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Why Edge Data Centers Are the Future

Posted on May 18, 2021 by Neche Veyssal

Enterprises, telecommunications companies, and cloud service providers will increasingly invest in edge data centers in the coming years to speed applications such as streaming video, factory automation, and telemedicine; and enable new technologies, such as autonomous vehicles and augmented and virtual reality (AR/VR). 

PricewaterhouseCoopers predicts that the global market for edge data centers will more than triple, from $4 billion in 2017 to $13.5 billion in 2024. 

Edge data centers are small data centers located at the edge of the network, where they are closer to users and devices. Having compute power at the edge enables faster performance and lower latency because organizations don’t have to move the data to far-flung data centers to process it.  

For example, by keeping data and compute power at the edge, a factory that manufactures car seats can use visual analytics algorithms to detect defects in real-time, according to Accenture.  

Besides AI and factory automation, a recent Data Center Frontier story said prominent edge computing use cases include: 

  • Content delivery. Video streaming is more popular than ever, and content delivery networks must now handle larger 4K video. The use of edge data centers not only ensures fast, high-quality video to consumers, but with streaming services increasingly producing unique content, edge data centers allow film and TV production crews to send their “dailies” – raw, unedited footage – back to their studios every day. 
  • Gaming. Video games and eSports are perhaps the fastest-growing consumer use case for the need for low-latency connectivity.  
  • 5G and 4G infrastructure. Mobile carriers are making huge investments in 5G networks, while their existing 4G networks face increased demand for new services and existing applications. Edge data centers ensure good customer experiences for these 5G and 4G services and applications. 
  • Telemedicine. The pandemic sped the adoption of virtual doctor visits. But for the healthcare industry to improve telemedicine services, it will require more local infrastructure to integrate medical imaging.  
  • Autonomous Vehicles. Self-driving cars will require massive compute power at the edge and could generate up to 5TB of data an hour.   

Enterprises and Telecommunication Companies Drive Edge Data Center Growth  

Today, enterprises and telecommunications companies are the biggest drivers of edge data centers, according to a recent Data Center Knowledge story. Meanwhile, cloud service providers are already on the edge and are continuing to build out their presence there.   

For enterprises, the biggest driver of edge data centers is industrial automation and using IoT to enable smart manufacturing, but they are also using it for healthcare and retail, the story said.  

Enterprises are deploying edge computing infrastructure on their own premises, such as factory floors or retail branches, but they are also relying on local and regional colocation data centers, Omdia analyst Cliff Grossner told Data Center Knowledge.  

Content delivery network capacity and network function virtualization are currently the biggest drivers of edge deployments for telcos. The use of edge data centers for next-generation applications such as autonomous vehicles and AR/VR is still in its infancy. In the future, telcos are expected to invest more in edge data centers to pursue new revenue streams from autonomous-vehicle communications, AR/VR as well as video content delivery and gaming, the story said.