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Next decade will see $700B in data center, edge infrastructure spending according to State of the Edge forecast

Next decade will see $700B in data center, edge infrastructure spending according to State of the Edge forecast

The market for edge infrastructure will be worth more than $700 billion in capital expenditures over the next decade, as the “Third Act of the Internet” takes off, according to the State of the Edge 2020 report. A comprehensive forecast model by Tolaga Research in the report predicts $146 billion in annual spending on edge IT and data center technology by 2028, rising by a 35 percent CAGR.

“The 2020 edition of State of the Edge seeks to interpret the profound rearchitecting of the Internet being driven by edge computing and adds over a year of updates from the edge community,” said Matt Trifiro, State of the Edge co-chair in a statement. The vendor-neutral research report was announced at the IFX Conference in Las Vegas by the member-supported research organization State of the Edge.

The evolution of the modern internet is described in the report by comparison to a three-act play, with the first act consisting of the origin of the internet and its growth through the mid-90s. In the second act, latency and bandwidth optimization became a focus, with content delivery networks (CDNs) and regionalization taking the stage. The third act, the current phase of the internet, involves the enhancement of the internet with edge technology to meet the demands of the newest use cases, and those requiring real-time and low-latency interactions in particular, as well as the petabytes of data generated by billions of connected devices. The restructuring this involves, the report states, will depend on thousands of companies investing billions in new infrastructure.

The development of next-generation content delivery networks (CDNs) and cloud technologies are among the hallmarks of the current phase, as latency requirements are being pushed down into the tens of milliseconds.

APAC expected to lead growth

The report provides forecasts and provides edge use cases for 11 markets and industries, including an “other” category forecast to make up between 15 and 20 percent of the total.

Edge computing is a global phenomenon, led by the Asia-Pacific region, which already has an edge footprint estimated at 187 MW, according to the report. (The power footprint is described as the aggregate IT power rating of the edge infrastructure equipment and the edge data center facilities that are deployed.”

The impact of 5G on the edge began to be felt in 2019 but is expected to increase significantly in 2020 and beyond, the report’s authors noted. The APAC region, for example, is buoyed by mobile service deployments in markets such as China, Japan, Korea, and Australia. India is also adding to edge footprint growth, with the market expected to increase to over 25 gigawatts by 2028.

A rapid increase is expected in several regions, however, and by 2028, power deployed globally to edge IT and data centers is forecast reach 102 thousand MW. Asia-Pacific is also expected to have the highest investment in edge infrastructure, with 36.7 percent of the global whole, ahead of Europe’s 31 percent.

Linux Foundation general manager for Networking, Edge, and IoT Arpit Joshipura emphasizes in the introduction the potential innovation at the edge has to improve people’s lives. He also notes that “edge computing has already begun its journey as an inherently open ecosystem,” in explaining the role of the Foundation.

The ecosystem is still very solution-specific, with equipment and architecture purpose-built for 5G and network function virtualization, new CDN and cloud technologies, streaming games and other use cases.

According to Trifiro, community efforts such as the Open Glossary of Edge Computing and the Edge Computing Landscape are gaining momentum in providing common definitions for those infrastructure elements and their related concepts and technologies. Further information on those efforts is included in the report, along with the full glossary in a resource appendix to the 69-page report.

Chris Burt contributed to this article.

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