Global colocation edge data center market size is anticipated to expand at a significant pace between 2022 and 2028, owing to increased applications across telecom, BFSI and retail sectors. Edge data centers provide advantages like reduced cost, minimum latency and faster delivery of services over the network. The demand for colocation services has been rising across both, large enterprises as well as small and medium enterprises worldwide, driving the market growth.
The two major types of colocation edge data centers are retail and wholesale colocation providers. A tremendous increase in data consumption across developing nations has highlighted the need for edge data center services. According to GSMA reports, at the end of 2020 there were nearly 1.6 billion mobile service subscribers in the Asia Pacific region, which consists of a number of emerging economies. The figures represent a considerable potential for the retail, BFSI, telecommunication and healthcare applications of edge data centers.
Retail applications are expected to hold a significant share of global colocation edge data center industry, due to rapid adoption of e-commerce platforms. Online shopping trend has grown at a substantial pace over the past decade owing to fast internet access and improvement of mobile networks. Using consumer data, retail and online businesses are able to offer customized services on their platforms, which is among the key benefits of edge computing, besides faster webpage accessibility.
Colocation edge data center market share from IT and telecom applications will grow at a notable rate up to 2028, with increasing deployment of 4G and 5G networks. A report from the European Court of Auditors estimates that the total 5G deployment cost across all EU countries up to 2025 could surpass USD 430 billion, including new infrastructure and upgradation of existing fixed infrastructure. Installation of 5G supported equipment at such a large scale will foster the demand for edge data centers, particularly in remote areas which will get improved connectivity.
Middle East and Africa (MEA) colocation edge data center industry outlook will remain strong due to robust healthcare, BFSI and retail sectors. The increased availability of connected cars will reinforce the need for edge data processing capabilities. In addition, rising focus on deployment of autonomous vehicles in countries like the UAE will advance the demand for edge data centers.
Increased digitalization of manufacturing facilities will augment LATAM colocation edge data center market forecast over 2022-2028. Modernization of production units allows for better optimization of different operations, helping to lower the overall costs. Upgrading to digital technologies and components requires fast data processing abilities, indicating the likely demand for colocation edge data centers in the region.