Global spending on edge computing is estimated to reach $228-billion in 2024, marking a 14% increase from 2023, according to IDC’s latest Worldwide Edge Spending Guide.
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 solid double-digit CAGR.
According to IDC, the edge encompasses the technology-related actions outside of centralised data centres, serving as an intermediary between connected endpoints and the core 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.
“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,” says Dave McCarthy, research vice-president, Cloud and Edge Services at IDC. “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.”
The IDC Edge Spending Guide segments edge spending for more than 500 named enterprise use cases related to six domains – Artificial Intelligence (AI), Internet of Things (IoT), Augmented Reality (AR), Virtual Reality (VR), Drones, and Robotics – unlocking significant opportunities across various industries.
In manufacturing, accounting for the largest portion of spending, edge enables realtime monitoring of equipment and processes reducing downtime and improving operational efficiency. Predictive maintenance use case, powered by AI at the edge, helps companies avoid costly breakdowns by identifying issues before they escalate.
In utilities, edge continues to enable smarter, more efficient, and realtime management of critical infrastructure such as electricity, water, and gas. With the increasing deployment of renewable energy sources, smart grids, and IoT-enabled devices edge is a critical solution for utilities companies to help with processing vast amounts of data quickly and securely.
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.
IDC expects all 19 enterprise industries profiled in the spending guide will see five-year double-digit compound annual growth rates (CAGRs) over the forecast period.
However, 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. Multi-access edge computing (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 artificial intelligence.
“Enterprises are now accelerating their investments in edge and AI to drive realtime analytics, automation, and enhanced customer experiences – particularly in manufacturing, utilities, healthcare, and retail,” says Alexandra Rotaru, manager, Data & Analytics, Europe. “Key technologies like AI-powered devices, edge servers with 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,” she adds.
Regarding technology spending, 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.