Worldwide spending on edge computing is expected to be $208 billion in
2023, an increase of 13.1% over 2022. Enterprise and service provider
spending on hardware, software, and services for edge solutions is
forecast to sustain this pace of growth through 2026 when spending will
reach nearly $317 billion, according to the International Data
Corporation (IDC)
Worldwide Edge Spending Guide.
IDC defines edge as the technology-related actions that are performed
outside of the centralized datacenter, where edge is the intermediary
between the connected endpoints and the core IT environment.
Characteristically, 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 core IT environment.
"Edge computing has gone mainstream," said Dave McCarthy,
research vice president, Cloud and Edge Infrastructure Services 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% of all edge spending
this year. In total, service providers will invest more than $44 billion
in enabling edge offerings in 2023.
For enterprise adopters, including the public sector, the edge named 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% of all edge spending this year. The
edge use cases that are forecast to have the fastest spending growth
over the 2021-2026 period include emergency response, 360 degree
educational video viewing, film/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," said Alexandra Rotaru,
senior research analyst, Data & Analytics group at IDC. "Metrics
related to enhanced innovation, performance, customer experience, or
cybersecurity capabilities will enable companies 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 profiled in the
Spending Guide 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%.
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. Software will remain the smallest technology category over
the forecast period.
From a geographic perspective, the United States will be the edge
spending leader throughout the forecast period delivering more than 40%
of the worldwide total, followed by Western Europe and China. Latin
America and China will experience the fastest spending growth over the
five-year forecast with CAGRs of 18.1% and 18.0%, respectively.
The IDC Worldwide Edge Spending Guide
quantifies the edge computing market by forecasting enterprise and
service provider spending across 17 technology markets, six technology
domains, 19 industries, and nine geographic regions. This version (V2
2022) of the Spending Guide also includes more than 400 use cases that
were segmented across various industries and domains.