Global real estate consulting firm JLL predicts that the global edge information technology (IT infrastructure) and data center market will grow to a $317 billion market worldwide by 2026, representing a growth of 107 percent from the market value of $153 billion in 2020.
A predicted rise in data-dependent technologies, including the Internet of Things (IoT) and generative artificial intelligence (AI), will require extensive support of IT infrastructure from edge data centers around the world, JLL said in its analysis published last Thursday.
JLL defines an edge data center as a facility that brings computing power closer to where data is generated or consumed.
Globally, the growth of edge computing is influenced not only by the emergence of several technology-based megatrends, but also by the need for faster data transfer and high computing power, as well as factors such as policies and regulations.
From an infrastructure perspective, companies rely on edge data centers to process and analyze data in real time at the edge of the network, enabling faster decisions and more efficient operations.
According to the company, the rise of edge IT infrastructure with a focus on data centers will reflect the growth of IoT devices, which will have a compound annual growth rate (CAGR) of 9.8 percent over the next five years, according to a JLL analysis.
According to JLL’s analysis of a 2023 survey of data center professionals, the requirement for low latency and high bandwidth (41 percent) is the most important driver for edge data center deployment, closely followed by data security and privacy (38.3 percent).
According to the company, consumers and enterprises demanding improved products and services such as low latency, high computing power, generative AI and omnipresence are likely to ensure that the cloud environment and the future of edge data centers remain healthy with the observed opportunities.
Furthermore, it was noted that the Asia Pacific (APAC) and Middle East/North Africa (MENA) regions, which have significant growth potential due to increasing internet and mobile penetration among rural populations, will further strengthen the opportunities in the edge data center market.
In the USA, 21 percent of data center developments take place in peripheral regions.
“Consumers and businesses will continue to adapt to transformative technologies in their daily lives, and without the distribution of data processing and storage across multiple locations, cutting-edge efficiencies and solutions such as IoT and generative AI will not gain mainstream adoption,” said Jonathan Kinsey, Lead and Global Chair, Data Centre Solutions, JLL for Europe, Middle East and Africa (EMEA).
“Edge data centers will be essential to ensure smooth business operations in the future economy while enhancing security measures and protecting against potential disruptions.
“By reducing latency and bringing computing infrastructure closer to the data source and the user, edge IT infrastructure will become an essential part of the international economy,” he added.
The JLL analysis also concluded that companies are lagging behind in providing
their IT infrastructure, depending on the needs of the users.
However, the continued growth of data and connected devices has driven the need for more storage, computing and networking capacity closer to the endpoints of use, creating a need for edge computing and the associated data centers, it said.
The company also said that the size of the edge computing market can be measured in several ways.
He estimates the total market to be $317 billion and includes complete IT infrastructure, colocation revenue, colocation delivery and cloud service revenue, all specifically in the edge space.
From an IT infrastructure perspective, the company noted that the edge computing market consists of all the IT hardware, including storage, compute and networking equipment, that enables the delivery of digital services at the most remote points of a network.
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