Asia/Pacific spending on edge is forecasted to be $43.7 billion in 2023, an increase of 17% over 2022. Enterprise and service provider spending on hardware, software, and services for edge solutions is forecast to sustain this pace of growth through 2027 when spending will reach nearly $81 billion. Businesses and industries in the region are investing on edge to harness the benefits of low latency, real-time processing, and improved efficiency in various applications.
IDC defines edge as the technology-related actions that are performed outside of the centralized datacenter, where edge is the intermediary between the connected endpoints and the core IT environment. Characteristically, edge is distributed, software defined, and flexible. The value of edge is the movement of computing resources to the physical location where data is created, dramatically reducing time to value and the instant enablement of business processes, decisions, and intelligence outside of the core IT environment.
“Mobile edge attached to the 5G network is a strategic focus area and IDC expects to see deployments across the region in mobile edge at SPs to start to pick up. Some of the mobile edge nodes will also be located in 5G private wireless networks with single tenants” says Bill Rojas, Adjunct Research Director for IDC Asia/Pacific.
IDC has identified more than 400 named use cases for edge computing across various industries and domains. The three edge use cases that will see the largest investments in 2023 – content delivery networks, virtual network functions, and multi-access edge computing (MEC) – are foundational to service providers’ edge services offerings. Combined, these three use cases will account for nearly 20% of all edge spending this year. In total, service providers will invest more than $9 billion in enabling edge offerings in 2023.
For enterprise adopters, including the public sector, the edge named use cases with the largest investments in 2023 include production asset management, autonomic operations, general infrastructure public safety & emergency response, and telecom base station remote management. Combined, these use cases will represent more than 10% of all edge spending this year. The edge use cases that are forecast to have the fastest spending growth over the 2022-2027 period include product development virtual reality, asset maintenance, logistics and package delivery management and 360-degree educational video viewing.
“Top objectives of enterprises’ edge infrastructure investment in Asia Pacific are to reduce operational costs, increase storage capacities and secure IT infrastructure,” says Sharad Kotagi, Market Analyst, IT Spending Guides, Customer Insights & Analysis, IDC Asia/Pacific.
From an enterprise end-user industries standpoint, discrete and process manufacturing will account for the largest portion of investments in edge solutions in 2023, followed by the state/local government and professional services. IDC expects all 19 industries profiled in the Spending Guide will experience double-digit spending growth over the forecast period, led by the service providers with a five-year compound annual growth rate (CAGR) of 21.2%.
Edge hardware spending will be driven by investments in edge gateways, servers, and network equipment. Services dominated by connectivity services, which represent nearly half of services spending, followed by software as a service (SaaS) and support & deployment services. Software will remain the smallest technology category over the forecast period.
From a geographic perspective, China (PRC) will be the edge spending leader throughout the forecast period delivering more than 70% of the Edge spending in the region with a five-year compound annual growth rate (CAGR) of 17.5%, followed by Asia/Pacific excluding Japan and China (APeJC).