Edge Data Center Market Present Scenario and Growth Prospects from 2017 to 2024

North America is expected to hold a major share in the edge data center market owing to the increased use of smart devices and growing number of consumers switching to OTT. The stable economic conditions in the U.S. and Canada are boosting the growth of SMEs in the region. Increasing adoption of advanced technologies, such as IoT in industries, is also an important factor driving the regional market growth. Moreover, Asia Pacific is also projected to witness fast growth in the adoption of such data centers over the forecast timeline. Rising government initiatives for digital transformation are driving the edge data center market growth in the region.

Edge Data Center Market size is anticipated to grow at a rapid rate owing to the rising demand for data center space in smaller emerging markets. The network infrastructure and high level of computing used for operating IoT software are providing significant opportunities to the edge data center market growth. The proliferation of IoT is driving the service providers to move strategic IT assets closer to the network edge. With emerging economies investing largely in digital transformation, there has been an increase in the tier-two cities in these progressing countries.

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An increase in the adoption of IoT is a major factor driving the edge data center market in the coming years. The installed IoT base is expected to double over the forecast timespan. A central data center that serves a large geographical area faces issues, such as poor connections and congestion of data, generating a demand for edge data center market. Also, rising needs for efficient storage of data is anticipated to boost the industry demand.

A surge in the number of consumers switching to streaming video OTT is anticipated to boost the global edge data center market. Many users accessing the same content at the same time are reducing the quality of customer experience and creating a network congestion. Hosting content closer to the customer and maintaining the internet traffic locally keep the internet traffic away from broader networks and deliver a high-quality user experience. Furthermore, cloud service providers and web content companies are focusing on providing enhanced quality services to customers, which is contributing to the industry demand.

Factors such as the presence of stringent rules and regulations pertaining to the use of data centers are restraining the edge data center market growth. The providers are forced to comply with the standard rules and regulations, such as OSHA, for the operation of data centers. Complexities such as maintenance and power consumption involved with the increasing hardware and software solutions are other factors limiting the industry demand. In addition, lack of enough storage and computational capabilities built into these data centers are anticipated to have a negative impact on the edge data center market.

Based on components, the edge data center market is bifurcated into hardware, software, services, and support & maintenance. The software segment is anticipated to dominate the market in the coming years. Increasing demand for enhanced quality streaming content from end users is making cloud service providers and web content companies focus on providing a high-quality content to customers. The rapid increase in the number of users accessing streaming content, such as Hulu, YouTube, and Netflix, is a major factor contributing to the rise in the software segment. However, the hardware segment is also anticipated to grow owing to the introduction of new cooling technologies and sophisticated hardware.

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By organization size, the edge data center market is segmented into large organizations and small & medium organizations. Edge data centers enable SMEs to store, process, and collect data at the edge of the network and closer to the source, reducing the operational costs. Moreover, the rise in the number of SMEs in emerging economies is making them invest in sophisticated ways for data storage and management. Shifting content closer to the edge enables lower operational costs, which is a major factor contributing to the increased adoption of edge data centers by such businesses.

Based on verticals, the edge data center market is classified into BFSI, healthcare, IT & telecommunication, and entertainment and media. The IT & telecom segment is expected to hold the majority of the revenue share in the industry. With emerging economies trying to improve their telecom infrastructure, the edge data center market for the IT & telecom is anticipated to witness a rapid growth. Enhanced security and reduced operational costs of these data centers make them a feasible option for storing and transferring sensitive data.

Key players in the edge data center market include Edgeconnex, Rittal, Huawei Technologies Co., Ltd., Dell, Inc., Zellabox, Anixter, VXchnge, 365 Data Centers, Compass Data Centers, and Bytegrid. In September 2017, Edgeconnex announced the launch of its edge data center in Toronto to provide robust connectivity to metro area customers. The players operating in the edge data center market are increasingly focusing on collaborations and acquisitions to offer enhanced services to customers. For instance, in February 2018, Compass Datacenters announced the acquisition of edge data center startups, such as Bitbox USA and Edgepoint, with an aim to strengthen its market presence.

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