According to a report by International Data Corporation (IDC), global spending on edge computing is estimated to reach $228 billion in 2024, marking a 14 per cent increase from 2023. This includes combined enterprise and service provider spending on hardware, software, professional services, and provisioned services for edge solutions. The forecast anticipates sustained strong growth through 2028, with spending expected to be near $378 billion growing at a double digit compounded annual growth rate (CAGR).
As per the report, edge encompasses the technology-related actions outside of centralised data centres, serving as an intermediary between connected endpoints and the core information technology (IT) environment.
Edge is a crucial technology infrastructure that extends and innovates on the capabilities found in core data centres, whether enterprise or service-provider-oriented. The edge ecosystem comprises various technologies and services, including computing infrastructure (such as servers, storage, and networking equipment), diverse software (such as system infrastructure, security, and application development and deployment), as well as professional implementation and management services and provisioned services delivering cloud-based technologies.
In manufacturing, accounting for the largest portion of spending, edge enables real-time monitoring of equipment and processes, reducing downtime and improving operational efficiency. Predictive maintenance use case, powered by artificial intelligence (AI) at the edge, helps companies avoid costly breakdowns by identifying issues before they escalate.
Meanwhile, in utilities, edge continues to enable smarter, more efficient, and real-time management of critical infrastructure such as electricity, water, and gas. With the increasing deployment of renewable energy sources, smart grids, and internet of things (IoT)-enabled devices, edge is a critical solution for utilities companies to help with processing vast amounts of data quickly and securely.
The report highlighted that banking is the fastest-growing industry in terms of spending. Driven by the rise of AI-powered services, edge transforms how banks handle data processing, fraud detection, and customer interactions. Examples of use cases include AI-optimised operations, augmented fraud analysis and investigation, and others.
The report mentioned that the service provider segment will see the largest CAGR over the forecast period. In the service provider domain, investments in edge service delivery are built on infrastructure spending for multi-access edge computing (MEC), content delivery networks, and virtual network functions. MEC represents the fastest growing area, becoming increasingly critical for supporting the ultra-reliable, low-latency communications required by next-generation applications steered by the widespread of 5G networks, IoT, and AI.
Regarding technology spending, it stated that the most significant investment will stay within hardware at the beginning of the forecast, driven by AI processors and accelerators in edge infrastructure systems that are projected to generate increased demand in the coming years. However, provisioned services are estimated to surpass the hardware share by 2028. Within provisioned services, infrastructure as a service will represent the fastest growth category as a great tool that facilitates rapid development, deployment, and iteration of AI models and edge computing applications. Although small in terms of overall spending, on-premises software will remain a critical component of edge infrastructure, driven by accelerated demand for analytics and AI software.
Moreover, from a geographic perspective, North America will remain the edge spending leader throughout the forecast period, followed by Western Europe, with Germany and the United Kingdom leading the spending. China, Latin America and Asia/Pacfic (excluding Japan and China) will experience the fastest spending growth over the five-year forecast.
Commenting on the report, Dave McCarthy, research vice president, cloud and edge services, IDC, said, “As the focus of AI shifts from training to inference, edge computing will be required to address the need for reduced latency and enhanced privacy. This trend not only optimises operation efficiencies but also fosters new business models that were previously not possible with centralised infrastructure. Distributing applications and data to edge locations enables faster decision-making with reduced network congestion.”
Meanwhile, Alexandra Rotaru, manager, data and analytics, Europe, IDC, said, “Enterprises are now accelerating their investments in edge and AI to drive real-time analytics, automation, and enhanced customer experiences, particularly in manufacturing, utilities, healthcare, and retail. Key technologies like AI-powered devices, edge servers with graphic processing units (GPUs), and 5G connectivity are gaining traction, enabling organisations to process data closer to the source and achieve higher performance. In this journey, the service providers will play a critical role by offering tailored solutions, from infrastructure deployment to AI integration and edge management, helping enterprises seamlessly adopt edge and AI and unlock its full potential for advanced innovation.”
