The Future of Edge Computing: Market Poised to Grow 400% by 2025

In 2019, the global edge computing market was $1.7 billion. By 2025, it’s predicted that this will grow to $8.3 billion, with a CAGR of 29.4%. What is driving this extraordinary growth? And how can organizations ensure that they are choosing the right solutions to power their current, and future, edge computing needs? In this Article we explore those questions and provide perspective on the future of edge computing.

What is Driving the Need for Edge Computing?

The four primary factors driving demand for edge computing are:

• Data Explosion: More devices are generating higher amounts of data that need to be shared across bandwidth-constrained networks.
• Application Resiliency: Data needs to be retained and acted on at all times and from remote locations.
• Latency: Latency requirements are outpacing physics of cloud systems.
• Regulation: Laws require data (especially healthcare and financial data) to stay local, on premises, and encrypted.

Growth of IoT Requires Better Edge Computing Solutions

IoT, or the Internet of Things, is the broad network of physical devices (like phones, cars, sensors, etc.) that connect and share data with other devices and systems over the internet. As these devices evolve and develop the ability to generate and share more data, the networks handling this data need to improve as well. Because these devices often exist outside of traditional data centers, the applications and infrastructure powering data storage and sharing for them is called edge computing.

For example, self-driving cars require a substantial amount of data to safely shuttle folks to their destination. Next-gen cars need to generate and store large amounts of data to perform these complex tasks. But cars don’t have all the information required to do this—they also need to be able to communicate with other cars around them, receive data about traffic accidents and road work, and install software updates and fixes as instantaneously as possible. Forcing self-driving cars to stop by a datacenter for these tasks or forcing them to rely on strong internet connections at all times is untenable, so cars need to handle most of these tasks with onboard equipment.

Business Use-Cases for Edge Computing

In addition to consumers demanding more from IoT, businesses are also building more mission-critical applications far from traditional data centers. This includes retail stores that require POS, security, and HR management systems; grocery stores providing real-time product guidance for shoppers or leveraging robots to stock shelves; banks and financial institutions handling sensitive financial and transactional data from ATMs; and hospital staff leveraging wearables to track patient health and identify optimal treatment paths.

This migration of applications to the edge substantially increases costs. It’s not practical or cost-effective for Starbucks to have an IT person at every location or to send a helicopter with a new server to a cargo ship in the middle of the ocean. In some cases, leveraging the cloud for some tasks is simply not even an option, so the edge must autonomously detect problems and keep applications up and running.

Hybrid Cloud Deployments are Increasing

10 years ago, many analysts predicted that all compute and storage would eventually reside in the cloud. But as the cloud matured, many organizations developed a hybrid cloud approach to their infrastructure, leveraging the cloud for data that has less physical, regulatory, or latency constraints, while deploying edge infrastructure for data that does.

Analysts are now predicting this trend to continue, with the cloud, and edge computing, both growing significantly side-by-side. The hybrid cloud market is expected to grow at a CAGR of 18.73% through 2026.