The global edge computing market was valued at USD 16.45 billion in 2023 and is projected to experience substantial growth at a compound annual growth rate (CAGR) of 36.9% from 2024 to 2030. Edge computing introduces a layer of complexity for organizations by enabling a wide range of stakeholders to manage IT infrastructures, networking, software development, traffic distribution, and service management. This technology integrates software, hardware solutions, and networking architectures to address diverse use cases across various industries. Although edge computing is still in its nascent stages, its deployment and operational models are anticipated to evolve, presenting significant growth opportunities for new entrants in the market.
The COVID-19 pandemic has accelerated the adoption of data centers and edge computing technologies. However, as the uptake of these technologies increases, investment levels are expected to decline significantly in the near future. Many businesses across different sectors are cutting costs or scaling back investments in enhancing servers and software to achieve substantial savings. Nonetheless, certain sectors, particularly telecommunications and healthcare, are witnessing increased spending on edge computing and Internet of Things (IoT) technologies.
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In response to the current landscape, businesses are seizing opportunities to introduce new services. The telecommunications sector, for instance, is rapidly advancing in the development of video conferencing solutions like Microsoft Teams and Zoom, while also innovating new offerings to satisfy the rising demand for connectivity and communication solutions.
Application Segmentation Insights
In 2023, the industrial Internet of Things (IIoT) segment emerged as the leading application in the edge computing market. Edge computing has become crucial for manufacturers striving to digitize their facilities effectively. A significant portion of edge computing is implemented as device edge within the manufacturing sector, highlighting its importance in optimizing operations. As the complexity of services increases and edge infrastructure becomes more accessible, the demand for edge solutions is expected to rise.
Additionally, the Industry 4.0 initiative provides a comprehensive framework for modernizing manufacturing in light of various industry disruptions, paving the way for the deployment of edge technologies. Industry 4.0 promotes operational agility by leveraging technologies that integrate cyber and physical systems seamlessly. In smart factories, edge platforms enable the transmission of only processed data to cloud servers, which enhances the market for AI-driven edge computing. This approach allows edge computing to analyze data locally and transmit summarized information to the cloud, streamlining operations and improving overall efficiency.
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