Report: AI Will Drive Strong Edge Computing Forecast

International Data Corporation is forecasting worldwide spending on edge computing to hit $232 billion this year, a 15.4% increase over 2023. The figure is expected to grow to $350 billion by 2027.

The increase and the bullish forecast are driven, in part, by the growing popularity of artificial intelligence (AI).

“Edge computing will play a pivotal role in the deployment of AI applications,” said Dave McCarthy, research vice president of Cloud and Edge Services for IDC, in a prepared statement. “To meet scalability and performance requirements, organizations will need to adopt the distributed approach to architecture that edge computing provides.”

McCarthy noted that service providers, as well as original equipment manufacturers (OEMs) and independent software vendors (ISVs), will enable AI in edge locations.

IDC defines “edge” as “information and communications technology (ICT) related actions conducted outside of the centralized datacenter, where edge is the intermediary between the connected endpoints and the core IT environment.”

Usually, the edge is distributed, software defined, and flexible, according to IDC.

Service providers were one of 19 industries that IDC segmented in its edge computing research. Service providers are investing in edge computing to support multi-access edge computing (MEC), content delivery networks and virtual network functions, the researchers noted.

Those three use cases will account for nearly 22% of all edge spending this year.

Edge Computing Forecast

North America is expected to lead edge computing spending through 2027, with more than 40% of the worldwide total share, followed by Western Europe and China, respectively.

The largest investment share will be in hardware, at close to 40% of total spending, which will go toward building out edge capabilities driven, in large part, by service providers. IDC predicted that hardware spending will be driven by investments in edge gateways, servers and network equipment.

IDC expects all the industries that it studied to see five-year compound annual growth rates in the low-to-mid teens over the forecast period. The service provider segment is expected to see the highest CAGR – 19.1%


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