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 with 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) form the basis for investments for the delivery of edge services, according to IDC. This year, around twenty-two percent of all edge expenditure will be used on 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, are 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.
Throughout the 2022–2027 period, according to IDC, the following emerging edge use cases are expected to 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 persistently shifted over the past 24 months towards infrastructure expansion and greenfield deployments. Businesses are putting into action plans to build more robust local computing infrastructure capabilities. At the same time, new customer-facing services and products, as well as enabling new business processes, are the top enterprise drivers,” said Marcus Torchia, Research Vice President, Data & Analytics at IDC. “Over the next couple of years, the share of planned investments somewhat favour MEC offerings. Meanwhile, enterprises are looking to rationalize total service provider outlays. This sets the stage for a dynamic market of capital and operational expenditures based edge offerings competing for investment funds through 2027.”
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Discrete and process manufacturing are predicted to lead in edge solution expenses among enterprise end user industries this year, followed by retail and professional services. According to IDC, the anticipated five-year compound annual growth rate (CAGR) is estimated to fall in the low-to-mid teens for each of the 19 business sectors included in the expenditure guide. The service provider category, with an expected growth rate of 19.1%, is forecasted to show the highest growth rate.
Hardware, accounting for roughly 40% of the total expenditure, is expected to continue being the biggest investment area as edge capabilities are developed. This is especially the case for those driven by service provider infrastructure where spendings on servers, network equipment, and edge gateways are likely to drive hardware expenses. The predicted trend shows an increase in the utilization of supplied services by organizations, which is likely to surpass hardware expenditure by 2026 for the very first time.
Of all the provided service categories, Connectivity and IaaS are predicted to hold the largest market shares and to display the most rapid growth rates respectively. Even though on-premise software falls in the least expensive category, it will be a crucial part of edge infrastructure.
North America is expected to lead the world in edge spending in the forecast period, accounting for over 40% of worldwide expenditure. Western Europe and China are next in line. China and the Middle East and Africa are anticipated to experience the most rapid growth in expenditure, with compound annual growth rates (CAGRs) of 16.2% and 15.3% respectively, over the five-year projection period.
The IDC Worldwide Edge Spending Guide predicts spending by business and service providers across 22 tech markets, six tech domains, 19 enterprise industries, and nine different regions, all to size up the edge computing sphere. Currently, the latest edition of IDC Edge SG includes more than 500 application scenario covered in various industries and regions.
