Edge Data Center Market Size - By Component (Solution, Services), By Data Center Size (Micro data centers, Hyperscale/enterprise data center), By Application & Forecast, 2024 - 2032

Edge Data Center Market Size

Edge Data Center Market size was valued at USD 10.6 billion in 2023 and is estimated to register a CAGR of over 19% between 2024 and 2032. The rise in online services such as cloud computing, streaming, e-commerce, and digital communications are driving the growth of the market. As more businesses and consumers use online platforms, the need for data processing and storage near the network edge increases. Edge data centers located closer to users reduce delays, improve service quality, and enhance user experiences. This supports real-time applications, speeds up data transfers, and lessens the load on central data centers.
 

Organizations are investing in edge data centers to fulfill these increasing demands, ensure sustainable online services, and address latency and performance challenges. For instance, in March 2022, Hewlett Packard Enterprise announced significant advancements to HPE GreenLake which includes edge computing solutions. The platform offers flexible, scalable edge infrastructure to support growing demands for data processing and storage at the edge, enabling efficient delivery of online services.
 

Colocation edge data centers allow companies to grow significantly without the high costs of building and maintaining their facilities. This flexibility attracts both local and international companies looking to expand their digital infrastructure. The increase in digital transformation projects and the rising demand for cloud services are further boosting the popularity of edge data centers. In June 2024, Amazon Web Services (AWS) received permission to build its first data center in Chile. This USD 205 million project marks a significant milestone for the company's expansion in South America and reflects the burgeoning demand for cloud services in the region.
 

Integrating green storage systems with current infrastructure while maintaining strong security involves several challenges. Specialist skills are needed to seamlessly combine new sustainable systems with existing setups without sacrificing performance. This process often requires reconfiguring networks, maintaining compatibility with older systems, and updating security standards. Additional resources, including advanced cybersecurity measures, are necessary to protect against new vulnerabilities introduced by green technology. These challenges complicate data center operations, requiring a balance between sustainability goals, high data security standards, and operational efficiency.
 

Edge Data Center Market Trends

To maximize data management, cloud service providers are expanding their infrastructure to the edge and offering hybrid cloud solutions that combine on-premises and cloud resources. By implementing edge data centers, these providers enable companies to process data closer to where it is generated, significantly reducing latency and improving performance for real-time applications. This proximity supports applications such as IoT, AI, and streaming services that require quick data processing, enhancing user experiences, and maintaining efficient centralized cloud management. Businesses can benefit from the cloud's advanced services, scalability, and flexibility while keeping centralized cloud management.
 

This hybrid approach allows companies to use cloud-based analytics, backup, and extensive storage for long-term data needs, while local edge resources handle immediate data demands. This results in a more cost-effective, responsive, and efficient IT infrastructure that meets the needs of modern applications and complies with legal regulations. In January 2024, IBM and American Tower announced a strategic collaboration aimed at enhancing edge cloud services for enterprises. This partnership will focus on deploying a hybrid, multi-cloud computing platform at the edge, leveraging both companies' strengths in digital infrastructure and cloud technologies.
 

Edge Data Center Market Analysis

Based on data center, the market is divided into micro data center, hyperscale/enterprise data center, and others. In 2023, the hyperscale/enterprise data center segment accounted for a market share of around 45%. As edge computing grows, distributed data processing is becoming increasingly important. Hyperscale data centers, known for their huge size and capacity, handle large amounts of data processing and storage, supporting global cloud services. These data centers allow for real-time data handling with minimal delay by placing processing power closer to the end users. To meet growing market demand, major market players are launching new solutions.
 

For instance, in January 2024, TA Realty launched a dedicated hyperscale data center development arm, enhancing its footprint in the digital infrastructure sector. This new division will be led by Tim Shaheen, a seasoned professional with over 20 years of experience in the data center and IT industries, who previously held executive roles at EdgeConneX and Aligned Data Centers.
 

Based on application, the market is categorized into BFSI, colocation, energy, government, healthcare, manufacturing, IT & Telecom, and others. The IT and telecom segment accounted for around USD 2.8 billion in market revenue in 2023. The rollout of 5G networks increases the need for edge computing because 5G requires high-speed, low-latency data processing. Edge data centers help by placing computing resources closer to users, which shortens the distance data must travel. This proximity helps achieve the very low latency needed for 5G applications such as augmented reality, real-time streaming, and autonomous vehicles.
 

