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Edge data center market to accrue substantial gains from the IT & telecom applications, global industry revenue to surpass USD 13 billion by 2024

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Increased deployment of edge computing and the need for having a greater control on data has enhanced the edge data center market penetration across numerous industry verticals worldwide. Establishing a data center close to the source of information allows for a faster access and real-time analysis of data, complemented with reduced network traffic and lower cost for operating and maintaining the infrastructure. The edge data center industry has enabled organizations and cloud-based service providers to reach smaller cities, locations where large data centers do not have a presence but represent considerable data generation.

U.S. edge data center market, by application, 2017 & 2024 (USD Million)
U.S. edge data center market, by application, 2017 & 2024 (USD Million)

Continuous growth of the IT and telecommunications, healthcare, banking and energy segments have gradually propelled the edge data center market revenue over the last few years. These sectors generate enormous amounts of information which are used by enterprise customers and businesses to enhance consumer experience. Growing popularity of online streaming services has also benefited the edge data center industry, as caching web application or content on servers nearer to the market allows for high-quality and high-bandwidth services. Companies like 365 Data Centers and EdgeConneX have tapped into these opportunities and expanded their edge data centers around the globe.

Elaborating further, EdgeConneX had earlier in the year announced its plans to add up to 50 MW capacity in North America, cover tier-2 cities like Atlanta, Phoenix, Denver, among others, and had already opened its second center in Atlanta by August. It later unveiled an edge data center in Toronto as well, bringing its total number to 40 such centers spread over North America, South America and Europe, becoming a key player in the edge data center market. More recently, it had confirmed the acquisition of an edge data center in Warsaw, Poland, encouraged by the nation’s rising adoption of cloud, favorable data regulations and ease of access for nearby countries.

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Widespread expansion activities undertaken by the company is representative of the overall edge data center industry trends, driven by the unparalleled rate of development in the telecommunications sector. The growth of IoT and the increasing number of connected devices globally has created a need for communicating captured valuable data quicker. It is projected that by 2022, the number of connected devices in the world will reach 29 billion, indicating the massive amount of data that will be gathered, inadvertently strengthening the edge data center market.

The propagation of 4G LTE networks has allowed consumers to access and use various online services, with LTE downloads averaging around 19.4 Mbps in the U.S. over the last quarter of 2017. Fast developing economies have also witnessed an accelerated growth rate in terms of IoT and data usage, with average 4G consumption in India reported to be around 11 GB per month in December 2017. Telecom firms are leaning more towards edge computing to gain the ability to store immense data accumulated from devices and direct it straight to a central center or cloud platform, minimizing the backhaul traffic.

Additional reports have indicated that by 2021, global mobile data traffic will reach nearly 49 exabytes per month, which would be a seven-fold increase from 2016 figures. 5G, the latest generation of communication networks, is expected to grow steadily over the period and can become the key network utilized for most applications over the following years. Experts insist that without edge computing, 5G will not be able to meet its intended goals of very low latency and colossal broadband services. Subsequently, as the implementation of 5G proceeds steadily throughout the world, fulfilling the network’s huge potential will necessitate the advancement of the edge data center market.

All in all, the rising network consumption in the telecommunications industry consumers and the augmented utilization of edge computing in other sectors will fuel the global edge data center market, with its valuation estimated to cross USD 13 billion by 2024. Fast-growing companies like Anixter, Cisco Systems, Dell, EdgeConneX, 365 Data Centers, Panduit Corp, Schneider Electric, and many others offer the required edge data center infrastructure, equipment and third party services.

Author NamePankaj Singh

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Data Center Infrastructure market to be strongly characterized by regulatory framework, APAC to drive the regional landscape

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Nlyte’s partnership with the IBM Watson IoT group is an exemplar precedent underlining rapid expansion of data center infrastructure market. Recently inked, through this deal, the companies intend to leverage maximum potential of advanced analytics and AI in its data centers.  Speaking of the strategic agreement, one of the spokesperson of Nlyte has been quoted saying that the complexity, scalability, and optimization of modern data centers demand the requirement of advanced analytic solution integration. Reportedly, Nlyte is amalgamating its patent NEO (Nlyte Energy Optimizer) with IBM Watson’s advanced AI abilities in a quest to provide data centers with new heights of operational comprehensiveness. This alliance, as per experts’ opinion, has surely strengthened Nlyte’s stance in data center infrastructure market that pegged a valuation of USD 40 billion in 2017.

Europe data center infrastructure market, by product, 2017 & 2024 (USD Million)
Europe data center infrastructure market, by product, 2017 & 2024 (USD Million)

A stringent regulatory framework speaks volume and has much to contribute in data center infrastructure industry augmentation. With cyber-attacks becoming a global concern, various regulatory bodies have mandated guidelines to identify and continuously monitor potential vulnerabilities in digital infrastructure. Companies partaking in data center infrastructure market therefore, now are extremely particular to develop solutions that are completely in compliance with regulatory standards. In this regard, recently Nlyte Software made its way to headlines, for receiving the much awaited approval for its DCIM solution from the Department of Homeland Security.

Allegedly, the latest approval makes the America data center infrastructure industry giant to become the first DCIM solution provider in the United States that has strictly adhered to all the conditions mentioned in the Phase 1 of CDM program (Continuous Diagnostics and Mitigation) of the federal government. For the records, the U.S. federal government rolled out this aforementioned CDM Program few years back, in a bid to ensure integrity and security of hardware as well software assets of the nation. Not to mention, with increasing adoption of these regulations, U.S. data center infrastructure industry is certain to carve a profitable roadmap over the ensuing years.

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Citing yet another instance where governmental initiative has given a substantial boost to regional data center infrastructure market, the Northern Territory of Australia that has released its Budget for the year 2018-2019, has allocated a sum of AU$18.38 million to support initiatives that are under the Department of Corporate and Information Services. Reportedly, as a part of the scheme, the government has a plan to increase its number of physical servers and number of fully managed servers by 16 and 100 respectively in this financial year. With such enormous project in the pipeline, regional data center infrastructure market players are sure to gain monetary benefits in securing Australia’s data center network.

Speaking of the regional aspect, it is prudent to mention that Asia Pacific is at the vanguard of data center infrastructure industry. In fact, Asia Pacific market is forecast to witness nearly 14% CAGR over 2018-2024. The growth can be primarily attributed to the increased penetration of digital technologies among consumers as well as businesses across this belt. Rapid industrialization along with robust growth in outsourcing activities especially in countries like India and China have led to a subsequent increase in organizational data traffic. In a bid to accommodate this huge traffic, companies are increasingly investing in new facilities, thereby proliferating APAC data center infrastructure industry.

Despite these growth opportunities, data center infrastructure market is still facing a challenge of bridging complex web of interconnections with a data center network. Nonetheless, with the advent of optimized workflow procedures, adoption of real-time monitoring system, and enhanced tools, the aforementioned stumbling block is likely to get overcome within a short span. Furthermore, the lure of big data analytics and extensive proliferation of cloud technologies would leave a complementary influence on data center infrastructure industry space. In terms of commercialization, the business space is forecast to exceed a massive valuation of USD 90 billion by 2024.

Author NameSatarupa De