How Are Mobile Data and OTT Traffic Steering Edge Data Center Market growth?

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A number of factors such as the commercialization of 5G, high demand for internet of things (IoT) devices.

A number of factors such as the commercialization of 5G, high demand for internet of things (IoT) devices, and dense over-the-top (OTT) and mobile data traffic are expected to drive the edge data center market at a CAGR of 25.4% during the forecast period (2020–2030). The market revenue stood at $5.3 billion in 2019, and it is projected to reach $53.1 billion by 2030. In recent years, the rising adoption of IoT technology in the healthcare and automotive industries has become a major market trend.

The increasing mobile data traffic is a prominent growth driver of the edge data center market across the world. The growing usage of smartphones and IoT devices is resulting in the generation of high volumes of data. To manage the mounting amount of data, umpteen edge data centers are being deployed across the world. The rising penetration of the internet has fueled the adoption of these devices around the world. 

Additionally, the soaring OTT traffic, on account of the surging demand for OTT services and rising shift toward online content, will also augment the edge data center market growth in the coming years. As conventional data centers are usually located far away from the users, OTT content sometimes observes latency, owing to which, the video or song keeps buffering. To provide an uninterrupted OTT experience, a large number of edge data centers are being set up in the proximity of users, because these centers reduce the transmission time of the data from the source to its destination.

The application segment of the edge data center market is classified into banking, financial services, and insurance (BFSI), information technology (IT) and telecom, logistics and transportation, retail, government, healthcare, and others such as manufacturing, energy, and media and entertainment. Among these, the BFSI category will account for the largest market share throughout the forecast period, due to the surging focus of BFSI organizations on creating a robust IT infrastructure and the growing need for storing and processing consumer data securely. 

Globally, North America holds the largest share in the edge data center market due to the surging data traffic, rising government initiatives for the development of data centers, and increasing commercialization of 5G in the region. Of the North American nations, the U.S. is the larger revenue contributor to the regional market as  manystates in the U.S. provide extensive financial incentives for data centers and huge investments are being made by private companies in edge data centers in these states. 

Whereas, the Asia-Pacific (APAC) edge data center market is expected to register the fastest growth during the forecast period. This can be ascribed to the rising internet penetration in the developing countries, such as China, Indonesia, and India, and increasing digitization in this region. For instance, the Internet & Mobile Association of India (IAMAI) revealed that in November 2019, India had over 504 million active internet users, which was a 12% more than the number recorded in March 2019. Besides, the escalating use of IoT devices and the surging shift toward OTT content is also driving the market growth in the region.  

Thus, the surging mobile data traffic and OTT traffic and burgeoning use of IoT devices and smartphones will drive the demand for edge data centers in the foreseeable future.