The amount of data generated at the enterprise edge by IoT devices and other sources continues to grow rapidly. IDC estimates that by 2025, there will be 41.6 billion IoT devices capable of generating 79.4 zettabytes (ZB) of data.
As data grows, enterprises prefer processing it at the edge for real-time decision-making over the battle delays and congestion issues associated with routing that data to the cloud or on-premises data centers. I’m starting to recognize it. PricewaterhouseCoopers (PwC) says the edge data center market will grow from $4 billion in 2017 to $13.5 billion in 2024. Looking to the future, MarketsandMarkets predicts that the edge data center market will grow to $29.6 billion by 2028.
The popularity of edge data centers has attracted many vendors, including startups like DartPoints, EdgeConneX, and Zella DC. Existing companies American Tower, Dell, IBM, and Schneider Electric also offer edge data center solutions.
What is an edge data center?
The shift from a centralized to a distributed data center strategy is a trend among hyperscalers who are building large data centers that can accommodate 10,000 or more racks and have a capacity of 80 megawatts (MW) or more. goes against the grain. In comparison, edge data centers are smaller, with capacities ranging from 500 kW to 2 MW. What it lacks in size it makes up for in versatility. These can be deployed virtually anywhere, including rooftops, extreme locations, and rural and underserved areas.
Modular edge data centers range in size from closets to shipping containers to garages. Turnkey design means built-in features such as security and cooling. They can be up and running quickly, and their standardized design allows businesses to order in bulk and deploy compatible, interoperable infrastructure across their global footprint.
Three key drivers of edge data centers
Edge data centers are becoming popular for a variety of reasons, but the main drivers align with several other big technology trends, including IoT, AI, and 5G.
1. Internet of Things
In industries such as healthcare, telematics, and manufacturing, both the number of endpoints producing data and the need for real-time processing make sending and receiving data to and from a centralized data center an expensive proposition. According to Gartner, approximately 45% of IoT data is already processed at the edge, and that number is expected to continue to grow.
“As the volume and velocity of data increases, so does the inefficiency of streaming all this information to the cloud or data center for processing,” said Santosh Rao, senior research director at Gartner. I am.
As more data is generated and processed at the edge, machine-to-machine (M2M) communications threaten to overwhelm traditional networks. Therefore, edge data centers not only facilitate real-time IoT use cases, but also protect traditional networks from heavy M2M traffic.
For example, in manufacturing, the number of connected sensors and machines is rapidly expanding, and these devices are generating vast amounts of data. Edge data centers allow manufacturers to avoid latency and congestion issues by processing data locally, optimizing production, preventive maintenance, and proactively addressing issues that can compromise just-in-time supply chains. enables real-time decision-making for corrective action. Other industries that are early adopters of edge data centers include education, healthcare, finance, and smart cities.
2. Artificial intelligence
AI at the edge enables use cases such as facial recognition in crowds, self-driving cars, and real-time health monitoring. However, JLL research shows that the rapid adoption of AI and ongoing cloud migration are outpacing data center providers’ ability to respond.
AI applications require large amounts of computing resources to generate and consume large amounts of data. The problem is that real-time capabilities are lost due to delays in moving data back and forth between centralized data centers and the edge, and the bandwidth required for this constant data flow increases costs.
According to JLL’s 2023 H1 North American Data Center Report, current and near-term data center capacity in key markets is struggling to keep up with demand as industries such as finance, healthcare, and manufacturing use up available data center capacity. He says there is no.
Edge data centers can serve enterprises as well as service and colocation providers as a way to rapidly deploy capacity as demand arises, while also filling coverage gaps in smaller markets. There is a possibility.
3.5G
While at first glance it may seem like 5G can compete with edge data centers, the two are more likely to complement each other. According to PwC, 5G is a key driver of “distributed small cell networks in edge data centers.” This network of edge data centers provides low-cost, low-latency support for use cases with large numbers of devices, such as sensor networks in factories and smart cities.
