An edge data centre is a small data centre, with no more than 2 MW of power capacity (and often less), which enterprises can set up in locations “at the edge”: close to the people, machines and processes that generate and use data. These data centres can handle small activities such as Unified Payments Interface and ATM transactions in Tier II and III cities, reducing the need for data processing in Mumbai or Chennai and supporting cities such as Guwahati or Indore.

Owing to their growing adoption, the market value of such data centres is increasing. In 2023, the market for edge data centres was valued at $11.01 billion. Going forward, the market is expected to grow to $60.01 billion by 2033, witnessing a compound annual growth rate (CAGR) of 18.48 per cent. The Asia-Pacific region is expected to witness the fastest CAGR during the period.

Key features of edge data centres

The four key features of edge data centres are they are:

  • Local: They are placed near the areas they service and are managed remotely.
  • Small: They have the same components as a traditional data centre, packed into a much smaller footprint.
  • Part of a larger deployment: They are one of many data centres in a complex network, including a central enterprise data centre.
  • Mission-critical: They house mission-critical data, applications and services for edge-based processing and storage.

Demand drivers

The key drivers propelling the demand for edge data centres include the rising adoption of internet of things (IoT), proliferation of 5G, traction in smart cities and move towards data localisation. The IoT market is expected to exhibit an annual growth rate of 15.83 per cent between 2024 and 2028. Further, the rapid speeds of 5G networks empower augmented reality/virtual reality applications, connected cars and more, with neighbouring edge data centres ensuring real-time experiences. Moreover, smart city initiatives require real-time data analysis at the edge for efficient management. Additionally, edge data centres facilitate compliance with data residency regulations by processing information locally, reflecting the growing emphasis on data sovereignty.

Other exponential growth drivers include the digital transformation of enterprises, with Indian enterprises spending Rs 3.7 billion on public cloud. This shift is also evident within the government itself, as it is increasingly relying on digital solutions for various transactions. The government is implementing digital initiatives in various sectors, including registrations, car services, passport services, revenue, tax and security services, transitioning from pen-and-paper to digital platforms. Further, the recent artificial intelligence (AI) boom is fuelling the demand for edge data centres. The AI market size is expected to reach $5.47 billion and that of the generative AI market is expected to reach $1.18 billion in 2024.

Enhancing digital experiences through edge computing

OTT content providers

Over-the-top (OTT) content providers can set up small edge data centres in individual cities to reduce the time required for data transmission. These data centres can help OTT players improve streaming performance and reduce buffering time.

Social media platforms

The setting up of edge data centres enables social media platforms to ensure efficient content processing and enhance user engagement.

Content creators and distributors

These data centres enable content creators and distributors ensure faster upload speeds and lower latency for live events.

Gaming

Edge data centres, if placed in individual cities, can also enhance gaming experiences by providing faster and more immersive experiences with high-resolution graphics. Multiplayer gaming can also be enhanced by placing the edge data centre closer to the location of the players.

Market landscape for edge data centres

Edge data centres are relatively new in India. The current deployments are primarily at the trial stage, while the services to be offered, such as colocation and network infrastructure, are at the research and development stage. The key players in the market include private and government-owned telecom players, data centre providers and hyperscale cloud companies. However, over the next six months to one year, as the demand for 5G and OTT services increases, edge data centre deployments are expected to rise.

Yotta’s edge data centre growth plans

Yotta Data Services plans to set up 100 edge data centres in Tier II and Tier III cities in a phased manner. These will complement its hyperscale data centres. The company is currently earmarking land, conducting due diligence and securing necessary infrastructure such as power and fibre connectivity. It is tying up with telecom and infrastructure players, and plans to utilise containerised solutions for edge sites. These data centres will be able to accommodate 50 to 500 racks, with scalability based on demand requirements, product mix and market potential. They will have a lead time of six months for deployment.

Based on a presentation by Rohan Sheth, Business Unit Head, Colocation and Data Centre Build, Yotta Data Services