The market for edge data centers and data centers in general continues to show rapid growth worldwide, as more and more companies prefer to acquire computing as a service rather than invest in facilities they own.
Investments to build data centers, including edge data centers, are rising from $230 billion in 2023 to $775 billion in 2034, at a rate of almost 12% per year, according to a survey by consultancy Precedence Research.
Within this total, one segment stands out, both for its speed and importance.
This is edge data centers, in which $139 billion was invested in 2019.
By 2026, however, it is expected that US$317 billion will be invested in edge data centers, according to a study by the British real estate company Jones Lang LaSalle (JLL), published on July 31.
There are at least five factors driving the need to build this type of data center.
The first is the number of applications that have become possible with the arrival of the fifth generation of mobile telephony, 5G.
But consultancies specializing in information technology also cite the great proliferation of Internet of Things (IoT) devices, video streaming for virtual and augmented reality applications, the progressive deployment of SDR (software-defined networks) and network functions virtualization (NFV).
And finally, it is necessary to meet the infinite growth in the volume of data of all kinds, storing, handling and processing it without overloading traditional data centers.
The need for real-time processing
Applications such as autonomous cars or multiplayer games with virtual reality are just two examples of applications that can benefit from edge data centers.
Processing the data from these applications cannot wait for a trip to a distant data center, as increased latency degrades the service and the user experience.
Data needs to be processed in data centers closer to people, cars and devices, guaranteeing an experience compatible with the service offered.
Furthermore, without edge data centers, the volume of data would undoubtedly overwhelm most networks in traditional data centers.
Making all other operations more difficult.
They are part of a global trend to distribute computing, so that part of it can even take place on devices.
Some cameras on the market already have artificial intelligence capabilities.
To process images and respond to the user without the need to exchange data with devices on remote networks.
The role of Edge Data Centers in distributed computing
The concept of distributed computing provides a computing structure in concentric circles, in which the central role is played by large corporate data centers.
In the circles that develop around them, other circles emerge.
One made up only of regional hubs, for example.
Another of metropolitan data centers.
Another of edge data centers.
And at the edge, or final circle, the sensors and devices.
It’s a layered approach, which ultimately provides flexibility, scalability and efficient data processing at the same time.
In addition to the high speed of processing and delivering information to applications, the use of edge data centers allows organizations to optimize their network resources, thus avoiding congestion and, consequently, reducing costs.
In addition, the fact that application data is distributed across several data centers also favors security and business continuity.
An incident could affect some of the data, but not all of it.
By integrating AI, IoT and 5G capabilities, edge computing can also add value to businesses.
Not only by reducing the workloads of traditional data centers, but also by optimizing networks and services and providing flexible solutions.
Strategic planning for edge computing
Although all the advantages are obvious, adopting edge computing requires careful planning by experts.
To make the right strategic choice about how to approach this technology and select the appropriate markets and applications, companies should research at least five issues, says consultancy PwC.
The first is the speed with which technology and market trends affect the company’s business.
The trends brought about by 5G and IoT, for example, first have an impact on the more developed markets, such as the US and Japan.
The second question involves looking at the competition.
If competitors are not yet using edge data centers, the company has a clear opportunity to take the lead in this field.
The consultancy also raises the question of the value chains brought about by these innovations.
How will they fit into current and future business models?
Cost is the fourth question. The company needs to plan to discover the cost of building, maintaining, managing and protecting a geographically dispersed network of edge data centers.
And finally, it’s worth finding out if there are additional revenue opportunities for the company to develop and provide managed services through edge data centers.
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