Today, edge data centres, which are small, purpose-built enclosures with higher capacity, lower latency and reduced network costs, are gaining traction. They also have high redundancy due to the large number of small facilities and have significantly faster internet speeds.
These data centres are critical for services that require near-100 per cent uptime, such as medical, electrical facilities, defence and banking. Even if one facility experiences downtime or slow internet speeds, having multiple locations allows traffic routing to reduce latency. A major benefit of an edge data centre is the fast delivery of services with minimal latency and increased bandwidth. Moreover, these data centres are portable, providing flexibility of moving the data as well as infrastructure.
Growth drivers
There are many key trends driving the growth of edge data centres. These include digitisation of businesses, need for increased data storage capacity, video streaming, electric vehicle and automation, internet of things (IoT), 5G, environmental, social and governance drivers, artificial intelligence/machine learning and augmented reality/virtual reality, and software-defined networking and network functions virtualisation technology.
The global edge data centre market is witnessing rapid growth due to:
- Increasing demand for online services
- Growing demand for edge computing in autonomous vehicles
- Flourishing telecommunication sector in the Asia-Pacific region
- Growing penetration of colocation data centres in South America
- Rising consumer demand for high-bandwidth services in the Middle East and Asia
- Security issues related to green storage technologies.
According to Verified Market Research, the global edge data centre market is expected to grow from $6.26 billion in 2020 to $36.32 billion in 2028, at a compound annual growth rate of 24.58 per cent.
5G and edge data centres
The roll-out of 5G networks is expected to provide a much-needed fillip to edge data centres. A decentralised cell network that includes edge data centres can help provide low latency for 5G use cases that involve high device density.
Further, edge data centres located near cell towers can improve proximity to end users by connecting mobile phones and wireless sensors. Edge data centres can also be used for processing data generated by IoT devices. An edge data centre would be used if data generated by devices needs more processing but is also too time-sensitive to be sent to a centralised server. In the healthcare domain, some medical equipment, such as that used for robotic surgeries, requires extremely low latency and consistent network connectivity, which edge data centres can provide.
Edge data centres can collect, process and share data between vehicles and other networks, which requires low latency. A network of edge data centres can be used to collect data for auto manufacturers and emergency response services. Moreover, these data centres can be used for predictive maintenance as well as predictive quality management of machines. They can also improve the efficiency of robotics used for inventory management.
Edge in the Indian market
Edge data centres are the best-fit solution for India’s rapidly growing digital network and computing infrastructure requirements. Cloud-based edge computing can support 5G+ service and data storage requirements. Further, the concentrated power requirements of hyperscale data centres have been met with pushback from the states. Therefore, the future of technology is highly dependent on edge for its speed and efficient data transfer. By filtering data, low-cost edge centres can help close the potential 64 zettabyte gap between global data centre traffic and use able data created.
Driving sustainability
As of January 2023, the global network traffic reached 3.9 petabytes per second. Further, the global power consumption of data centres has surpassed 2 per cent and is projected to reach 3 per cent in the next two years. In this scenario, the concentrated load requirements for electricity and water are driving hyperscale data centres away from some countries like Singapore and Ireland.
In contrast, edge data centres do not need concentrated loads, making them more suitable as they can integrate with the existing residential/industrial grid as well as renewable energy sources. Further, edge data centres can be built at a fraction of the cost of building hyperscale data centres. The resiliencies of edge data centres can be reconfigured unlike hyperscale data centres. The overall build cycle time for edge data centres is also much shorter while the operating costs are lower compared to hyperscale data centres. Therefore, edge data centres are more sustainable compared to hyperscale data centres.
Based on a presentation by Rao Srinivasa, Managing Director, Data Centres, Project Management, Colliers India
