• One of the biggest signs that IT is rapidly expanding beyond the data center is the rise of edge computing.
• Edge is a distributed computing model that places functions such as computation, data analysis and storage closer to the sources of the data.
• This can help make applications run faster and speed up access for users by reducing the latency compared with applications run on servers in a data center.

One of the biggest signs that IT is rapidly expanding beyond the data center is the rise of edge computing, a distributed computing model that places functions such as computation, data analysis and storage closer to the sources of the data.

With edge technology, users are likely to be physically closer to servers than if all servers were in one place such as a data center. This can help make applications run faster and speed up access for users by reducing the latency compared with applications run on servers in a data center.

Worldwide spending on edge computing is expected to be $232 billion in 2024, an increase of 15% over 2023, according to a March 2024 forecast from the International Data Corporation. Combined enterprise and service provider spending across hardware, software, professional services, and provisioned services for edge will sustain strong growth through 2027, the IDC said, when spending will reach nearly $350 billion.

Companies typically use edge computing in three key scenarios, said Thomas Bittman, vice president and analyst with Gartner.

One is when they need a faster response than a distant data center can provide. Another is when the cost of sending raw data elsewhere is more expensive than processing it closer to the user. And a third is when they can't rely on a network connection to a distant data center.

Edge can provide potential top-line benefits such as new business opportunities, and bottom-line benefits such as more automation, greater efficiency and higher productivity, Bittman said.

"In essence, edge computing complements cloud computing, extending digital transformation to the edge," Bittman said. It enables companies to capture more data and gain insights more quickly, augment physical interactions with digital information and controls, and put intelligence where it needs to be, he said.

Some specific use cases such as autonomous vehicles or real-time predictive analytics require low latency and real-time analytics enabled by edge computing, said Michele Pelino, principal analyst at Forrester Research. Data can be processed locally before going to the cloud for additional analysis using artificial intelligence, she said.

Gartner research shows that edge computing has value in all industries, "although how it's used varies widely," Bittman said. "Whenever an enterprise has people or assets widely distributed, where interactions are taking place at the edge — shopping, assembling, collaborating, systems of all sorts — edge computing may make sense."

Sectors that are the most distributed or are asset-heavy are and will use edge computing the most, Bittman said. "Manufacturing, energy, retail, transportation and defense top the list," he said.

In manufacturing, a key use case of edge computing is for predictive maintenance to analyze and detect changes in equipment, machinery or operational processes before a failure occurs, Pelino said. "Edge computing brings data, analytics processing, and storage closer to the equipment to monitor machine health in real time," she said.

Other edge use cases in manufacturing include optimizing robotics, drones, or autonomous guided vehicles to complete key industrial operations functions, Pelino said.

Sectors that can benefit

Manufacturing and energy have the most data being created at the edge that can be used to automate systems, Bittman said. "Energy also has a more volatile power grid and the need for rapid reaction and predictive responses," he said. "Retail is highly distributed, with a need for agile local updates" on pricing, applications, sales, and automation.

Financial services is another sector that can benefit from edge computing, Pelino said. High-frequency trading and hedge fund firms can reduce latency by deploying on-premises edge servers placed as close to the trading floor as possible, to minimize latency or to reduce last-mile data delays between servers collocated at different exchanges. This enables maximum profits on high-volume, low-margin trades.

Among the biggest barriers to edge adoption are threats to data protection. "Security is often identified as the biggest barrier to edge computing deployment," Pelino said. "The diverse array of edge devices, use cases, and environments make it harder for firms to address security. This concern is exacerbated by the fact that attackers can gain access to edge environments via standard application flaws, network misconfigurations, insecure protocols, or physical access to the device itself."

Every new network connection, smart device, edge server, or micro data center is an attack surface for hackers, Pelino said.

"The optimal way to address security concerns is to implement a zero-trust edge architecture to bring networking and security together," starting on-premises with software defined wide area networks, firewalls, and stringent network access and ending with routing, secure web gateways, and cloud security gateways, Pelino said.

Smartphones created security challenges by extending the digital perimeter, Bittman said. "Edge computing is like the smartphone security challenge on steroids," he said.

All connections need to be secured, including between devices and edge computing nodes, and the backhaul to cloud. That includes encrypting data on devices, Bittman said. "And enterprises need to defend themselves in depth from possibly compromised edge devices, monitoring edge device behavior," he said.

Extending the digital perimeter outside the data center isn't easy and will require new cybersecurity methods and AI for behavior monitoring, Bittman noted.

Beyond security, companies can face other barriers to adoption of edge technologies.

One is navigating the fragmented vendor market for edge computing. "The edge computing landscape comprises a diverse set of technologies and solutions that, when managed together, address key business scenarios, workloads, and use cases," Pelino said.

"Because the edge landscape is so diverse, no single vendor will provide and support all technologies for any edge business scenario," Pelino said. "Vendor-to-vendor and vendor-to-enterprise partnerships are critical to creating a complete edge solution."

Another potential barrier is a lack of collaboration among IT and operational technology stakeholders.

"Often the many owners of edge use cases operate on an island with separate initiatives from the IT and OT teams," Pelino said. "Tech executives must break down these IT and OT silos."