Skip to main content

Managed Edge Services Market to Reach $445.3 Million

Cloud computing infrastructure is moving out to the edge of enterprise networks as more organizations explore ways to re-engineer their architecture in support of new and emerging information technology (IT) use cases.

Managed cloud edge services will become a high-growth market as enterprises look for low-latency edge services to address process efficiencies, support new applications, comply with data sovereignty, and deal with IT security threats.

According to the latest global market study by International Data Corporation (IDC), worldwide revenues for managed edge services will reach $445.3 million in 2021 -- that's an increase of 43.5 percent over 2020. Over the 2021-2025 forecast period, the compound annual growth rate (CAGR) for managed edge services will be 55.1 percent.

Managed Edge Services Market Development

Given the nascent demand for managed edge services, a wide range of IT service providers and business technology vendors are looking at this market as the next big revenue growth opportunity.

IDC believes public cloud providers will be key enablers of edge services through the partnerships they are establishing with 5G mobile network service providers. Some are considering edge services as the catalyst for the fourth industrial revolution, while content delivery network (CDN) providers are already shifting their investments toward edge applications.

"Managed edge services represent a significant monetization opportunity for service providers to capitalize on their investment in edge compute," says Ghassan Abdo, vice president at IDC.

At the same time, service providers are aware of the potential impact of the edge on their market position and are watching closely for unforeseen competition from adjacent markets and new disruptors.

Technology vendors including network equipment providers (NEPs), enterprise software, data center, and networking vendors are all vying to shape this market and play a role in delivering edge services.

Based on extensive discussions with service providers and technology vendors, IDC has identified three primary deployment models for managed cloud edge services.
  • On-premises deployment: This represents managed edge use cases where the edge compute infrastructure is deployed at the enterprises' premises, also referred to as private deployment. This deployment model is intended to address the need for extra low latency and is applicable to industrial use cases, healthcare, and AR/VR applications.
  • Service provider edge deployment: This represents managed edge services provided by edge compute deployed at the provider edge, both fixed and mobile. IDC expects this deployment model to spur the development of a wide range of vertical use cases.
  • CDN edge deployment: This represents managed edge services provided by edge compute deployed at the CDN POPs or edge locations. These use cases will enhance content delivery with personalized, high-fidelity, and interactive rich media customer experience.

Outlook for Edge Services Applications Growth

IDC predicts that the on-premises edge will be the fastest-growing segment with a five-year CAGR of 74.5 percent. The service provider edge will be the second-fastest growing segment with a CAGR of 59.2 percent, which will enable it to become the largest market segment by 2022. Meanwhile, the CDN edge segment is expected to have a five-year CAGR of 41.9 percent.

I anticipate that the leading IT colocation facility service providers will also experience new growth opportunities as more CIOs and CTOs search for lower-cost methods to deploy infrastructure in managed facilities that provide multi-tenant services.

Note, this is the first forecast provided by IDC on this new and developing market. I believe that as other IT industry analysts cover this sector, we'll likely learn more about the competition for customers with the development of additional offerings.

Popular posts from this blog

Digital Transformation Spending Reaches $1.8 Trillion

Ongoing investment in business technology will remain on track, despite concerns about the global economic outlook which continues to evolve in 2022. Enterprise CIOs and CTOs are focused on operational profitability and digital business growth goals that are enabled by strategic IT initiatives. Global spending on the Digital Transformation (DX) of business practices, products, and organizations is forecast to reach $1.8 trillion in 2022 -- that's an increase of 17.6 percent over 2021, according to the latest market study by International Data Corporation (IDC). Many anticipated DX investments will sustain this pace of growth throughout the 2021-2025 forecast period, with a five-year compound annual growth rate (CAGR) of 16.6 percent. Digital Transformation Global Market Development "IDC expects to see aggressive DX technology investment growth in 2022 following a minor slowdown during the pandemic period," said Craig Simpson, senior research manager at IDC . "As orga

Why Cloud-Native is The Future of IT Spending

The leading organizations that create a digital transformation plan will gain the most from their use of public cloud computing. However, some CIO and CTO leaders still struggle with how to build a modern cloud migration strategy. The worldwide cloud computing Infrastructure as a Service (IaaS) market grew 41.4 percent in 2021, to a total of $90.9 billion -- that's up from $64.3 billion in 2020, according to the latest market study by Gartner. "The IaaS market continues to grow unabated as cloud-native becomes the primary architecture for modern workloads," said Sid Nag, vice president and analyst at Gartner . Cloud IaaS Market Development Cloud supports the scalability and composability that advanced technologies and applications require, while also enabling enterprise leaders to address emerging needs such as sovereignty, data integration, and enhanced customer experience. In 2021, the top five IaaS providers accounted for over 80 percent of the market. Amazon AWS conti

Private 5G Networks and Enterprise Wi-Fi Converge

The global enterprise wireless networking market is evolving. Driven by a desire to take advantage of the available 6 GHz communications spectrum, with greatly improved broadband throughput and latency rates, more organizations may choose to adopt Wi-Fi 6E technologies. According to the latest worldwide market study by ABI Research, shipments of Wi-Fi 6E access points and routers will rise from 1.5 million units in 2022 to 5.2 million units by 2024. Wireless spectrum expansion is just one facet of the commercial wireless network market transition, as the technology of Wi-Fi customer premise equipment will be upgraded once again with Wi-Fi 7 (IEEE 802.11be standard) devices. Enterprise Wireless Network Market Development "The adoption of Wi-Fi 7 access points will accelerate following the protocols standardization in 2024, and just two years later, most 6 GHz enabled access point shipments will be supporting Wi-Fi 7," said Andrew Spivey, industry analyst at ABI Research . Anot