18 Jan 2022
IDC Forecasts Double-Digit Growth for European Edge Investments, Driven by Increased Spending across Enterprises and Service Provider Areas
LONDON, January 18, 2022 — International Data Corporation's (IDC) Worldwide Edge Spending Guide estimates that enterprise and service provider spending on edge computing will reach $40 billion in 2022 in Europe and significantly increase over the forecast period, reaching nearly $64 billion through 2025, with a five-year compound annual growth rate (CAGR) of 16.4%. Performance, innovation, and cost improvement are the top business goals driving adoption in Europe, pushing nearly one in three European organizations to plan to use edge technologies in the next few years.
Driven by its role in bringing computing resources closer to where the data is created, edge dramatically reduces time to value and enables business processes, decisions, and intelligence outside of the core IT environment. Edge will therefore unlock an entire set of new opportunities for new solutions to be developed to serve different industries and use cases in Europe.
In 2022, most European enterprise and service provider spending on edge is expected to remain within the services category, mainly professional and provisioned services, followed by hardware, driven by the adoption of light edge platforms. Compared with heavy edge platforms designed to perform heavier tasks adapted for the edge location or deployment, light edge platforms are designed with low-power components to be able to run limited or single functions in environments where power and cooling availability are limited. The remainder of the market is allocated to software, driven by spending on security software, used to ensure integrity of data, end points, and infrastructure and systems infrastructure software.
Edge services are also the fastest-growing area in the European edge landscape, driven by adoption of provisioned services such as connectivity and software as a service (IaaS, PaaS, and SaaS).
"The increasing inter-dependency of infrastructure, software, communications, and cloud will be under the spotlight over the next few years," said Andrew Buss, research director with IDC's European Enterprise Infrastructure group. "In this case, we'll see more and more technology providers partnering to be able to mix all these capabilities together to offer a portfolio of end-to-end solutions and use cases."
With different use cases emerging in the European edge landscape, content delivery networks and virtual network functions, predominantly found in the service providers' edge services offerings, will see the largest investments in 2022. In Europe, service providers will invest more than $8 billion in enabling edge offerings this year and will become the fastest-growing spending area through 2025.
For European enterprise adopters, the edge use cases with the highest adoption in 2022 include manufacturing operations, production asset management, omni-channel operations, smart grids, and freight monitoring. Use cases that will see the fastest spending growth over the forecast period are those linked mostly with artificial intelligence and AR/VR domains, such as AR assisted surgery, anatomy diagnostic, expert shopping advisors and product recommendations, and automated claims processing. Even though these domains will strongly develop in the next couple of years, IoT will remain a key component of edge spending in Europe.
Across enterprise end-user sectors and industries, distribution and services and manufacturing and resources will drive more than half of the European investments in edge solutions in 2022.
"With new industry-specific solutions developed and a value chain that is building up in Europe, many industries have started to understand the benefits and opportunities behind edge and have increased their edge investments," said Alexandra Rotaru, research analyst with IDC's European Customer Insights & Analysis group. "Therefore, organizations will increasingly move from initial awareness and pilot phases to more mature production rollouts in the next few years, supported by a wide range of edge-enabled service providers."
The IDC Worldwide Edge Spending Guide quantifies the edge computing market by forecasting enterprise and service provider spending across 17 technology markets, 6 technology domains, 19 industries, and 9 geographic regions. The V2 version (December 2021) of the Spending Guide also includes 50 new use cases that were segmented across various industries and domains, bringing the total number of named use cases to 155.
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, enabling users to easily extract meaningful information about each market by viewing data trends and relationships.
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