How Micro Data Centers will play a key role in Edge Computing


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Edge computing is set to experience “explosive growth” in the coming years, according to a recent report. Verified Market Research has projected that the edge computing market — valued at $2.9 billion in 2020 — will reach $11.9 billion by 2028, growing at a compound annual growth rate (CAGR) of nearly 24 percent.

Edge computing, which brings computational capabilities closer to where data is being created, has become vital in IT infrastructures for making real-time decisions, particularly when a business needs to analyze large amounts of data with low latency. Indeed, according to the report, the growth of edge computing is being fueled by an increased demand for real-time data processing and the increasing adoption of Internet of Things (IoT) technologies.

Consider, for instance, self-driving cars, which are equipped with multiple sensors. Each sensor must capture and analyze information about its surroundings in order to help the car’s autonomous driving system make split-second decisions. Sending data from sensors back to the cloud or a regional data center for processing can interfere with timely decisions.

Edge computing, however, enables faster processing and reduces energy consumption, network congestion, and latency by moving data processing near to where data is generated. This decentralized approach is particularly relevant given the increased strain the proliferation of IoT has placed on cloud infrastructures. In fact, many companies are finding that cloud computing and centralized data centers are no longer effective due to latency and bandwidth issues.

The Intersection of Edge Computing and Micro Data Centers

Real-world use cases of edge computing are already all around us. But as the market continues to explode, micro data centers can play a unique role in supporting its capabilities. While the terms “micro data centers” and “edge computing” are often used interchangeably, they aren’t the same thing.

Edge computing is a technology or model that brings data processing and storage capabilities closer to the data source, so that businesses don’t have to rely on centralized data centers. A micro data center, however, is a type of data center that powers edge computing in a real-world setting. In other words, it’s the physical data center at the network’s edge that performs computation and storage.

Micro data centers are ideal for edge applications that require the real-time processing of vast amounts of data. They’re particularly beneficial for applications such as Industry 4.0, smart manufacturing, 5G, IoT, self-driving vehicles, smart cities, smart hospitals, robotics, drones, and more. By moving data processing and storage closer to its point of origin, the amount of time it takes for data to travel is significantly reduced. This ultimately results in lowered latency, faster response times, quick and deeper insights, and improved performance.

Furthermore, micro data centers address the data security concerns of many organizations by offering a more secure architecture that reduces the chance of compromise.

Given these benefits and more, it’s perhaps unsurprising to learn that the micro data center market is also set to experience significant growth in the coming years. One report estimates that the global micro data center market – which was estimated at $4.7 billion in 2022 – will reach $14.2 billion by 2030, growing at a compound annual growth rate (CAGR) of nearly 15 percent.

Furthermore, the report notes that IoT devices are expected to generate 79.4 zettabytes (ZB) of data by 2025, which will need to be processed, stored, and analyzed in real-time. Micro data centers positioned at the edge of the network can provide local computing power, storage, and analytics capabilities, which reduce the latency and bandwidth issues that arise when data is transmitted to a centralized data center.

The Bottom Line

Edge computing and micro data centers are on track to become the technology of the future. Indeed, tech research firm Gartner estimates that 75 percent of enterprise-generated data will be processed outside of the cloud or a traditional centralized data center by 2025. Micro data centers are likely to play a key role in the this evolution as they support the data processing capabilities needed for edge computing.