Edge Computing Market: Introduction

Internet of Things (IoT) has seen unstoppable growth in the past few years. With IoT’s scope widening in almost every commercial sector, the number of connected devices in increasing faster than ever before, with the total count expected to reach around 20 billion by 2020 end.

The flourishing growth of IoT is creating data management and processing challenges. The volume of data created by IoT has been colossal over the last two years, and the figure is expected to grow at a rate of 40% during the forecast period, primarily supported by the number of devices. The increasing number of devices and massive data volumes are creating latency issues across different locations and networks, reducing overall network efficiency and making IoT unsustainable in the long term.

The current heterogeneous network architecture also fails in managing the increasing number of end points and high volume of data, which necessitates an efficient data management technology. The concept of edge computing and edge connectivity emerged as a solution to these challenges. It primarily deals with data processing near the data source so that response time and connectivity can be controlled, thereby increasing the overall system’s efficiency.

Edge Computing Market: Drivers

The Ubiquity of IoT Technology

IoT has successfully managed to take roots in every commercial application, creating significant demand for edge computing technology. The figure below portrays overall IoT spending sector-wise.

IoT technology is expected to observe colossal growth during the forecast period, and this growth goes hand-in-hand with the need for reduced network latency and increased efficiency, which is propelling the adoption of edge computing methodology for higher service quality. Additionally, the rapid increase in processing power, coupled with the falling prices of devices, is also spurring the transition to edge computing. Around 25–30% of global telecom operators are implementing edge computing models in their data process architecture (Source: Straits Analysis)

Role of Effective Wire Connectivity & the Advent of 5G

The rise of 5G technology is likely to influence the current wireless communication models that form a major part of IoT infrastructure. As IoT cannot operate without effective wireless connectivity, 5G will be a gamechanger for the whole infrastructure, strengthening system performance in terms of scalability, latency, security, and reliability.

Declining Cost of IoT-Based Components

The decline in the cost of IoT-based components is also fueling the overall adoption of IoT models. For instance, the price of sensors, actuators, and transducer systems is declining, providing an entry point for various vertical markets, such as enterprises and consumer devices. The decline in the cost per CPU memory and storage has made it possible for the construction of large data processing systems, allowing further integration in the edge computing model.

Edge Computing Market: Opportunities

Artificial Intelligence

AI has taken roots in various commercial sectors alongside other technological advancements, with businesses seeking a competitive edge. As per a recent survey by MIT in 2017, around 85% of respondents firmly believed that AI has a strong potential to take the business structure to a newer level. This trend has bolstered the integration of AI with edge computing.

Emergence of Microservices

The emergence of microservices has propelled the need for better flexibility and agility to achieve efficient network performance. Microservices allow the merger of specific business rules and policies into a single entity that proves to be suitable for various businesses to gain the most flexibility. Microservices possess the characteristics of integration with other platforms, which creates a wider scope for revenue generation. The combination of microservices and IoT technology increasingly scales market opportunities and creates a fertile platform for the growth of edge computing, owing to advantages such as resource optimization and higher computation.

Southeast Asia — A Key Edge Computing Market With Significant Growth Prospects

Asia-Pacific has emerged as a significant contributor to the rising adoption of IoT with respect to various use cases. China, Japan, and South Korea are prominent shareholders in the region, and Southeast Asia represents significant growth potential for the future.

Mobile IoT technologies are gaining traction in Asia-Pacific, with adoption in various use cases generating colossal volumes of data. The primary issue with the current system is its inability to process data with maximum efficiency at a centralized location, which results in degradation of system performance. Edge computing solutions help overcome this challenge, which is a key factor bolstering market growth in the region.

A few examples of the adoption of IoT in various use cases across Southeast Asia are listed below.

Thailand

IoT plays a key role in cold chain solutions. It helps monitor the temperature of perishable goods during transportation. AIS, a mobile operator in Thailand, employs an NB-IoT based platform for monitoring cooling systems’ temperature during transportation. NB-IoT uses 900 MHz band and LTE-M technology with 1800 MHz band across 77 provinces in the country.

LTEM technology is also being applied in connected cars, asset tracking, voice data connections, and other applications for processing large data volumes. Large data volumes introduce higher latency and packet losses, which ultimately widens the scope for edge computing solutions.

Singapore

Singapore adopts IoT services in maintaining effective waste management systems for optimizing cleaning functions. OTTO Waste Systems Singapore Pte Ltd is heading the project with sensors integrated into the system so that the cleaning crew can be notified when they need to empty these litter bins.

The technology also finds use in smart power metering, smart street lighting, and smart fleet management. With this exponential growth of IoT in various uses cases, the data generated also increases, creating a need for effective computing models. Edge computing represents an ideal solution here, creating a lucrative opportunity for market growth during the forecast period.

Edge Computing Market: Key Players

Some of the major companies operating in the global edge computing market are Cisco, Dell Technologies, FogHorn Systems, HPE, Huawei, IBM, MachineShop, Nokia, and SixSq.

Various tier one communication service providers such as AT&T, China Mobile, and Deutsche Telecom have shifted their processing architecture to edge computing with the integration of several new use cases. Key cloud players, such as Amazon, Facebook, and Google, are pushing towards the adoption of edge architecture, creating a revolution in the digital world. The acquisition of Whole Foods by Amazon can also be interpreted as its approach towards the adoption of edge server technology.

Use Cases

Autonomous Driving : Tesla has adopted edge computing along with a machine learning algorithm in its operational model. The integration aims to improve the overall behavior of its computing devices.

Process Monitoring & Operations Analytics : Monitoring of business process and operations through the adoption of sensors and automation have led to an increase in operational efficiency. For instance, monitoring of refrigeration checks for achieving food security and safety, where specific conditions are noted and taken care of if the values fall below the threshold.

Asset Tracking & Monitoring : This process has been gaining significant demand since the emergence of industry 4.0 initiatives. Integrated with the total amount of data available for use with ML algorithms to learn from patterns and behaviors, the scope for real-time monitoring enables prediction of failures in the future, thereby creating an on-demand scenario for maintenance and repairing, with minor loss in the whole supply chain.

Safety and Compliance : Increased penetration of smartphones, wearables, and associated devices has generated a colossal amount of data, which in turn has created a demand for edge computing. Some of the popular examples for which these systems are adopted include facial recognition, human behavior analysis, customer experience, and others. These technologies have proven to be a boon for citizen safety and privacy, which is widening the scope for the edge computing market.

Edge Computing Market Segmentation

By Component

Hardware

Software

Services

By Application

IIoT

AR & VR

Remote Monitoring

Content Delivery

Others

By End-User

Manufacturing

IT and Telecom

Energy and Utilities

Retail and Consumer Goods

Healthcare and Lifescience

Others

By Region