Spending on Edge Computing to Reach $378 Billion in 2028

According to the IDC report, global spending on edge computing is estimated to reach $228 billion in 2024, marking a 14% increase from 2023. This includes combined enterprise and service provider spending on hardware, software, professional services, and provisioned services for edge solutions. The forecast anticipates sustained strong growth through 2028, with spending expected to be near $378 billion, growing at a solid double-digit CAGR.

"As the focus of AI shifts from training to inference, edge computing will be required to address the need for reduced latency and enhanced privacy," said Dave McCarthy, research vice president for Cloud and Edge Services at IDC. "This trend not only optimizes operation efficiencies but also fosters new business models that were previously not possible with centralized infrastructure. Distributing applications and data to edge locations enables faster decision-making with reduced network congestion."

In manufacturing, accounting for the largest portion of spending, edge enables real-time monitoring of equipment and processes, reducing downtime and improving operational efficiency. Predictive maintenance use case, powered by AI at the edge, helps companies avoid costly breakdowns by identifying issues before they escalate. In utilities, edge continues to enable smarter, more efficient, and real-time management of critical infrastructure such as electricity, water, and gas. With the increasing deployment of renewable energy sources, smart grids, and IoT-enabled devices, the edge is a critical solution for utility companies to help with processing vast amounts of data quickly and securely.

Banking is the fastest-growing industry in terms of spending. Driven by the rise of AI-powered services, edge transforms how banks handle data processing, fraud detection, and customer interactions. Examples of use cases include AI-optimized operations, augmented fraud analysis and investigation, and others. IDC expects all 19 enterprise industries profiled in the spending guide will see five-year double-digit compound annual growth rates (CAGRs) over the forecast period.

However, the service provider segment will see the largest CAGR over the forecast period. In the service provider domain, investments in edge service delivery are built on infrastructure spending for multi-access edge computing (MEC), content delivery networks, and virtual network functions. Multi-access edge computing (MEC) represents the fastest growing area, becoming increasingly critical for supporting the ultra-reliable, low-latency communications required by next-generation applications steered by the widespread of 5G networks, IoT, and artificial intelligence.

"Enterprises are now accelerating their investments in edge and AI to drive real-time analytics, automation, and enhanced customer experiences, particularly in manufacturing, utilities, healthcare, and retail. Key technologies like AI-powered devices, edge servers with GPUs, and 5G connectivity are gaining traction, enabling organizations to process data closer to the source and achieve higher performance," said Alexandra Rotaru, manager for Data & Analytics in Europe. "In this journey, the service providers will play a critical role by offering tailored solutions, from infrastructure deployment to AI integration and edge management, helping enterprises seamlessly adopt edge and AI and unlock its full potential for advanced innovation."

Regarding technology spending, the most significant investment will stay within hardware at the beginning of the forecast, driven by AI processors and accelerators in edge infrastructure systems that are projected to generate increased demand in the coming years. However, provisioned services are estimated to surpass the hardware share by 2028. Within provisioned services, infrastructure as a service will represent the fastest growth category as a great tool that facilitates rapid development, deployment, and iteration of AI models and edge computing applications. Although small in terms of overall spending, on-premises software will remain a critical component of edge infrastructure, driven by accelerated demand for analytics and AI software.

From a geographic perspective, North America will remain the edge spending leader throughout the forecast period, followed by Western Europe, with Germany and the United Kingdom leading the spending. China, Latin America, and Asia/Pacific (excluding Japan and China) will experience the fastest spending growth over the five-year forecast.