Cities and telecom operators are placing their bets on edge computing which will see significant growth in the coming years

Quad Intel conducted a market study on edge computing in Europe. The results of the study show that the edge computing market in Europe is expected to reach an annual growth rate of 29.3% until 2023 as published in the Europe Edge Computing Market. What are the key drivers of this growth?

Published in May 2022, the Europe Edge Computing Market report contains detailed information on the demand, growth, opportunities, and limits of the edge computing market. The experts also analyzed the market’s structure and identified the key market players. According to Quad Intel, the value of the edge computing market will reach USD 1.94 billion in 2023 in Europe.

Edge computing — where and for whom?

In the report, analysts classified the market by dividing it into applications and end-users. Among the former, it turns out that the largest share belongs to smart city solutions. Over 240 cities with over 100 000 inhabitants are expected to implement smart city solutions which will be supported by edge compute technology.

— The transformation of a city into a smart city does not happen overnight. In order to build efficient and smart city infrastructure, we need to leverage off and integrate an entire ecosystem of solutions and technologies including data centers, IoT solutions, 5G technologies, software houses, and technology manufacturing venues. Ensuring continuous access to data and the highest possible levels of security of data storage all in the end user’s proximity are critical elements of success. are. Edge computing is an inherent feature of a smart city which we use in Poznan’s deployments. Our Poznan Smart City app is hosted in a cloud environment but physically in a data center in the center of the city to help us manage security elements while at the same time optimizing the speed of access to information for our citizens.  – says Michał Lakomski, Head of Digitalization and Cybersecurity Office at Poznan City Hall.

The need for intelligent factories, autonomous vehicles, smart electricity grids, and intelligent healthcare solutions will also contribute to increased demand for edge compute solutions, among others, due to the requirement for foredge compute solutions in IoT technologies.

Quad Intel identifies the British healthcare system as a practical example where IoT is used in combination with edge computing. In the report quoted above, analysts claim that thanks to the implemented IoT and edge solutions, the British economy will save over USD 5 billion between 2018–2023.

— Some solutions and technologies require near-instant transfer and processing of data – autonomous vehicles or life support systems in hospitals can serve as a great example. Edge computing allows to decrease delays related to data transfer and and hence expedite the decision-making process or application operation. As a result, edge computing as an element of the ecosystem makes it possible to implement and derive use cases from technologies that would otherwise have been impossible – says Wojciech Stramski, CEO of Beyond.pl, a green data center and cloud services provider, which is operating one of the three most secure data centers in the EU.

The gaming, digital entertainment, and e-commerce industries will also all be beneficiaries of edge compute technology. In the UK, over 47% of British believe that smart home devices will have a positive impact on their lives in the coming years.

End-Users and Key Investors

Among the end-users and companies investing in edge solutions, Quad Intel lists enterprises from the energy, public utilities, IT, telecom, and electronics manufacturing industries. The latter three contribute most significantly to the market growth in Europe.

The demand for edge compute technologies is also closely correlated with the development of the 5G network, which is being increasingly adopted in IoT devices and smartphones. Europe is expected to have 214 million 5G connections by 2025. Analysts predict that telecom operators in Europe and in the USA will have spent USD 185 billion on 5G by 2026.

— IT companies are obviously a vital technology partner in this ecosystem, especially local data center operators and cloud service providers. It may seem that edge computing is a departure from the cloud. However in reality, both technologies complement each other perfectly. By combining all of these solutions, we can create a flexible and scalable infrastructure for real-time and secure data processing, which takes place in close geographical proximity to the end-user. Considering the fact that in most cases edge data processing centers will become more and more important, and they will be located in the vicinity of large city agglomerations, it is vital that these solutions comply with the most demanding sustainability standards. The assurance that these data centers function on green energy and meet the stringiest energy efficiency standards, limiting water consumption, ensuring circular economy concepts are at the foundation of the digital transformation of Europe, as it aims at reaching climate neutrality by 2050 – adds Tomasz Kwiczor, Colocation Services Director at Beyond.pl.

Key players and risks

According to the analysts, further growth can be stifled by a talent gap – resulting in a growing difficulty to secure workers with appropriate technical skills. The continuous optimization of edge computing n will also be a challenge, especially when as these technologies are rolled out in new areas.

Interestingly, despite the growth expected on the European edge computing market, the key investors today are predominantly American corporations with key players being Cisco Systems, Microsoft, IBM, Google and Amazon.