Market Size of 5G Edge Computing (2024 – 2030)

The valuation of the 5G Edge Computing Market stood at USD 11.95 billion as of 2023, with a projected increase to USD 41.59 billion by 2030. The market is expected to grow at a Compound Annual Growth Rate (CAGR) of 19.5% throughout the forecast period.

Industry Overview:

In the realm of networking, 5G edge computing emerges as a strategy that reduces the volume of operations conducted in the cloud, instead transferring them to local devices such as end-user PCs, IoT devices, or edge servers. This shift minimizes the distance for data to travel, decreasing latency and enhancing operational efficiency. Consequently, many enterprises are embracing 5G edge computing due to its ability to conserve server resources, and reduce bandwidth usage, and associated costs.

The rapid proliferation of the Internet of Things (IoT) and connected devices is a primary driver of this growth. Market players are integrating IoT-enabled devices with 5G edge computing solutions to improve internet connectivity for seamless data transfers to and from the cloud. Furthermore, the adoption of Multi-Access 5G Edge Computing (MEC) by telecom companies has led to enhanced application performance and reduced network congestion. By processing data locally, thereby reducing the volume of data that needs central processing in the cloud, 5G edge computing also presents cost-saving opportunities for businesses. The advancement of faster networking technologies like 5G wireless enables 5G edge computing systems to handle real-time applications such as video processing, analytics, autonomous vehicles, artificial intelligence (AI), and robotics. The COVID-19 outbreak has further accelerated the adoption of 5G edge computing, playing a pivotal role in enterprises worldwide by enhancing the performance of streaming services, which have experienced increased user bases due to the pandemic.

Impact of COVID-19 on the 5G Edge Computing Market:

During the COVID-19 pandemic, the 5G edge computing industry is expected to witness growth. This is attributed to the rising utilization of "Edge AI," or edge computing in artificial intelligence, which aids in delivering precise and immediate insights for the identification and treatment of COVID-19 patients. The demand for 5G edge computing is predicted to soar during the pandemic due to its ability to boost network speeds, reduce bandwidth requirements, and address security concerns, all of which are critical in the current work environment.

Market Drivers:

The market's expansion is fueled by the increasing adoption of IoT across various sectors:

The exponential growth in data generated by IoT devices has led businesses to increasingly rely on centralized cloud computing and storage solutions. The market for IoT products and services is forecasted to grow at a double-digit CAGR of 14.9% between 2022 and 2030. Predictions indicate that by 2025, there will be 31 billion active IoT devices, with estimates from Accenture suggesting that IIoT could contribute USD 14.2 trillion to the global economy by 2030. Challenges such as latency and financial feasibility arise when migrating entire IT infrastructures to the cloud. Therefore, businesses employing IoT sensors, actuators, and other devices are swiftly exploring 5G edge computing alternatives, including edge nodes, devices, and hyper-localized data centers. By bringing data processing closer to the data source, 5G edge computing complements the existing cloud model, enabling businesses to make quicker decisions.

The primary driver of market expansion is the emergence of autonomous vehicles and connected vehicle technologies:

The infrastructure for autonomous and connected vehicles is becoming increasingly prevalent due to heightened customer expectations and technological advancements. Autonomous vehicles rely on data transmission regarding weather, lighting, and road conditions for navigation and control. There are numerous opportunities for 5G edge computing to facilitate the advancement of autonomous vehicles by bringing processing closer to the data source and enabling faster operations. While still in its early stages, many enterprises are beginning to reimagine the cloud through 5G edge computing to support autonomous and connected vehicle technologies. Utilizing 5G edge computing, autonomous vehicles can process gathered data more swiftly and accurately, allowing edge data centers to prioritize critical information while offloading less urgent data. When combined with artificial intelligence (AI) and machine learning (ML), 5G edge computing can accelerate the processing of vast amounts of data generated by autonomous vehicles, providing local processing capabilities. This cautious approach to driving can effectively circumvent traffic congestion and aid in preventing accidents. The benefits of edge computing are expected to prompt more investments from autonomous vehicle manufacturers in the technology, thereby supporting the growth of the 5G edge computing market in the coming years.

