The global Edge data center market will hit a valuation of $317 billion by 2026, according to a report from real estate consulting firm JLL.

JLL notes that a surge in data-dependent technologies, including AI and the Internet of Things (IoT), will drive the market growth, which can be supported by Edge data centers.

It represents a growth of 107 percent from the 2020 market valued at $153bn.

Edge data centers are smaller data centers located closer to the Edge of the network, designed to process and analyze data in real-time providing businesses with faster decision-making and more efficient operations.

“Consumers and corporations will continue to adapt to transformational technologies within daily life and without the distribution of data processing and storage across various locations, cutting edge efficiencies and solutions like IoT and generative AI will not transition to mainstream acceptance,” said Jonathan Kinsey, EMEA Lead and global chair, data center solutions, JLL.

“Edge data centers will be essential to ensure both seamless business operations in the future economy while also improving security measures and protecting against potential disruptions. By lowering latency by bringing the computing infrastructure closer to the data source and user, Edge IT infrastructure will become an essential component in the international economy.”

JLL notes that the rise of Edge IT infrastructure focused on data centers will mirror the growth of IoT devices, which JLL analysis projects will expand at a compound annual growth rate (CAGR) of 9.8 percent over the next five years.

The report cites the demand for technology that requires low latency, high computing, and generative AI as reasons for the projected growth in value of the market.

In the US, 21 percent of data center development is taking place in Edge geographies.

It adds that the Asia Pacific (APAC) and the Middle East North Africa (MENA) regions will take advantage of opportunities in the Edge data center market.

The Edge data center market is made up of Edge data center-focused companies such as Liberty Global and Digital Bridge JV AtlasEdge, which operates more than 100 Edge data centers across Europe.

Mobile carriers including Deutsche Telekom have also deployed Edge data centers. Earlier this month, the telco launched a 5G network and Edge data center at a Volkswagen port terminal in Emden, Germany.

Other Edge providers focused on containerized solutions include the likes of Flexnode, Datapod, Siemens Gamesa, and Mitsubishi Heavy Industries.

Many hyperscalers also have Edge offerings.

Tower companies have also hedged their bets on Edge data center deployments, notably American Tower and SBA Communications.