Worldwide spending on edge computing is projected to hit $228 billion in 2024, posting a 14% increase from 2023, according to the International Data Corp. (IDC). This growth is driven by rising demand for real-time analytics, automation, and the expanding role of artificial intelligence (AI).
IDC forecasts that by 2028, edge computing spending will reach $378 billion, growing at a double-digit compound annual growth rate (CAGR).
Edge computing refers to the deployment of technologies that operate outside centralized data centers, facilitating faster decision-making by reducing latency and enhancing privacy. The ecosystem includes hardware, software, and professional services that enable the processing of data closer to where it is generated.
“As AI focuses more on inference rather than training, edge computing will become crucial for reducing latency and enabling new business models,” said Dave McCarthy, research vice president, Cloud and Edge Services at IDC. “By distributing data and applications to edge locations, companies can optimize operations and cut network congestion.”
Multi-access edge computing
Manufacturing leads in edge spending, using AI for real-time equipment monitoring and predictive maintenance. In utilities, edge solutions help manage critical infrastructure like electricity and water, particularly with the rise of renewable energy sources. The IDC said that the banking sector is the fastest-growing, utilizing edge computing for data processing, fraud detection, and AI-enhanced customer services.
The service provider sector will experience the highest CAGR over the forecast period, driven by investments in multi-access edge computing (MEC), content delivery networks, and virtual network functions. MEC is essential for next-generation applications that rely on low-latency communications, such as those powered by 5G networks and AI.
“Service providers will play a pivotal role in helping enterprises adopt edge computing and AI seamlessly,” said Alexandra Rotaru, manager of Data & Analytics at IDC Europe.
She noted that key edge technologies, such as AI-powered devices and 5G connectivity, are rapidly advancing.
Hardware remains the largest area of investment initially, particularly AI processors. However, by 2028, provisioned services are expected to surpass hardware, with infrastructure as a service (IaaS) showing the fastest growth in supporting edge computing and AI applications.