Market Restraints:

The high initial costs associated with establishing the infrastructure hinder market growth:

Enterprises are swiftly modernizing by adopting emerging technologies to automate and expedite their business processes. While 5G edge computing has the potential to reduce data transmission and storage costs through localized processing, investing in edge infrastructure adds to businesses' capital expenditures (CAPEX). Businesses aspiring to implement comprehensive 5G edge computing solutions would require substantial investments in edge nodes, other edge devices, and edge data centers. Additionally, securing all devices within the network would entail further costs. The expense of edge infrastructure poses a challenge to the growth of the 5G edge computing industry, although ongoing advancements and research are expected to mitigate this barrier.

Integration challenges with existing cloud architectures impede business expansion:

To fully leverage the capabilities of edge computing, 5G edge computing platforms and applications must integrate seamlessly with current cloud architectures. Given the limited storage and computational power of edge nodes, a well-designed infrastructure bridging the edge and the cloud is crucial. Establishing a reliable edge network capable of managing network traffic from numerous nodes becomes challenging as enterprises increasingly adopt multi-cloud infrastructures. Most IT managers face difficulty finding suitable solutions and cloud providers capable of handling high bandwidth demands and redundant data reporting.

5G EDGE COMPUTING MARKET – BY COMPONENT

• Hardware
• Software
• Services

In terms of components, the 5G Edge Computing Market is divided into Hardware, Software, and Services. Throughout the forecasted period, the hardware segment is expected to dominate the market share, primarily due to its increasing popularity within the field service domain. The proliferation of IoT and IIoT devices is resulting in a rapid escalation of data volumes. The deployment of 5G edge computing technology aims to alleviate the strain on cloud resources and data centers caused by this surge in data generation. The requisite equipment for 5G edge computing must possess qualities of durability, compactness, and ample power, connectivity, and storage capacity. Given their frequent deployment in challenging environmental conditions, these 5G edge computing devices must meet stringent standards. They incorporate performance accelerators to enable real-time data processing, facilitating swift decision-making. The 5G edge computing infrastructure encompasses local data centers, edge gateways, and localized hardware.

5G EDGE COMPUTING MARKET – BY ORGANIZATION SIZE

• Large Enterprises
• SMEs

Regarding organization size, the 5G Edge Computing Market is categorized into Large Enterprises and SMEs. The large enterprise sector is projected to be a significant contributor to the growth of the 5G edge computing market during the forecast period. Large corporations have shown a proclivity for early adoption of 5G edge computing, a trend expected to persist in the coming years. This inclination is attributed to their adaptability and ability to leverage cutting-edge technologies such as edge computing. Moreover, these enterprises often have operations spanning diverse geographical locations. These factors empower them to deliver solutions that afford employees real-time access to data. The uptake of 5G edge computing solutions among large enterprises is on the rise as a means to enhance overall operational efficiency. The 5G edge computing sector is witnessing notable technological advancements, including advancements in big data, social media, real-time solutions, personalized marketing, and the integration of analytics and machine learning (ML). These innovations are widely embraced and adopted by a majority of consumers.

5G EDGE COMPUTING MARKET – BY APPLICATION

• Smart Cities
• Industrial Internet of Things (IIoT)
• Remote Monitoring
• Content Delivery
• Augmented Reality (AR) and Virtual Reality (VR)
• Others

In terms of applications, the 5G Edge Computing Market is segmented into Smart Cities, Industrial Internet of Things (IIoT), Remote Monitoring, Content Delivery, Augmented Reality (AR) and Virtual Reality (VR), and Others. The smart cities application segment is expected to exert a substantial influence on the 5G edge computing market during the forecasted period. This is primarily due to its extensive deployment of IoT sensor networks, crucial for ensuring uninterrupted data streaming to efficiently manage resources and infrastructure. Smart city applications encompass functions such as traffic control, air quality management, sewage and waste management, and reliable communication. The continuous flow of data necessitates frequent communication with cloud data centers, leading to network congestion. Edge intelligence, complemented by machine learning capabilities, plays a pivotal role in advancing smart city initiatives. Besides offering apparent operational benefits such as computational offloading, local data processing and analysis, parallel computation, and reduced latency, 5G edge computing also aids customers in achieving lower power consumption and costs.

