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Cloud Edge Computing Demand Continues to Grow

Public cloud computing solutions are moving closer to the edge of networks where CIOs and CTOs are hosting new apps. The edge journey is well underway for forward-looking organizations as they seek to connect with customers, improve operational efficiency, and adopt digital business technologies to drive innovation.

The latest worldwide market study by International Data Corporation (IDC) found that three-quarters of organizations plan to increase their edge computing spending over the next two years with an average increase of 37 percent. A combination of factors is driving this increased spending at the edge.

Cloud Edge Computing Market Development

The performance requirements of expanding workloads and new use cases that leverage artificial intelligence (AI) and machine learning (ML) demand greater compute capacity at the edge. In addition, the amount of data being stored in edge locations are rapidly expanding, and organizations plan to keep this data longer.

As a result, the number of physical servers being deployed at the edge of cloud networks is rising. Most of this investment prioritizes the modernization of existing IT infrastructure in edge locations as opposed to building out new infrastructure.

The IDC study also found that enterprises deploying edge solutions are highly focused on building scalable businesses with investments that can contribute quickly to the organization’s bottom line.

The top objectives for edge deployment are increased revenue, improved products and services, and reduced costs. But edge deployments also present important opportunities to fill a niche market or disrupt an existing market.

“Enterprises are signaling that they want the benefits of a cloud operating model with the freedom to deploy anywhere,” said Dave McCarthy, vice president at IDC. “This creates tremendous opportunities for technology suppliers that can reduce complexity and maintain consistency in these distributed environments.”

Moreover, edge computing apps are enabling IT leaders to take a more strategic, influential role within their line-of-business organizations. Savvy CIOs and CTOs are supporting critical digital business transformation efforts within their broader organization.

Other key findings from the IDC study include how organizations rank the ability to integrate edge solutions with legacy IT infrastructure. It’s a key buyer selection criterion and is just as important as price in cloud edge procurement decisions.

However, edge management strategies are not tightly integrated with cloud and core, suggesting that organizations may need to revise their IT management strategy as they seek to leverage core, cloud, and edge resources as a cohesive set of flexible service resources.

More organizations will continue to deploy and support many different compute, storage, and network architectures at the edge. Deployment options in multiple environments is a key selection criterion, underscoring an organization’s plan to extend IT resources into many different types of environments.

Outlook for Edge Computing Applications Growth

Out of necessity and because of the need to leverage cloud resources, edge computing will continue to be a broad mix of cloud, colocation, field locations, and company-owned datacenter.

According to the IDC assessment, within the next two years, two-thirds of organizations will shift more toward public cloud resources. But overall, all edge types will likely increase globally.

Regarding equipment ownership, the majority of buyers indicated that their organizations prefer to retain ownership of infrastructure. This will fuel greater demand for flexible consumption models that have the operating expense benefits of cloud services with greater control.

That said, I believe the motivation for deploying IT infrastructure and applications closer to where data is generated and consumed is still important. Plus, there’s a demand to address growing concerns about latency, cost, resiliency, security, and regulatory compliance in the public cloud.

Besides, the trend of expanding support for globally distributed workforce solutions is creating more demand for enterprise software and SaaS applications delivered closer to remote working employees.

Originally published at https://blog.geoactivegroup.com on May 9, 2022.

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David H. Deans

David H. Deans

Technology, Media, Telecom analyst, consultant, columnist