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APAC edge computing market set to grow

China and Japan will account for the lion’s share of Asia-Pacific’s edge computing market as more organisations in the region look to streamline processes and improve productivity

The Covid-19 coronavirus pandemic and the strive to improve productivity through automation will speed up the adoption of edge computing in the Asia-Pacific (APAC) region, a study has found.

According to GlobalData, a data and analytics company, the market for edge computing in APAC is estimated to grow at a compound annual growth rate (CAGR) of 21% between 2019 and 2024 to reach $5.8bn in 2024.

By then, APAC will become the second-largest edge computing market behind North America. China and Japan will account for the lion’s share of the market, contributing about 61% of revenues in the region.

Across industries, companies in manufacturing, financial services, energy, IT and consumer goods would be the keenest adopters of edge computing, accounting for half of overall spending in 2024.

Shamim Khan, senior technology analyst at GlobalData, said the internet of things (IoT) and 5G would be the crucial drivers for the increased adoption of edge computing offerings in the APAC region.

“Together, these technologies are expected to transform whole industries and create a host of new opportunities for enterprises,” he added.

For manufacturing firms, industrial IoT with edge computing would help to streamline industrial processes, improve supply chains and enable industrial equipment to work with less or without human intervention.

Similarly, financial companies can take advantage of edge computing gateways to enhance the security and privacy of data for enhanced banking solutions.

In addition, Khan noted that the surge in the connected devices ecosystem, comprising smart cities, connected vehicles and smart homes would create huge volumes of data that would need to be stored, analysed and processed to facilitate timely decision-making. 

“Edge computing would be key in handling most of these challenges, as decentralised processing would allow for excellent response times and reduced latency,” he added.

Public cloud service providers have been ramping up their edge computing offerings of late. For example, Amazon Web Services (AWS) recently updated its Snowball Edge product, Microsoft announced its Azure Edge Zones and Google unveiled its Global Mobile Edge Cloud strategy.

Khan said although these offerings are primarily targeted at the US market for now, they are expected to make their way to APAC, given the growing demand for edge computing in the region. He added that the availability of these offerings will unlock a new range of distributed applications with a consistent architecture for enterprises in APAC.

“A large number of applications across enterprises would spur up, with 5G networks becoming more prevalent in the region. The shift from a cloud-based, centralised model to intelligence at devices would, in turn, require next-generation applications and new IT architectures,” he said.

Read more about IoT and edge computing in APAC

At least one cloud supplier is already working with telcos to support edge computing applications. In December 2019, AWS teamed up with a handful of telcos in the US, Europe, Japan and South Korea to offer Wavelength, a new service that supports the needs of edge computing applications on 5G networks.

The GSM Association’s head of APAC, Julian Gorman, said such partnerships would open up opportunities for telcos to offer services beyond connectivity, adding that the adoption of open infrastructure and open standards will also pave the way for telcos to expand their innovation capacity.

Meanwhile, more datacentre operators in the region are expected to build more edge datacentres to cope with the higher uptake of edge computing when 5G networks are in place.

“Cloud computing is a centralised model, but when you start moving intelligence to the edge in applications like self-driving vehicles, you will need edge datacentres to fulfil your requirements,” said Leung Wing Kin, chief technology officer at Huawei’s enterprise business group. “It’s not easy, but that’s the direction the industry is heading.”

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