The global Edge Computing Market is estimated to be valued at US$53.6 billion in 2023 and is expected to exhibit a CAGR of 15.7% over the forecast period 2023-2028, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Edge computing refers to the processing and analysis of data closer to the source of generation, rather than sending it to a centralized cloud server. This technology offers several advantages such as reduced latency, improved data security, and enhanced network efficiency. With the increasing adoption of IoT devices and growing demand for real-time data processing, the edge computing market is expected to witness significant growth. Furthermore, industries such as manufacturing, healthcare, transportation, and retail are increasingly leveraging edge computing solutions to enable faster decision-making and optimize operational efficiency.
Market Key Trends:
One key trend in the edge computing market is the integration of Artificial Intelligence (AI) and Machine Learning (ML) algorithms. Organizations are leveraging AI and ML capabilities at the edge to enable intelligent processing of data and enhance real-time decision-making. This integration allows edge devices to analyze and process data locally, eliminating the need to transfer large volumes of data to the cloud, thereby reducing latency and improving overall system performance. Additionally, the use of AI and ML at the edge enables predictive analytics, anomaly detection, and optimization of industrial processes. As a result, the integration of AI and ML algorithms in edge computing solutions is expected to drive market growth in the coming years.
Porter’s Analysis
Threat of New Entrants: The edge computing market poses a moderate threat of new entrants. While the market is growing rapidly, barriers to entry remain due to the high level of technological expertise required and the need for significant investment in infrastructure and research and development. However, the increasing demand for edge computing solutions may attract new players in the future.
Bargaining Power of Buyers: The bargaining power of buyers is moderate in the edge computing market. With a wide range of key players offering edge computing solutions, buyers have the flexibility to choose from different options. However, as edge computing becomes more mainstream, buyers may gain more bargaining power as competition among suppliers intensifies.
Bargaining Power of Suppliers: The bargaining power of suppliers is moderate to high in the edge computing market. Key players in the market, such as Microsoft, IBM, and Cisco Systems, have strong market positions and significant technological capabilities. This gives them some control over pricing and terms of supply. However, as the market continues to grow and new suppliers enter the market, supplier power may decrease.
Threat of New Substitutes: The threat of new substitutes is relatively low in the edge computing market. Edge computing offers distinct advantages over traditional cloud computing, such as reduced latency and improved data security. While there may be alternative technologies in the future, edge computing is expected to remain the preferred choice for certain use cases.
Competitive Rivalry: The competitive rivalry in the edge computing market is high. Key players, including Microsoft, IBM, and Google, are continuously innovating and investing in research and development to stay ahead in the market. Moreover, the market is witnessing the entry of new players, leading to increased competition. However, the market is large enough to accommodate multiple players, and collaboration among key players is also observed.
Key Takeaways
The global Edge Computing Market Demand is expected to witness high growth, exhibiting a CAGR of 15.7% over the forecast period (2023-2028). This growth can be attributed to the increasing adoption of IoT devices and the need for real-time data processing and analysis. Edge computing allows organizations to process data closer to the source, reducing latency and enabling faster decision-making.
In terms of regional analysis, North America is expected to be the fastest-growing and dominating region in the edge computing market. This can be attributed to the presence of major technology companies, increasing investments in IoT infrastructure, and the need for efficient data processing and analytics. Other regions, such as Europe and Asia Pacific, are also witnessing significant growth in the adoption of edge computing solutions.
Key players operating in the edge computing market include Microsoft Corporation, IBM Corporation, Cisco Systems Inc., Google Inc., Hewlett Packard Enterprise Company, Intel Corporation, Schneider Electric SE, Nokia Corporation, Huawei Technologies Co. Ltd., and Aricent Inc. These key players are focusing on expanding their product portfolios, partnering with other industry players, and investing in research and development to stay competitive in the market.
Overall, the edge computing market presents significant growth opportunities due to the increasing demand for real-time data processing and analysis. Key players are actively investing in innovation and collaboration to stay ahead in this competitive landscape.
Edge computing is a solution that facilitates data processing at the source of data generation. Integrated with the internet of things that is IoT, the possible sources of data generation are things with the sensors or other embedded devices. Edge computing is a decentralized extension of campus, data center networks or cloud.
With the general forecast of 30 billion IoT devices, the total amount of data stored in the cloud will be difficult to imagine. For improving the performance and reducing the overall operational costs, there has to be a way out. The best solution for handling the data outside is through the cloud or the edge.