The same issues that plague real-time IoT use cases (latency, congestion, backhaul costs) also apply to 5G, and edge data centers can serve as a convenient way to overcome these issues.
Will RedCap spike demand for edge data centers?
The advent of 5G RedCap (capacity reduction) could further increase the incentive to deploy data center resources to the edge. RedCap was originally introduced in 3GPP Release 17 and was targeted at constrained devices that currently rely on LTE Cat-4 or other legacy connectivity. Full-fledged 5G includes a ton of advanced features that are overkill for many edge devices, and these features come at a cost.
Although RedCap has not yet been approved (it is expected to be approved later this year), pre-standard RedCap equipment has already begun to appear on the market, and AT&T, Ericsson, Nokia, and others are already testing RedCap-compatible equipment. Masu. (See also: Will RedCap 5G spark an IoT gold rush?)
RedCap offers better peak data rates, wider coverage, and lower latency than 4G LTE, especially compared to 3G, which is still prominent in many parts of the world. It is also designed to address constrained devices with simpler radio designs and low power needs. According to Ericsson research, relying on RedCap can reduce the cost of IoT devices by 65% (versus 5G).
Another benefit of RedCap is that it can help consolidate connectivity at the edge and beyond. Jason Lee, his research manager for 5G and mobility research at IDC, said: “WiFi, LPWAN, Bluetooth, LTE, 5G, etc. What are the right connectivity options? When?”
Many devices work fine on 4G or even 3G, but aren’t robust enough to bear the added cost of full 5G support. With 3G already phased out in the U.S., vendors are hoping his RedCap can change that equation and pull in laggards. “RedCap can help unify connectivity and ultimately serve as a gateway to an all-5G world,” Lee said.
First movers have an advantage
In Japan, 5G edge data center connectivity has already begun. IIJ (Internet Initiative Japan), the country’s first ISP, has deployed edge data centers to help provide end-to-end 5G services. IIJ had difficulty providing end-to-end 5G services because relying on centralized data centers created coverage gaps. End-to-end 5G requires infrastructure to be deployed close to the 5G antennas, but many antenna sites are remote or in constrained locations such as rooftops, making it difficult to deploy in a full-scale data center. is not realistic.
This means either traffic needs to be routed back to a central data center or the infrastructure needs to be deployed at the edge in small footprint data center packages. IIJ has begun building a hybrid 5G-MEC (mobile edge computing) network based on hardware from Australian edge data center provider Zella DC. 5G-MEC is currently providing the connectivity and infrastructure that requires low-latency, reliable communications, including use cases in telemedicine, smart factories, and even agtech, according to IIJ. The application is said to be possible.
In Australia, global fintech company Afterpay was expanding rapidly and needed to expand its data center infrastructure to keep up. The company offers a buy now, pay later payment platform that relies on a proprietary decision-making engine to determine a retail customer’s creditworthiness in near real-time. As the business grows, Afterpay collaborates with Digital Realty to deploy edge computing services, providing the low-latency, high-availability connectivity needed to process more than 2 billion transactions annually to approximately 450 people around the world. provided to employees.
In China, the operator of the Pingtan Strait Bridge deploys Vertiv edge data centers to manage its intelligent infrastructure. The bridge is a 16-mile, two-level span designed for a six-lane highway on the upper level and a two-track Grade I railroad on the lower level. Because the bridge is a dual-use bridge across the ocean, operators have to deal with issues such as high winds and waves, and it must be constantly monitored. The Pingtan Strait Bridge project deployed Vertiv’s Smart Aisle Edge Data Center to help automate conditions including condition monitoring, bridge operations management, and an intelligent gate system.
Although the edge data center market is still in its infancy, tailwinds including high-growth technologies such as AI, IoT, and 5G are expected to keep the market on a fast growth trajectory for the foreseeable future.
