The global edge IT infrastructure and data center market is expected to reach a value of $317 billion by 2026, according to a news release from real estate consulting firm JLL on August 12. This forecast represents more than double the market’s value of $153 billion in 2020.
Jonathan Kinsey, EMEA lead and global chair of data center services at JLL, emphasizes that the widespread adoption of technologies like IoT and generative AI hinges on the expansion of edge data centers. Without this infrastructure, these innovations are unlikely to achieve mainstream acceptance.
The increasing demand from global consumers and businesses for services with minimal latency, faster computing speeds, and advanced generative AI capabilities is expected to drive the need for edge IT infrastructure. For instance, the gaming industry, with technologies such as cloud gaming, has already spurred the demand for edge computing solutions that enhance gameplay without requiring hardware upgrades.
The expansion of edge IT infrastructure—which includes an ecosystem of device vendors, chip manufacturers, telecommunications providers, hyper scalers, data center operators, and cloud service providers—is anticipated to parallel the growth of IoT devices.
JLL predicts that the IoT sector will grow at a compound annual growth rate (CAGR) of 9.8% over the next five years, driven by industries such as mining, energy, public services, retail, and logistics.
JLL’s forecast aligns with the increasing need for faster data transfer and higher processing speeds brought about by emerging technologies like generative AI and the Internet of Things (IoT).
Edge data centers, which are strategically located closer to where data is generated or utilized, are better equipped to process and analyze information in real time, leading to quicker decision-making and more efficient operations.
Moreover, edge IT infrastructure plays a crucial role in expanding internet penetration rates. JLL identifies significant opportunities in regions like Asia-Pacific and the Middle East-North Africa, where there remains a significant gap in internet and mobile penetration between urban and rural areas.
Kinsey concludes: “By bringing processing facilities closer to the data source and the user, edge IT infrastructure will become an essential component of the global economy.”