5G EDGE COMPUTING MARKET - BY VERTICAL

• Manufacturing
• Energy and Utilities
• Government and Defense
• Telecommunications
• Media and Entertainment
• Retail and Consumer Goods
• Transportation and Logistics
• Healthcare and Life Sciences
• Others

In terms of verticals, the 5G Edge Computing Market is segmented into Manufacturing, Energy and Utilities, Government and Defense, Telecommunications, Media and Entertainment, Retail and Consumer Goods, Transportation and Logistics, Healthcare and Life Sciences, and Others. The manufacturing sector is poised to have a significant impact on the growth of the 5G edge computing market throughout the forecast period, surpassing other verticals. Manufacturing entities are increasingly adopting industrial automation and efficiency measures through the proliferation of IoT sensors on factory floors. However, the establishment and maintenance of extensive data centers are imperative for storing, processing, and analyzing the copious data generated by IoT-enabled sensors in manufacturing. To address these challenges, organizations are swiftly integrating 5G edge computing into smart manufacturing frameworks. The localized processing capabilities offered by 5G edge computing enable remote monitoring and bolster cost-effective disaster recovery strategies. Furthermore, 5G edge computing facilitates data collection and analytics closer to sensing and action points, aiding businesses in mitigating unplanned downtime issues and enhancing production efficiency. The technology guarantees low latency and immediate analysis even in scenarios of intermittent or weak connectivity.

5G EDGE COMPUTING MARKET - BY REGION

• North America
• Europe
• The Asia Pacific
• Latin America
• The Middle East
• Africa

Regionally, the 5G Edge Computing Market is categorized into North America, Europe, Asia Pacific, Latin America, The Middle East, and Africa. The Asia Pacific region is anticipated to witness the fastest growth rate, exhibiting the highest CAGR throughout the forecast period. The dynamic and advanced adoption of new technologies within the APAC region is a key driver for this growth. Additionally, companies in the region are rapidly expanding their IT investments, further propelling the adoption of 5G edge computing solutions. The presence of numerous international telecommunications and edge network companies, such as Huawei, Telstra, Vodafone, Optus, China Telecom, and Vodafone, with headquarters in APAC, contributes significantly to the market expansion for 5G edge computing. However, the adoption rate of 5G edge computing in APAC remains lower compared to North America and Europe, attributed to a lack of awareness among many small and medium-sized enterprises in the region (according to a survey by Vertiv, a cloud computing technology provider). Nevertheless, the survey also indicates a significant projected expansion of 5G edge computing adoption in the region over the next 3 to 5 years, fueled by the shift among Asian retail and BFSI enterprises towards edge technologies.

5G EDGE COMPUTING MARKET - BY COMPANIES

Some of the prominent players operating in the 5G edge computing Market include:

1. Amazon web services (aws)
2. At&tinc.
3. Cisco Systems Inc.
4. Dell inc.
5. Fujitsu Limited
6. Huawei Technologies Co. Ltd.
7. IBM corporation
8. Hewlett Packard enterprise (HPE)
9. Microsoft Corporation
10. Nokia Corporation

NOTABLE HAPPENINGS IN THE 5G EDGE COMPUTING MARKET

• PRODUCT LAUNCH: Cisco unveiled its new lineup of Catalyst industrial routers in June 2021, enabling businesses to expand their networks to the edge while ensuring security, scalability, and flexibility through embedded 5G technology.
• PRODUCT LAUNCH: Verizon and AWS introduced their private mobile 5G edge computing service to US corporations in April 2021, leveraging Verizon's private 5G network and AWS outposts.
• PRODUCT LAUNCH: Nokia introduced an edge automation solution in March 2021 aimed at automating the management of various cloud data centers, reducing management complexity.
• EXPANSION: In February 2021, HPE announced its acceleration of space research with the HPE Spaceborne Computer-2 (SBC-2), a robust commercial 5G edge computing solution enabling real-time processing in space.

COLLABORATION: Dell Technologies announced its collaboration with VMware and SK Telecom in January 2021 to develop a unified multi-edge compute offering for private 5G, enabling businesses to leverage mobility and 5G edge computing capabilities.