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IDC Forecasts Strong Growth For The Managed Edge Services Market With Worldwide Revenues Approaching $2.8 Billion In 2025

Managed edge services promises to be a high-growth market as enterprises look to low-latency edge services to address process efficiencies, support new consumer applications, comply with data sovereignty, and deal with security threats. According to a new forecast from International Data Corporation (IDC), worldwide revenues for managed edge services will reach $445.3 million in 2021, an increase of 43.5% over 2020. Over the 2021-2025 forecast period, the compound annual growth rate (CAGR) for managed edge services is expected to be 55.1%.

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Given the nascent demand for managed edge services, a wide range of service providers and technology vendors are looking at this market as the next big revenue opportunity. IDC believes public cloud providers, or hyperscalers, will be key enablers of edge services through the partnerships they are establishing with 5G service providers. Some service providers are considering edge services as the catalyst for the fourth industrial revolution while CDN providers are already shifting their investments toward edge applications.

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

Based on extensive discussions with service providers and technology vendors, IDC has identified three primary deployment models for managed edge services.

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On-premises deployment: This represents managed edge use cases where the edge compute infrastructure is deployed at the enterprises’ premises, also referred to as private deployment. This deployment model is intended to address the need for extra low latency and is applicable to industrial use cases, healthcare, and AR/VR applications.

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Service provider edge deployment: This represents managed edge services provided by edge compute deployed at the provider edge, both fixed and mobile. IDC expects this deployment model to spur development of a wide range of vertical use cases.

CDN edge deployment: This represents managed edge services provided by edge compute deployed at the CDN POPs or edge locations. These use cases will enhance content delivery with personalized, high-fidelity, and interactive rich media customer experience.

IDC projects the on-premises edge to be the fastest growing segment with a five-year CAGR of 74.5%. The service provider edge will be the second-fastest growing segment with a CAGR of 59.2%, which will enable it to become the largest market segment by 2022. The CDN edge segment is expected to have a five-year CAGR of 41.9%.

The IDC report, Worldwide Managed Edge Services Forecast, 2021–2025 (IDC #US47308121), provides a worldwide forecast for managed edge services covering 2021–2025. The forecast quantifies the revenue opportunities for service providers (SPs) that offer managed edge services on a monthly recurring revenue contractual arrangement. Service providers, in this context, comprise communications SPs, content delivery network (CDN) providers, public cloud providers or hyperscalers, and managed service providers. This is the first forecast provided by IDC on this new and developing market.

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