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Global Edge Computing Demand is Mainstream

Enterprise CIOs and CTOs continue to explore the use cases and business applications for cloud edge computing. Moreover, CEOs and CFOs continue to fund IT digital transformation initiatives that support new growth and increased profitability.

Worldwide spending on edge computing will reach $208 billion in 2023 -- that's an increase of 13.1 percent over 2022.

Spending on hardware, software, and services for edge solutions will sustain this pace of growth through 2026 when new investment is forecast to reach $317 billion, according to the latest global market study by International Data Corporation (IDC).

Edge Computing Market Development

IDC defines edge as the technology-related actions that are performed outside of the centralized data center, where the edge is the intermediary between the connected endpoints and the core IT environment.

The cloud computing edge is distributed, software-defined, and flexible. The value of edge is the movement of computing resources to the physical location where data is created, dramatically reducing time to value and the instant enablement of business processes, decisions, and intelligence outside of the central IT environment.

"Edge computing has gone mainstream," said Dave McCarthy, research vice president at IDC. "The ability to distribute applications and data to field locations is a key element of most digital transformation initiatives. As vendors extend existing feature sets and create new edge-specific offerings, customers are accelerating their adoption plans."

IDC has identified more than 400 named use cases for edge computing across various industries and domains.

The three edge use cases that will see the largest investments in 2023 -- content delivery networks, virtual network functions, and multi-access edge computing (MEC) -- are foundational to service providers' edge services offerings.

Combined, these three use cases will account for nearly 20 percent of all edge computing spending this year. In total, service providers will invest more than $44 billion in enabling edge offerings in 2023.

The edge computing use cases with the largest investments in 2023 include production asset management, autonomic operations, omni-channel operations, freight monitoring, and augmented customer service agents.

Combined, these use cases will represent more than 10 percent of all edge spending this year.

The edge computing use cases that will have the fastest spending growth over the 2021-2026 forecast period include emergency response, 360-degree educational video viewing, film or feature production, and lab and field (K-12).

Despite different headwinds impacting buyers’ spending behavior, especially in Europe, edge computing remains one of the most resilient and attractive areas of investments, growing globally at a double-digit rate over the next five years.

According to the IDC assessment, metrics related to enhanced innovation, performance, customer experience, or cybersecurity capabilities will enable organizations across the world to expand their budget and build new edge infrastructures.

Across enterprise end-user industries, discrete and process manufacturing will account for the largest portion of investments in edge solutions this year, followed by the retail and professional services industries.

IDC expects all 19 industries that they profiled will experience double-digit spending growth over the forecast period -- led by the service providers with a five-year compound annual growth rate (CAGR) of 21.1 percent.

The largest part of spending in edge will go toward services, comprised of professional and provisioned services, in 2023.

Connectivity services will represent nearly half of this portion, followed by Software as a Service (SaaS) and support & deployment services. Hardware spending will be driven by investments in edge gateways, servers, and network equipment.

However, software will remain the smallest technology category over the forecast period.

Outlook for Edge Computing Regional Apps Growth

From a geographic perspective, the United States will be the edge spending leader throughout the forecast period delivering more than 40 percent of the worldwide total, followed by Western Europe and China.

IDC analysts predict that Latin America and China will experience the fastest spending growth over the five-year forecast with CAGRs of 18.1 percent and 18 percent, respectively.

That said, I anticipate that the ongoing adoption of distributed working models will drive more IT and business leaders to consider the applications for digital workspace solutions that take advantage of public cloud edge computing benefits.

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