wireless IoT devices and solutions on edge.