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IDC predicts edge computing investments to reach $317 billion by 2026

IDC predicts edge computing investments to reach $317 billion by 2026

The IDC spending guide forecasts worldwide spending on edge computing will reach $317 billion by 2026. Meanwhile, the same industry analysts estimate that expenditure on edge computing will reach $208 billion by 2023, an increase of 13.1% from the 2022 levels. IDC says that service provider and enterprise spending on software, hardware and services for edge solutions drive this growth.

“Edge computing has gone mainstream,” says Dave McCarthy, research vice president, Cloud and Edge Infrastructure Services at IDC. “The ability to distribute applications and data to field locations is a key element of most digital transformation initiatives.”

According to the IDC, edge computing is a distributed, software-defined technology that allows computing resources to move closer to the physical location where data is generated. This technology reduces time to value and enables business processes, decisions and intelligence outside the core IT environment.

IDC has identified over 400 use cases for edge computing in various industries. The top three 2023 investment areas are content delivery networks, virtual network functions and multi-access edge computing (MEC). Service providers will invest $44 billion in these three use cases in 2023 says the IDC.

“Metrics related to enhanced innovation, performance, customer experience, or cybersecurity capabilities will enable companies across the world to expand their budget and build new edge infrastructures,” says Alexandra Rotaru, a senior research analyst of the Data & Analytics group at IDC.

For enterprises, including the public sector, the top-edge investment areas in 2023 include production asset management, autonomic operations, omnichannel operations, freight monitoring, and augmented customer service agents. The edge use cases predicted to have the fastest spending growth between 2021-2026 include 360-degree educational video viewing, emergency response, film/feature production and lab and field (K-12).

According to the IDC report, the most spending in edge computing will be on professional and provisioned services in 2023. Connectivity services will make up almost 50 percent of this amount, followed by SaaS and support & deployment services. IDC says investments in edge gateways, servers and network equipment will drive hardware spending. Software remains the smallest tech category over the IDC forecast period.

Meanwhile, the US will be the leader in edge spending during the forecast period, followed by Western Europe and China. Over the same five-year forecast, Latin America and China will experience the fastest spending growth, with CAGRs of 18.1% and 18.0%, respectively.

“Despite different headwinds impacting buyers’ spending behavior, especially in Europe, edge computing remains one of the most resilient and attractive areas of investments, growing globally at a double-digit rate over the next five years,” added Rotaru.

That said, in IDC Research’s EdgeView 2022 survey, analysts predicted a continued increase in investment for edge solutions over the next two years. According to the survey, 75 percent of enterprises planned to increase their edge investments by an average of 37%.

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