Managed edge services are the next big growth area for public cloud providers, service providers and technology vendors. According to IDC, managed edge services will deliver worldwide revenues of about $445.3 million this year, which is a 43.5% increase over 2020. In addition, the analyst firm forecasts that managed services revenues will hit nearly $2.8 billion in 2025.
IDC says that public cloud providers will likely be the beneficiaries of this trend as will service providers and technology vendors. The company expects public cloud providers to form partnerships with 5G service providers so that they can provide enterprises with low-latency edge services to support new consumer applications, comply with data sovereignty and deal with security threats.
Further, IDC outlined what it believes are the three primary deployment models for managed edge services:
- On-premises deployment. This is where edge compute infrastructure is deployed at the enterprises’ premises. It provides extra low latency and works well with industrial use cases, healthcare and augmented and virtual reality applications. IDC estimate that this will be the fastest growing segment with a five-year CAGR of 74.5%
- Service provider edge deployment. This is where edge compute is deployed at the provider edge, both fixed and mobile. IDC expects this model to be used for a lot of vertical use cases. The analyst first also expects this will be the second-fastest growing segment but could become the largest market for managed edge services by 2022.
- CDN edge deployment. This is when edge compute is deployed at the CDN edge locations and is used to enhance content delivery.
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IDC says that managed edge services do provide significant opportunities for service providers that have already invested in edge compute but there are potential competitors such as network equipment provider, software and data center vendors that also want to play a significant role in the edge.
“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,” says Ghassan Abdo, research vice president, worldwide telecom, virtualization, and CDN at IDC.