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Edge Data Center is Forecast to be a $3.62 Billion Market by 2022, Driven by Latency-focused Next-gen Applications
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As we enter the next era of digitization, we are amidst a silent revolution that will change the location from where we process data as well as the speed in which we do that—the reasons being Edge Computing and 5G. The term edge refers to the edge of a network, i.e., close to the data/information source and edge computing means processing data close to the source. Edge computing is giving rise to a new wave of data centers that are smaller in terms of footprint and located close to the source. The aim of this research is to neatly lay out the impact of edge as well as 5G on data centers by gathering expert opinion from industry participant’s and in-house Frost & Sullivan knowledge.
Frost & Sullivan finds that the edge data center market is forecast to grow at a CAGR of 36.3% from $768 million in 2017 to $3.6 billion in 2022. The need for edge-based data centers arises from three factors, latency, growing data volume and reduction in data processing at large data centers. It is of no surprise to find latency being one of the factors as next-gen applications are becoming extremely latency sensitive. For example, streaming a movie via Netflix or streaming a game via nVIDIA Shield. Both are bound to extreme latency sensitivity. The amount of data being processed at a core data center is likely to reduce as data that requires immediate processing is likely be fed to an edge data center, if present, for processing and then be fed back to the user. A key positive is reduction in latency as well as the volume of data being fed to a large data center. Also, aiding high speed latency will be implementation of 5G, which will enable data transfer speeds of 1 Gb/sec. Our research indicates that edge data centers will complement existing data centers by acting as an additional processing layer located close to the source.
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