Demand Grows For Edge Data Centers and Edge Computing

by Michael Rareshide, on Feb 21, 2018 11:26:03 AM

Edge computing and edge data centers remain a hot category in data center site selection, which will continue into 2018 and beyond. With consumers’ massive appetite for video streaming sites like Netflix and mobile gaming sites like HQ Trivia, the need for edge data centers has grown markedly over the past five years. 

The edge computing market is expected to surge from $1.5 billion in 2017 to $6.7 billion in 2022, at a compound annual growth rate of 35%, according to a recent report by research firm MarketsandMarkets. Our changing economy and way of life drives this growth, from increased adoption of artificial intelligence, augmented reality, food delivery services, driverless vehicles, and mapping apps to name a few.

Consumer demand for high bandwidth services and business demand for high capacity needs such as the Internet of Things (IoT) are just some of the primary drivers impacting demand for edge data centers. Other industries that see the benefit to edge data centers include retail, manufacturing, healthcare and financial firms. 

While defining the concept of the edge may sometimes have a broad definition, it generally means locating IT power geographically close to the end user, so that the user does not encounter latency and network congestion. The goal is to keep the heaviest and most latency-sensitive traffic at the network edge, where processing is quick and responsive. The equipment that communicates with these devices needs to live closer to the ultimate user to be most effective. While fast Internet is available in major cities as Chicago, Manhattan and Los Angeles, it is just as important to be quick in smaller centers such as Des Moines, Boise and El Paso. 

How data center operators and colocators address the need for the ‘edge’

Moving certain data center operations to the edge of established networks is an important strategy for many cloud-based companies. Trying to meet the demand for such edge-centric content runs counter to the predominant geographic architecture of the data center and colocation business model. Historically, the operator model targeted the top 10 Tier 1 tech hubs in the US — home to plenty of customers, carrier hotels, data center farms and established business communities. These “hubs” did not have very many of the “spokes” required in edge computing, but that is changing.

The challenge of market expansion in edge geographies has created an opportunity for niche edge providers to meet the quickly increasing demand, albeit in a smaller market. The edge data center creates an interconnection ecosystem in cities away from the traditional core markets. 

The competitive environment in edge data centers is also increasing. Telecom companies are have realized the potential for edge services and are actively marketing their sites since they already have the in-place footprint. Windstream and Frontier are companies deploying their facilities for cloud demand so they can provide extremely fast speeds at a much more local level.

Companies such as TierPoint, Flexential (formerly Peak 10), Cologix, 365 Data Centers and EdgeConneX have strategies to pursue Tier 2 markets such as Minneapolis, Nashville, Pittsburgh, Omaha, Richmond and Lehigh Valley.  By doing so, they avoid the “data center as commodity” in the Top 10 data center markets, while securing a loyal customer in a less competitive environment. They can also help cloud companies deploy in multiple sites quickly. Such quality edge data center providers are positioned to offer better performance at a lower cost at the edge than traditional centralized data center providers. 

Three other edg” data center competitors are enjoying success by deploying smaller data center versions. Vapor IO has developed its self-contained prefabricated “all in one” micro modular data center with integrated cooling, power and IT space, designed for multitenant and remote operations. Vapor IO also has its Vapor Chamber allowing for fast deployment of up to 135 KW in a small racking system.

EdgeMicro is a startup with plans to roll out up to 500 factory-built data center modules over the next four years at cell tower sites across the country. The containerized six-rack micro data center can support 48kW of IT capacity and features biometric security, redundant power and cooling and fire suppression.

DartPoints is building a national network of micro data centers in a repeatable design. The company is tailoring its design to both small to medium-sized businesses needing expansion and to carriers that will need to expand their wireless infrastructure to support 5G broadband services.

What does the future hold for edge data centers?

As the Internet and cloud services penetrate every corner of the global economy, data must reach new populations where consumers are demanding it. As we have seen the competitive landscape heat up with new investors, providers and innovative solutions, the edge data center market will continue to see increased capacity to keep up the consumer’s burgeoning demand.

Topics:Economic DevelopmentData CenterSite Selection GroupSite Selection



Blog Posts →


News →


Success Stories →