Global investment on edge computing is anticipated to reach $232 billion in 2024, a 15.4% rise from 2023. The new forecast from the IDC Worldwide Edge Spending Guide shows that enterprise and service provider spending on hardware, software, professional services, and provisioned services for edge solutions will continue to grow rapidly through 2027, when spending is expected to reach nearly $350 billion.
According to IDC (International Data Corporation), edge refers to activities associated to information and communications technology (ICT) that are carried out outside of a centralized data center. Edge serves as a bridge between connected endpoints and the main IT environment.
Edge is characterized as flexible, software defined, and distributed. Moving processing power to the actual site where data is generated, exchanged, or kept may increase the value of edge computing by facilitating business choices, processes, and intelligence outside of the main IT system.
“Edge computing will play a pivotal role in the deployment of AI applications,” said Dave McCarthy, Research Vice President, Cloud and Edge Services at IDC. “To meet scalability and performance requirements, organizations will need to adopt the distributed approach to architecture that edge computing provides. OEMs, ISVs, and service providers are taking advantage of this market opportunity by extending feature sets to enable AI in edge locations.”
Within the service provider sector, infrastructure expenditures for virtual network functions, content delivery networks, and multi-access edge computing (MEC) provide the foundation of investments for the delivery of edge services, according to IDC. This year, approximately twenty-two percent of all edge expenditure will go toward these three use cases combined.
IDC examples of edge named use cases with significant investments and fast growth through 2027 for enterprise adopters, including the public sector, include supply chain resilience, augmented diagnosis and treatment systems, production asset management, AI-augmented supply and logistics, augmented maintenance (augmented reality), in-home remote patient monitoring, and in-store contextualized marketing.
Over the 2022–2027 period, according to IDC, it is anticipated that the following emerging edge use cases will see the fastest growth in spending: augmented training (multiple industries), autonomous mining operations, site design and management (construction), pipeline inspection (utilities), and expert shopping advisors & product recommendations (retail).
“Enterprise investments have continued to shift the past 24 months toward infrastructure expansion and greenfield deployments. Companies are acting on plans to build more robust local computing infrastructure capabilities. And through it all, customer-facing new services and products and enabling new business processes are top enterprise drivers,” said Marcus Torchia, Research Vice President, Data & Analytics at IDC. “Over the next two years, the share of planned investments moderately favor MEC offerings. Yet in the balance, enterprises are looking to rationalize total service provider outlays. This sets up a dynamic market of capex and OPEX based edge offerings competing for investment dollars through 2027.”
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Servers, Network Equipment, Edge Gateway Purchases
The scale of discrete and process manufacturing alone will drive the majority of edge solution expenditures across enterprise end user industries this year, with the retail and professional services sectors following closely after. IDC projects five-year compound annual growth rates (CAGRs) in the low-to-mid teens for each of the 19 business sectors included in the expenditure guide. At 19.1%, the service provider category is expected to grow at the fastest rate.
At about 40% of overall expenditure, hardware will continue to be the greatest investment share as edge capabilities are developed, particularly those driven by service provider infrastructure. Servers, network equipment, and edge gateway purchases will be the main drivers of hardware expenditure. The predicted period indicates a significant increase in the use of provided services by organizations, which will exceed hardware share by 2026 for the first time.
Connectivity and IaaS will have the largest market shares and the quickest rates of growth among the supplied service categories, respectively. Despite being the least expensive category overall, on-premise software will be an essential part of edge infrastructure.
Geographically speaking, during the course of the predicted period, North America will lead the globe in edge expenditure, accounting for over 40% of global spending. Western Europe and China will follow, respectively. With compound annual growth rates (CAGRs) of 16.2% and 15.3%, respectively, China and the Middle East and Africa will have the fastest expenditure rise throughout the five-year estimate.
About IDC’s Worldwide Edge Spending Guide
The IDC Worldwide Edge Spending Guide forecasts expenditure by business and service providers across 22 technology marketplaces, six technology domains, 19 enterprise sectors, and nine geographic areas in order to quantify the edge computing industry. More than 500 application cases divided across different businesses and areas are included in this most recent IDC Edge SG edition.
