Managed Edge Services Market Expected to Grow at a Rapid Pace, Says IDC

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As organizations seek to low-latency edge services to solve process efficiency, enable new consumer apps, comply with data sovereignty, and deal with security concerns, managed edge services promise to be a high-growth industry. Global sales for managed edge services will reach $445.3 million in 2021, up 43.5 percent from 2020, according to a new prediction from International Data Corporation (IDC). The compound annual growth rate (CAGR) for managed edge services is anticipated to be 55.1 percent for the forecast period of 2021-2025.

Photo Ghassan Abdo, research vice president, Worldwide Telecom, Virtualization, and CDN at IDC
“Managed edge services represent a significant monetization opportunity for service providers to capitalize on their investment in edge compute,” said Ghassan Abdo, research vice president, Worldwide Telecom, Virtualization, and CDN at IDC.

Given the embryonic demand for managed edge services, a number of service providers and technology manufacturers are seeing this sector as the next major moneymaker. Through the relationships they are forming with 5G service providers, IDC believes public cloud providers, or hyperscalers, will be important facilitators of edge services. Edge services are being viewed as a trigger for the fourth industrial revolution by certain service providers, while CDN providers are already moving their efforts to edge applications.

“Managed edge services represent a significant monetization opportunity for service providers to capitalize on their investment in edge compute,” said Ghassan Abdo, research vice president, Worldwide Telecom, Virtualization, and CDN at IDC. “At the same time, service providers are keenly aware of the potential impact of the edge on their current market position and are watching closely for unforeseen competition from adjacent markets and new disruptors. Technology vendors including network equipment providers (NEPs) and software, datacenter, and networking vendors are vying to shape this market and play a significant role in delivering innovative edge services.”

CDN Edge Deployment

IDC has identified three major deployment patterns for managed edge services based on extensive interactions with service providers and technology suppliers:

  • On-premises deployment – This refers to managed edge use cases in which the edge compute infrastructure is installed on the premises of the company, often known as private deployment. This deployment methodology is suited to industrial use cases, healthcare, and AR/VR applications, and is designed to fulfill the demand for extremely low latency.
  • Service provider edge deployment – This refers to managed edge services delivered by fixed and mobile edge computing placed at the provider edge. This deployment strategy, according to IDC, will encourage the creation of a wide range of vertical use cases.
  • CDN edge deployment – This refers to edge computing that is installed at CDN POPs or edge locations to deliver managed edge services. These use cases will provide a customized, high-fidelity, and interactive rich media customer experience, enhancing content delivery.

According to IDC, the on-premises edge category will increase at a 74.5 percent CAGR over the next five years. With a CAGR of 59.2 percent, the service provider edge category will be the second-fastest expanding market sector by 2022, allowing it to overtake the biggest market segment. The CDN edge category is anticipated to grow at a 41.9 percent CAGR over the next five years.

The ‘Worldwide Managed Edge Services Projection, 2021–2025’ study is an IDC research that gives a global forecast for managed edge services from 2021 to 2025. The projection estimates the income potential for service providers (SPs) who supply managed edge services on a monthly recurring revenue basis. Communications service providers, content delivery network (CDN) providers, public cloud providers or hyperscalers, and managed service providers are all examples of service providers in this context. This is IDC’s initial projection for this new and rapidly growing industry.

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