North America dominated the global edge data center market with a major share of over 40% in 2023, driven by substantial investments from major technology companies and data center operators. These tech giants are spending significant amounts to develop and implement edge infrastructure, aiming to improve data processing capabilities and reduce latency. These investments are leading to the construction of many edge data centers across the region, enabling better performance and localized data management for advanced technologies such as 5G and IoT.
 

Regulations in European countries, especially the General Data Protection Regulation (GDPR), prioritize data security and privacy. GDPR mandates that businesses handle personal data with strict security measures. To comply, organizations are encouraged to process and store data locally, reducing the risk of breaches and unauthorized access during cross-border transmission.
 

The demand for low-latency services is driven by the Asia Pacific region's vast and rapidly expanding population of internet and mobile users. Additionally, fast, and dependable internet is increasingly important as more people use online services for social media, e-commerce, gaming, and streaming. By processing data closer to users, edge data centers significantly reduce latency and increase service reliability, effectively meeting this demand.
 

Edge Data Center Market Share

Huawei and Dell dominate the market with around 12% market share in 2023. Huawei offers a broad range of edge data center solutions, including modular data centers, advanced cooling systems, and efficient power management. Their products are designed to integrate seamlessly with their cloud and network solutions. Huawei invests in research and development to drive innovation in edge data center technologies. They focus on developing cutting-edge hardware and software solutions, including AI-driven management systems and energy-efficient designs.
 

Dell Technologies emphasizes integrating its edge data center solutions with its broader ecosystem, including cloud services, networking, and security solutions. Their offerings include modular data centers and edge-specific hardware optimized for performance and scalability. The company incorporates advanced analytics and artificial intelligence (AI) into its edge data center solutions to enhance data processing capabilities and operational efficiency. Their solutions leverage AI for predictive maintenance, real-time monitoring, and performance optimization.
 

The demand for low-latency services is driven by the Asia Pacific region's vast and rapidly expanding population of internet and mobile users. Additionally, fast, and dependable internet is increasingly important as more people use online services for social media, e-commerce, gaming, and streaming. By processing data closer to users, edge data centers significantly reduce latency and increase service reliability, effectively meeting this demand.
 

Edge Data Center Market Companies

The major players operating in the edge data center industry are:

• Dell
• Eaton
• Fujitsu Ltd.
• HPE
• Huawei
• IBM
• NVIDIA
• Rittal
• Schneider
• Vertiv, Co.
   

Edge Data Center Industry News

• In February 2024, NTT DATA, a global player in IT infrastructure and services, and Schneider Electric, partnered to unveil a first-of-a-kind co-innovation that empowers enterprises to harness the power of edge computing. The strategic partnership introduces a unique solution that seamlessly integrates Edge Data Centers, providing unparalleled connectivity and supporting the computational demands of Generative AI applications deployed at the edge.
   
• In January 2024, IBM and American Tower announced a strategic collaboration aimed at enhancing edge cloud services for enterprises. This partnership will focus on deploying a hybrid, multi-cloud computing platform at the edge, leveraging both companies' strengths in digital infrastructure and cloud technologies.
   
• In April 2024, nLighten acquired seven edge data centers from EXA Infrastructure. This expanded nLighten's European footprint to include new markets in Belgium, Switzerland, and Spain, while also growing its presence in existing markets like France, the UK, and the Netherlands.
   

The edge data center market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD Billion) from 2021 to 2032, for the following segments:

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Market, By Component

• Solution
  • Cooling
  • Power
    • UPS
  • IT racks & enclosures
  • Networking
  • DCIM 
• Services
  • Installation & integration
  • Managed
  • Consulting

Market, By Data Center Size

• Micro data centers
• Hyperscale/enterprise data center
• Others

Market, By Application

• BFSI
• Colocation
• Energy
• Government
• Healthcare
• Manufacturing
• IT & Telecom
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • UK
  • Germany
  • France
  • Spain
  • Poland
  • Benelux
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • Singapore
  • Australia
  • Rest of Asia Pacific
• South America
  • Brazil
  • Colombia
  • Chile
  • Argentina
  • Rest of South America
• MEA
  • GCC
  • South Africa
  • Rest of MEA