LF State of the Edge report: $800bn market by 2028, strong and varied ecosystem

James is editor in chief of TechForge Media, with a passion for how technologies influence business and several Mobile World Congress events under his belt. James has interviewed a variety of leading figures in his career, from former Mafia boss Michael Franzese, to Steve Wozniak, and Jean Michel Jarre. James can be found tweeting at @James_T_Bourne.

Here’s an example of the scale of edge computing over the next decade: according to the LF Edge ‘State of the Edge’ report, total cumulative capital expenditures of up to $800 billion (£580bn) will be spent on the market between now and 2028.

The market research for the report from LF Edge, part of the Linux Foundation, was conducted by Tologa Research. The company concluded that the expenditure would be spent on new and replacement IT server equipment and edge computing facilities. This would be ‘relatively evenly split’ between device equipment and infrastructure edges.

Significant Covid-19-related change has occurred over the past year – and the report acknowledges acceleration in edge infrastructure and applications has been driven by the pandemic in some cases.

The report assessed the landscape thus:

“As a natural extension of cloud computing, the edge cloud construct is increasingly viewed as a key enabler for the Fourth Industrial Revolution in which the widespread deployment of the Internet of Things (IoT), the global sharing economy and the increase of zero marginal cost manufacturing deliver unprecedented communication-driven opportunities with massive economies of scale.

“The foundational options for edge infrastructure are expanding, as hyperscale data centre providers and telecom service providers jostle for position with suppliers of regional data centre, traditional colocation solutions, micro edge data centres, wireless towers and networking equipment,” the report added. “To a large extent, the return on investment for all these players will be determined by the effectiveness of the partnerships that they establish.”

Digging down into specific industries, manufacturing, healthcare and smart cities all saw a notable increase in percentage of overall use cases. Manufacturing now represents 6.2% of use cases, up from 3.9% in 2020, compared with healthcare (8.6% from 6.8%) and smart cities (6.1% from 5%). This saw a knock-on effect on mobile consumer and residential use cases, the two largest segments, while retail unsurprisingly also saw a year-on-year dip.

There are various elements which ensure solid growth across use cases involves 5G not being a requirement for certain mainstream edge applications. Many on the enterprise side will leverage wireline networks, while 4G-LTE, LTE-M and NB-IoT are described by the report as ‘adequate’. Looking further ahead, if 5G is required, it is now standardised, along with SD-WAN and SASE, the report added. The diversity of network performance requirements will inevitably increase.

Elsewhere, cloud-style consumption is influencing the edge, such as ‘all-in-one’ pricing models, indicating maturity. The largest cloud providers, as reported extensively by sister title CloudTech, are looking at hybrid cloud as an equal experience across any environment. AWS Outposts, Google Anthos, Microsoft Azure Arc, IBM Cloud Satellite are all examples. “Major players… are extending the cloud experience to far flung locations with the promise of a consistent application and operations experience,” the report noted.

This is all tied together by the continued influence of open source; ‘enabling organisations to accelerate adoption and deployment’ as well as ‘facilitating standardisation across the industry.’

“The 2020 findings underscore the tremendous acceleration of digital transformation efforts in response to the pandemic, and the critical interplay of hardware, software and networks for servicing use cases at the edge,” said Jacob Smith, VP of bare metal at Equinix and co-chair of the State of the Edge report.

You can read the full report here (pdf, email required).

Want to learn more about topics like this from thought leaders in the space? Find out more about the Edge Computing Expo Europe on June 16-17, a brand new, innovative event and conference exploring the edge computing ecosystem.

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