Analysis by global real estate consulting firm JLL predicts edge IT infrastructure and data centers will become a $317 billion market globally by 2026, representing a 107% growth from the 2020 market valued at $153 billion.
JLL defines an edge data center as a facility that brings computing power closer to where the data is generated or consumed.
Globally, the growth of edge computing will be influenced by not only the emergence of several technology-based megatrends but also the need for faster data transfer and high computation, as well as factors such as policies and regulations.
From an infrastructural standpoint, organizations rely on edge data centers to process and analyze data in real-time at the edge of the network, facilitating faster decision-making and more efficient operations.
The rise of edge IT infrastructure focused on data centers will mirror the growth of IoT devices, which JLL analysis projects will expand at a compound annual growth rate (CAGR) of 9.8% over the next five years. JLL’s analysis of a 2023 survey of data center professionals cited the requirement for low latency and high bandwidth (41%) was the most important driver for edge data center deployments, followed closely by data security and privacy (38.3%).
“Consumers and corporations will continue to adapt to transformational technologies within daily life and without the distribution of data processing and storage across various locations, cutting edge efficiencies and solutions like IoT and generative AI will not transition to mainstream acceptance,” said Jonathan Kinsey, EMEA lead and global chair, data center solutions, JLL. “Edge data centers will be essential to ensure both seamless business operations in the future economy while also improving security measures and protecting against potential disruptions. By lowering latency by bringing the computing infrastructure closer to the data source and user, edge IT infrastructure will become an essential component in the international economy.”
JLL analysis concludes that enterprises typically use a combination of different data center types, including on-premises, colocation, cloud, and edge, when deploying their IT infrastructure, depending on user needs.
However, the continual growth in data and connected devices has driven the need for increased storage, computing and network capabilities closer to the end points of use and created a need for edge computing and associated data centers.
The size of the edge computing market can be measured in different ways. JLL’s estimate of a $317 billion total addressable market comprises the complete IT infrastructure, colocation revenue, colocation supply and cloud services revenue, all specifically at the edge.
From the IT infrastructure lens, the edge computing market consists of all the IT hardware, including storage, computing and networking equipment that enable the delivery of digital services at the furthest points of a network.
For more information about this report, visit https://www.us.jll.com.