The Edge Data Center Market

Edge data centers are smaller versions of standard data centers that are located near the edge of the network. They usually serve as the connection point between end-user devices, the network, and primary data centers.

Edge data centers allow for accelerated performance by lowering the latency for data access.

See below to learn all about the global edge data center market:

See more: The Best Data Center Companies

Edge data center market

The edge data center market is estimated to be valued at $9.3 billion in 2022. It’s projected to maintain a compound annual growth rate (CAGR) of 17% from 2022 to 2026, reaching $18.1 billion by the end of it.

The solutions segment of the market is expected to maintain a CAGR of 15.9%, reaching $14.1 billion by 2026. The services segment currently accounts for 26.7% of the global edge data center market.

Regionally, the edge data center market is segmented as follows:

• The U.S. market is estimated at $4.3 billion in 2022, with a 46.2% share
• The Chinese market is forecast for a CAGR of 17.8%, reaching $1.6 billion by 2026
• Japan and Canada are forecast to grow at a CAGR of 14.9% and 14.7% over the forecast period
• Within Europe, Germany is projected to maintain one of the highest CAGRs at 15.7%
• The rest of the European market is projected to reach $943.9 million by the end of the period

By industry, demand in the edge data center market is being driven by the energy and utility sectors, with an estimated share of over 15% in 2021.

Other notable industries include:

• Health care
• Agriculture
• Transportation
• Logistics
• Retail
• Wearables
• Smart cities, homes, and buildings

Edge data center features

At their core, edge data centers aren’t that different from standard data centers used within large networks. There are, however, a number of characteristics that differentiate edge data centers, such as:

Location in the network

Edge data centers are named after their location in the network. They’re positioned as close to end-user devices as possible.

Size

Edge data centers are considerably smaller, which makes them suitable for processing simple real-time operations in direct communication with the end-user device.

Ease of maintenance

Edge data centers are designed with ease of maintenance in mind, as they tend to be spread out over a larger geographical area.

Data type

Data centers at the edge tend to house the most in-demand and mission-critical data that end-user devices would need to access and process at high speeds and with low latency.

Network connectivity

A single edge data center can either be connected to the central network of data centers or to a network of other edge data centers.

Edge data centers are available in two common types, depending on their role and how they connect to the larger network.

Hub edge data centers

Located at the center of the data center network, a hub allows users to connect to the central data centers. 

Mobile edge data centers

Mobile edge data centers, also known as spoke edge data centers, are even smaller data centers, located farther toward the edge of the network. They are the connection point between individual end users and the hub edge data centers.

Machine learning at the edge

The energy consumption of the data center industry has been steadily growing as more companies adopt the technology on a wider scale. However, consumption levels can be curbed through the efficient use of specialized edge data centers alongside machine learning (ML).

Using machine learning solutions at the edge can help with intelligent decision-making on data flow and help data center efficiency with edge data.

“Through edge computing and machine learning, we can actually significantly reduce the amount of time — and hence, power — data centers need to use to process data,” says David Flower, a member of the Forbes Technology Council.

“To take full advantage of the compute resources at the edge, enterprises must be able to locally store, use, and, most importantly, aggregate data, meaning discard any unnecessary data and send only what’s necessary from the edge to the data center.”

See more: How Data Centers are Used by Bosch, PayPal, Groupon, Orange, and Suez: Case Studies

Benefits of edge data centers

The use of edge data center solutions in the right environment and application has numerous benefits, such as:

• Prompting network resiliency
• Enabling network scalability
• Saving IT infrastructure costs
• Allowing for customizability
• Reducing network latency
• Boosting network security
• Boosting network processing power

Edge data center use cases

Here are several examples of how organizations in different industries are use edge data centers in their networks:

Joyn

Joyn is Germany’s streaming video service that’s part of the media company ProSeibenSat.1. It combines both on-demand content and exclusive programming with live TV.

As the platform grew, Joyn faced the increasing expenses of storing on-demand video content in data centers. It sought a solution to upgrade its data storage infrastructure that increases flexibility and availability of content.

Working with AWS and using Amazon Snowball Edge Storage Optimizer, Joyn strategically hosted its data on the edge by migrating its content entirely to AWS cloud data centers. It also used Amazon S Intelligent-Tiering to store content based on demand.

“Joyn is a cloud-first media service built on AWS, so we knew that moving our archive using AWS Snowball Edge would be fast, simple, and secure, but we’ve also been impressed by how cost-effective it was,” says Stefan Haufe, media engineer, Joyn.

“Now that all of our content is easily accessible in the cloud, we can quickly transcode and deliver content to audiences that they can’t find on any other streaming service.”

As a result, Joyn was able to save over $500,000 on on-premises data centers every year and dynamically optimize its storage solutions without increasing its total cost of ownership (TCO).

Hemnet

Hemnet is a platform for accessing the Swedish housing market online for buyers and sellers.

Hemnet wanted to accommodate buyers looking for property outside of Sweden by creating an abroad section, called Utland, that’s separate from its primary platform. 

Working with Cloudflare, Hemnet made its static website accessible in over 90 countries. Each visitor is redirected to the data center that’s closest to their location, reducing end-to-end latency and optimizing site performance.

“Cloudflare Workers (and the Page Rules) allowed us to quickly launch Hemnet Utland on our main domain without touching that code base. A big plus was also the way our small product team was able to quickly build and set up the site with minimal help from our platform team,” says Christoffer Hamberg, technical director, Hemnet.

“Performance is a fundamental part of the user experience and Hemnet wants to provide a best-in-class experience for our users.”

Working with Cloudflare, Hemnet was able to launch Utland from its main website domain without straining local resources. It also estimates it evaded over 100,000 cyberthreats a month due to Cloudflare’s Advanced DDoS Protection.

Nipa Cloud

Nipa Cloud is a provider of cloud services for businesses looking to switch to the cloud. Based in Bangkok, it provides customers with object storage that gives them easy access to the data.

Nipa Cloud needed to upgrade its IT infrastructure, offering its clients quality on a global scale and the flexibility of a local provider.

Working with Juniper Network, Nipa wanted to extend its network of cloud servers and data centers to the edge to prepare for wide-scale 5G and industrial Internet of Things (IIoT) transformations.

“Having a Juniper network gives us flexibility and performance that helps Nipa compete with the global cloud providers,” says Dr. Abhisak Chulya, founder and CEO, Nipa Cloud.

“We can extend private cloud to the edge. We’re well positioned for the coming 5G and industrial IoT transformation.”

Using Juniper as its network foundation, Nipa is confident in its ability to offer advanced cloud solutions with high availability and performance in its service zones.

Edge data center providers

Some of the leading providers of edge data center services and solutions in the market include:

• AWS
• Cisco
• Microsoft
• Nokia
• Hewlett Packard Enterprise (HPE)
• VMware
• 365 Data Centers
• Dell Technologies
• IBM
• Litmus Automation