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The fog computing market size is estimated to grow by USD 4.08 billion at a CAGR of 70.51% between 2023 and 2028. The growth of the market is driven by key factors reshaping the technological landscape. The exponential increase in IoT devices fosters demand for fog computing solutions to process data efficiently. Additionally, the rising demand for decentralized cloud computing reduces latency in decision-making. Furthermore, optimizing network traffic for sustainable energy usage emerges as a critical factor, aligning with environmental sustainability goals. These factors underscore the importance of fog computing in addressing digital needs and driving market expansion. This market research and analysis report also includes information on the key market drivers, trends, and challenges during the forecast period.
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The Fog Computing Market is pivotal in the evolution of smart devices, smart grids, smart buildings, and smart cities by enabling real-time interactions and real-time computing capabilities. It supports automotive networks and software-defined networks for connected devices and smart connected vehicles (SCV), enhancing mobility and Internet of Things (IoT) integration. With the advent of 5G technology, fog computing optimizes Internet traffic management and facilitates efficient embedded computing solutions. The Fog computing market ecosystem, including OpenFog Consortium members and connectivity hardware providers, collaborates to enhance connected vehicles, edge devices, and self-driving cars capabilities. Key players like cloud providers and data security experts mitigate cyber threats in this dynamic landscape, ensuring robust fog computing adoption across various industries. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Rising demand for decentralized cloud computing to reduce latency in decision-making is the key factor driving the growth of the market. Cloud computing, being centralized, often suffers from high latency due to its geographically distributed infrastructure, making it less suitable for time-sensitive applications like autonomous vehicles and wearables, which necessitate rapid response times of less than 25 milliseconds (ms). Consequently, the quest for low network latencies in computational tasks remains a driving force behind the adoption of decentralized fog computing solutions.
In contrast to cloud servers, where data must traverse multiple network hops to reach devices, fog nodes are typically located just one step away from device nodes, such as routers or base stations, significantly reducing data transmission times. Additionally, market players are introducing fog computing solutions capable of autonomous operation without continuous internet connectivity, enabling users to expedite decision-making processes in critical applications. These advancements cater to industries leveraging augmented reality (AR) and Internet of Things (IoT) technologies, optimizing data analysis and reducing power consumption while enhancing overall efficiency.
The development of 5G telecommunication networks is one of the major market trends. Mobile communication technologies have come a long way since their inception and are increasingly used for a variety of applications beyond simple end-to-end voice and data transmission. Likewise, the advent of 5G telecommunications technology is anticipated to play an important role in driving the adoption of technology. 5G is supposed to enable low-latency, high-bandwidth communication between devices and networks, which will solve cellular connectivity issues in IoT devices.
Moreover, as 5G networks offer significantly better performance and lower power consumption than 4G networks, they are expected to become the enabler for large-scale, broadband IoT deployments, such as in enterprise and industrial automation. The addition of 5G networks is expected to entail data flows from hundreds to thousands of IoT devices and sensors, which will drive the need for solutions to handle large amounts of data. As a result, this is expected to fuel the growth of the market during the market forecast period.
Lack of standardization and performance inconsistency of solutions is a challenge that affects the market growth. Inconsistent performance when it comes to IoT embedded in components like RFID, barcodes, sensors, and devices, as well as the cloud and storage, is a big problem. These components are interconnected and help each other in completing a task. A delay in the performance of one of the components will affect the operation of the other components and lead to poor performance of IoT services.
Furthermore, the lack of standardization in an IoT solution increases suppliers' complexity. Fog computing will not work if the IoT ecosystem is not designed to the required technical standards. Architectural and engineering design flaws can further derail fog computation. Therefore, lack of standardization and inconsistent performance may limit the adoption of computer fog, thereby hindering the growth of the global computer fog market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Toshiba Corp.: The company offers OpenFog architecture that brings seamless intelligence from the cloud to IoT endpoints using an open standardized approach.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market share growth by the software segment will be significant during the forecast period. The software segment is driven by enterprise data privacy concerns among edge analytics service providers. Market players provide software solutions to organizations in various end-user industries, including insurance companies, government agencies, hospitals, and manufacturing.
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The software segment showed a gradual increase in the market share of USD 32.70 million in 2018. Top market players, such as Microsoft, SAP SE, SAS Institute Inc., and CGI Group Inc., provide cutting-edge, industry-specific analysis software. Companies are adopting advanced analytics solutions to manage and analyze such huge volumes of data. In addition, the shift to cloud technology and the development of AI and IoT due to the impact of the pandemic have had a positive impact on this segment and are also expected to boost the growth of the software segment in the market during the forecast period.
Fog Computing solutions are highly effective in improving power distribution operations. The rapidly evolving IoT landscape offers utility companies a number of technologies to monitor, manage, and control functions in a distributed infrastructure. Utilities, with regards to reducing operating costs and losses, are using IoT technology and fog computing to analyze distribution network resource usage and loss. Furthermore, the data received from a large number of sensors is first processed by a mesh fog controller to perform initial analysis and data decomposition; then only actionable information is sent to the utility core network. Hence, the growing demand for solutions in the utility industry is expected to drive the growth of this segment during the forecast period.
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North America is estimated to contribute 49% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The US and Canada represent two of the main growth markets in North America. Growing demand for big data analytics solutions and services is rising in the North American region. As different governments introduce pilot programs for their cities, IT companies have a great opportunity to deliver smart energy solutions, analytics solutions, data management solutions, and smart building environments.
Furthermore, growing investment in solutions is encouraging end-users to adopt IoT and automation solutions in various industries including manufacturing, telecommunications, transportation, and finance, which is one of the main drivers of the market in North America. The growth of the market in the region is further boosted by the exponential increase in the consumption of online audio/video content from streaming sites and games.
The market report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion " for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
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The market is revolutionizing industries like smart home storage, smart manufacturing, and smart city infrastructure by leveraging fog architecture for efficient decentralized computing. This market integrates high-speed data analytics and real-time analysis to support machine learning and artificial intelligence applications, enhancing information recovery and security measures against cyberattacks. Key to its growth is the adoption of IoT-enabled devices and IoT sensors in sectors like transportation systems and remote monitoring for energy efficiency and emission reduction. Collaborations among Open Fog Consortium members and connectivity solution providers drive innovations in fog computing platforms and customized application software, enabling IP video cameras, gateways, and microdata centers for robust data processing and network privacy. As the global fog computing market expands, hybrid IT infrastructures and cloud-based service models are poised to transform ERP models and cloud services across various sectors.
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Market Scope |
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Report Coverage |
Details |
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Page number |
196 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 70.51% |
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Market growth 2024-2028 |
USD 4.08 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
52.53 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 49% |
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Key countries |
US, Germany, China, UK, and Canada |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
ADLINK Technology Inc., Aikaan Labs, Amazon.com Inc., Arm Ltd., AT and T Inc., Atos SE, Cisco Systems Inc., Crosser Technologies, Dawn Acquisitions LLC, Dell Technologies Inc., General Electric Co., Hitachi Ltd., Intel Corp., International Business Machines Corp., Microsoft Corp., Schneider Electric SE, Telefonaktiebolaget LM Ericsson, Terawe Corp., Thoughtworks Holding Inc, and Toshiba Corp. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Component
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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