New IDC Spending Guide Forecasts Edge Computing Investments Will Reach $208 Billion in 2023

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NEEDHAM, Mass., February 15, 2023 – Worldwide spending on edge computing is expected to be $208 billion in 2023, an increase of 13.1% over 2022. Enterprise and service provider spending on hardware, software, and services for edge solutions is forecast to sustain this pace of growth through 2026 when spending will reach nearly $317 billion, according to the International Data Corporation (IDC) Worldwide Edge Spending Guide.

IDC defines edge as the technology-related actions that are performed outside of the centralized datacenter, where edge is the intermediary between the connected endpoints and the core IT environment. Characteristically, edge is distributed, software defined, and flexible. The value of edge is the movement of computing resources to the physical location where data is created, dramatically reducing time to value and the instant enablement of business processes, decisions, and intelligence outside of the core IT environment.

"Edge computing has gone mainstream," said Dave McCarthy, research vice president, Cloud and Edge Infrastructure Services at IDC. "The ability to distribute applications and data to field locations is a key element of most digital transformation initiatives. As vendors extend existing feature sets and create new edge-specific offerings, customers are accelerating their adoption plans."

IDC has identified more than 400 named use cases for edge computing across various industries and domains. The three edge use cases that will see the largest investments in 2023 – content delivery networks, virtual network functions, and multi-access edge computing (MEC) – are foundational to service providers' edge services offerings. Combined, these three use cases will account for nearly 20% of all edge spending this year. In total, service providers will invest more than $44 billion in enabling edge offerings in 2023.

For enterprise adopters, including the public sector, the edge named use cases with the largest investments in 2023 include production asset management, autonomic operations, omni-channel operations, freight monitoring, and augmented customer service agents. Combined, these use cases will represent more than 10% of all edge spending this year. The edge use cases that are forecast to have the fastest spending growth over the 2021-2026 period include emergency response, 360 degree educational video viewing, film/feature production, and lab and field (K-12).

"Despite different headwinds impacting buyers’ spending behavior, especially in Europe, edge computing remains one of the most resilient and attractive areas of investments, growing globally at a double-digit rate over the next five years," said Alexandra Rotaru, senior research analyst, Data & Analytics group at IDC. "Metrics related to enhanced innovation, performance, customer experience, or cybersecurity capabilities will enable companies across the world to expand their budget and build new edge infrastructures."

Across enterprise end user industries, discrete and process manufacturing will account for the largest portion of investments in edge solutions this year, followed by the retail and professional services industries. IDC expects all 19 industries profiled in the Spending Guide will experience double-digit spending growth over the forecast period, led by the service providers with a five-year compound annual growth rate (CAGR) of 21.1%.

The largest part of spending in edge will go toward services, comprised of professional and provisioned services, in 2023. Connectivity services will represent nearly half of this portion, followed by software as a service (SaaS) and support & deployment services. Hardware spending will be driven by investments in edge gateways, servers, and network equipment. Software will remain the smallest technology category over the forecast period.

From a geographic perspective, the United States will be the edge spending leader throughout the forecast period delivering more than 40% of the worldwide total, followed by Western Europe and China. Latin America and China will experience the fastest spending growth over the five-year forecast with CAGRs of 18.1% and 18.0%, respectively.

The IDC Worldwide Edge Spending Guide quantifies the edge computing market by forecasting enterprise and service provider spending across 17 technology markets, six technology domains, 19 industries, and nine geographic regions. This version (V2 2022) of the Spending Guide also includes more than 400 use cases that were segmented across various industries and domains.

About IDC Spending Guides

IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.

For more information about IDC's Spending Guides, please contact Monika Kumar at mkumar@idc.com.

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About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world's leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.

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