Edge computing spending set to skyrocket as AI takes hold

15 March 2024, 15:38 published

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New figures from IDC have predicted a potentially colossal growth in edge computing spend over the coming years in light of increasing AI adoption.

Edge computing is quickly emerging as an important element in an evolving technological landscape, and the integration of AI applications into edge infrastructure is said to be the primary driver behind the projected growth.

IDC’s projections suggest that edge computing spending could reach $350 billion by 2027, surpassing earlier estimates.

Edge computing is set for a spending boom

Dave McCarthy, research vice president, Cloud and Edge Services at IDC, highlighted the pivotal role of edge computing in AI deployment: “To meet scalability and performance requirements, organizations will need to adopt the distributed approach to architecture that edge computing provides.”

The forecasted growth is based on 500 enterprise use cases across 19 enterprise industries and six domains.

According to current trends, multi-access edge computing (MEC), content delivery networks, and virtual network functions are expected to account for around one-fifth (22%) of all edge spending this year.

Marcus Torchia, research vice president, Data & Analytics at IDC, added: “Enterprise investments have continued to shift the past 24 months toward infrastructure expansion and greenfield deployments. Companies are acting on plans to build more robust local computing infrastructure capabilities.”

IDC anticipates substantial five-year compound annual growth rates (CAGRs) in the low-to-mid teens for the 19 industries surveyed, and a 19.1% CAGR for the service provider segment.

Looking ahead, IDC forecasts a focus on emerging edge use cases, including augmented reality, artificial intelligence, and autonomous operations.

The market intelligence company also notes the concentration of investment across North America, Western Europe, and China, whereby North America alone is expected to account for around two-fifths (40%) of all spend, although growth is also expected across Africa and the Middle East.