Edge Data Center Market Size to Grow by USD 22.11 billion from 2024 to 2028, 365 Data Centers & Compass Datacenters LLC to emerge as some of the key companies, Technavio

NEW YORK, March 15, 2024 /PRNewswire/ -- The Edge Data Center Market is projected to reach a value of USD 22.11 billion, with a CAGR of 23.57% between 2023 and 2028. Companies employ strategies like alliances, mergers, expansions, and product launches to bolster their market presence. 365 Data Centers offers network connectivity, colocation, and managed hosting services. Compass Datacenters LLC designs, installs, and maintains information centers for major cloud and content providers.

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Growth Factors:

The rapid increase in mobile data traffic notably propels market growth, fueled by digitalization, automation adoption, and IoT usage. Establishing centers in traffic hotspots can alleviate congestion and improve service speed. Market players introduce edge computing platforms to enhance data management at the network edge. For instance, Hewlett Packard Enterprise launched the HPE Edgeline EL8000 Converged Edge System in February 2021, tailored for communication service providers. Rising mobile data traffic is expected to boost market growth in the forecast period.

• One key highlight is the emerging trend of consolidating edge data centers, driven by factors like cost reduction and increased operational efficiency. Consolidation projects can lead to significant savings, improved security, and reduced power consumption. This trend is gaining momentum as enterprises adopt new strategies like high-density storage solutions and server virtualization, contributing to market growth and green initiatives.
• Monitoring edge data center equipment across multiple locations is a challenge hindering market growth. Decentralized power and cooling systems make maintaining real-time views difficult. Single-screen dashboards for early issue detection are needed, but deploying proactive management solutions may strain IT budgets, presenting a challenge for operators.

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Key Companies
Vendor Landscape - The global edge data center market is fragmented, with the presence of several global as well as regional vendors. A few prominent vendors that offer edge data center in the market are 365 Data Centers, Compass Datacenters LLC, DC BLOX Inc., Dell Technologies Inc., Digital Realty Trust Inc., Eaton Corp. Plc, EdgeConneX Inc., Equinix Inc., Flexential Corp., Friedhelm Loh Stiftung and Co. KG, Fujitsu Ltd., Hewlett Packard Enterprise Co., Hitachi Ltd., Huawei Technologies Co. Ltd., International Business Machines Corp., Johnson Controls International Plc, Panduit Corp., Schneider Electric SE, Vapor IO Inc., and Vertiv Holdings Co. and others.

• 365 Data Centers - The company offers network connectivity, colocation, and managed hosting services.
• Compass Datacenters LLC - The company offers information centers that design, install, and provide maintenance support for more than 200 major cloud and content provider telecom shelters.
• DC BLOX Inc. - The company offers information centers which are built to a tier III basis of design and come with 100 percent power service level guarantee.

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Segment Overview

Technavio has segmented the market based on type, End-user (IT and telecommunication, Manufacturing and automotive, BFSI, Healthcare and life sciences, and Others), Component (IT infrastructure, General construction, Power management systems, Cooling systems, and Others), and Geography (North America, APAC, Europe, South America, and Middle East and Africa). 

• The IT and telecommunication segment will significantly grow in the forecast period. In BFSI, edge centers cater to industry-specific needs, offering low-latency computing. Valued at USD 1.60 billion in 2018, these centers support critical BFSI applications like real-time transactions, ensuring security and speed. With increased digitization and technology adoption, the segment's importance in supporting BFSI operations is expected to rise further.

Geography Overview

By geography, the global edge data center market is segmented into North America, APAC, Europe, South America, and Middle East and Africa. The report provides actionable insights and estimates the contribution of all regions to the growth of the global edge data center market.

• North America contributes 48% to global market growth. Enterprises in the US and Canada drive this trend by embracing cloud services to reduce costs associated with on-premises data centers. They opt for solutions from major providers like AWS and Microsoft to meet computing needs affordably. Existing data center infrastructure, including those of companies like Apple, further fuels demand. Real estate firms also play a role in driving market expansion, leveraging technological adoption trends in the region. This trend is expected to persist, driving continued market growth in North America.

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Analyst Review:

The Edge Data Center market is witnessing significant growth driven by the proliferation of edge computing technologies. These data centers bring processing capabilities closer to the point of data generation, reducing latency and enhancing the efficiency of IoT applications and cloud services. With the exponential growth of data, network infrastructure must evolve to meet the demands of modern computing. Edge servers and micro data centers play a crucial role in supporting edge computing architecture, enabling rapid data processing and storage at the edge.

Edge computing solutions offer diverse applications across various industries, from smart cities to industrial automation. They facilitate real-time analytics, enabling actionable insights and improved decision-making. However, as edge computing deployment expands, security becomes a paramount concern. Ensuring the integrity and confidentiality of data processed at the edge requires robust security measures to mitigate potential risks.

Despite its benefits, edge computing presents challenges, including scalability and interoperability. As the market continues to evolve, edge computing providers are focusing on addressing these challenges and optimizing edge computing solutions for enhanced efficiency and performance. The edge computing market is poised for further growth, driven by advancements in technology and the increasing demand for low-latency, high-bandwidth applications across various sectors.

Market Overview:

The edge data center market is witnessing rapid growth due to the increasing demand for edge computing solutions. Edge data centers play a crucial role in processing data closer to its source, enabling faster data processing, reducing latency, and improving network infrastructure. With the proliferation of Internet of Things (IoT) devices and the adoption of cloud computing, there is a growing need for edge servers and micro data centers to handle data processing at the edge. Edge analytics further enhance the capabilities of edge computing platforms, offering efficient data processing and storage solutions. However, challenges such as security and scalability remain, highlighting the need for innovative edge computing technology and architectures to address market demands effectively.

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