MarketsandMarkets forecasts the edge computing market to grow from USD 1.47 billion in 2017 to USD 6.72 billion by 2022, at a CAGR of 35.4%.
The Asia Pacific (APAC) market is expected to grow at the highest CAGR during the forecast period. Major countries in APAC include Australia, Japan, India, China, Philippines, and South Korea. The APAC region is expected to experience extensive growth opportunities in the next few years in the arena of Edge Computing, following which, the region is expected to grow at the highest growth rate. Increased adoption of IT infrastructure and IoT by the enterprises in the developing countries is one of the driving factors facilitating the edge computing market growth. Owing to the aggressive IoT deployment and IT transformation by enterprises across different verticals in the region, the edge computing vendors across the globe are interested in capitalizing on the growth opportunities in APAC.
The retail segment is likely to be the fastest growing vertical in terms of adoption of edge computing during the forecast period. The retail vertical is undergoing a significant transformation owing to the technological advancements in place. The emergence of IoT is further contributing to the digital transformation in the vertical and changing the traditional retail practices. The introduction of electronic Point-of-Sale (PoS) system in the retail vertical marks the beginning of evolution in the vertical. The vertical is now focusing on providing tailored offerings to customers in order to enhance their experience and increase the value. For instance, bluetooth beacons track the customers near the store to communicate and notify them about the tailored offerings to enhance the customer experience and target potential customers. Furthermore, digital shopping carts, social shopping tools, in-store videos, and digital signage are becoming common in the stores. Augmented reality and virtual reality technologies are transforming the retail vertical with Oculus goggles, smart mirrors, and smart shelves applications that target the potential customers and enhance the experience and value to have a competitive advantage in the market. This transformation is achieved with a combination of the internet, IoT transmitters, sensors, cameras, and beacons. High volumes of data would be generated from these smart applications. Storing and computing this data in the cloud increases the latency and the operational costs associated with the cloud. The edge computing solution empowers the retailers by collecting, storing, and computing this data at the edge of the network rather than in the cloud or data center. With the edge computing solution, retailers have gained a high scalability and network flexibility, required to grow at the rate the vertical requires.
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The Small and Medium Enterprises (SMEs) segment is expected to grow at a higher CAGR during the forecast period. Organizations with an employee range between 1 and 1,000 are categorized under SMEs. SMEs have been majorly dependent on data centers to process and analyze their data. However, budget constraints have been a major obstacle for SMEs to adopt data center services. Transferring and processing the data over the cloud increases the operational costs. Edge computing facilitates SMEs to collect, process, and store data at the edge of the network closer to the source, thus reducing the operational costs.