Edge Data Centers Offer Benefits for Remote Industrial Apps

Edge data centers are poised to go from niche to mainstream in the coming years — and the growth should be explosive. According to global real estate consulting firm JLL, the global edge data center market will reach $317 billion by 2026. That’s more than double its 2020 value of $153 billion.

What’s driving the breakneck growth? It’s no news that Internet of Things (IoT) and AI advancements are plowing ahead and promising to revolutionize nearly everything they touch — but to follow through on those promises will take a whole new infrastructure. Specifically, supporting new IoT and AI applications will require faster data transfers, greater computing power, more secure and efficient data processing, and — above all — lower latency.

But some of you already knew that — even back in 2023, 41% of surveyed data center professionals told Data Center Dynamics they see low latency and high bandwidth as “the most important driver[s] for edge data center deployments.”

What Are Edge Data Centers?

Edge data centers aren’t a novel concept, nor are many edge computing use cases. So why is edge computing such a buzzword for 2025? And what do edge data centers promise to deliver that cloud data centers can’t?

Edge computing is a distributed computing model where data is processed closer to the source using smaller network devices, such as industrial controls, embedded devices, and even mobile phones.

Basically, by bringing data processing closer to the origin of data, edge data centers minimize the need to send data to faraway, centralized data centers. This means they can accelerate data processing speeds, trim bandwidth usage and reduce latency to power faster insights, and enable real-time decision-making.

Some are also trying to make the case that edge computing data centers are more sustainable than centralized cloud data centers. The idea is that their local data processing and storage is more efficient and reduces data traffic to the cloud, thereby reducing energy consumption.

The Promise for Remote Industrial Applications

Rising use cases and advancements in IoT and AI have set the stage for many conversations about the benefits of edge computing. With spiking demand for real-time processing and low latency, edge data centers offer clear advantages over their centralized cloud counterparts.

But IoT and AI talk aside, edge data centers have something else to offer: improved speed and reliability for remote industrial applications.

Consider manufacturing applications. Smart factories are replete with connected sensors, autonomous machinery, and other intelligent devices — all requiring massive amounts of data processing. Specifically, powering AI-driven automation and robotics for tasks like assembly and quality control requires instantaneous data analysis.

In many cases, cloud-based data processing that happens far away in centralized data centers is simply insufficient. Edge data centers, on the other hand, with local data processing that’s fast and reliable, are up to the task.

Another perk of edge computing’s faster speeds? Predictive maintenance.

Predictive maintenance plays an important role in smart manufacturing, alerting teams of equipment issues sooner rather than later so they can take action quickly to reduce downtime. Again, edge data centers’ lower latency makes the difference, enabling real-time anomaly detection for immediate responses.

Plus, because edge servers don’t rely on cloud-based data processing, they can ensure continuous uptime, even if cloud connectivity is lost. This is especially beneficial for factories in remote locations with limited network access.

But manufacturing is just one example of edge centers’ value for remote industrial applications.

Edge data centers’ improved speed and reliability also have profound implications for autonomous vehicles, smart city infrastructure, telecom, mining, and wind and solar energy farms, to name a few. In these mission-critical, high-stakes industries, responsiveness and reliability can make or break operations.

While centralized cloud data centers may be able to get the job done, their further distance, higher latency, and connectivity reliance introduce risks that can compromise operational performance, continuity, and safety.

More Edge Data Centers Coming

Considering the many advantages edge data centers bring to diverse industries, it’s no surprise we’re starting to see a scramble of edge data center infrastructure development.

Earlier this year, edge data center firm Sequitor Edge announced Sequitor Heartland, its new data center regional operating company, as part of its plans to “develop, build, and operate 18 advanced edge computing data centers,” as the company said in a press statement, across nine midwestern states in the next three years.

But Sequitor isn’t the only company going all in on edge data centers; in fact, JLL reports that 21% of all current data center development in the U.S. is happening in “edge geographies” (i.e., areas outside of traditional data center hubs, like Ashburn, Va., and Silicon Valley).

Meanwhile, in the Middle East and North Africa region, Saudi Arabia’s government is championing data center infrastructure development as part of its Vision 2030 initiative. Last month, Armada announced a partnership with Microsoft to deploy edge data centers in Saudi Arabia, while Tawal and 5SKYE together have plans to deploy 5G AI micro edge data centers there in the next year.

Challenges Ahead

While edge data centers are indeed poised to enable lower latency, faster data processing, and strong reliability for remote industrial applications, it’s not all going to be smooth sailing. After all, these industrial use cases are notoriously tricky for a reason.

Take 5G and utility applications, for example, where edge devices are exposed to harsh conditions, like intense heat and cold, high winds, rain, and sand. Now, entire edge data centers are being tasked with withstanding the same elements while still upholding consistent performance. This is in stark contrast to centralized data centers, whose controlled environments and accessible locations make for much easier maintenance and infrastructure management.

Finally, it’s simply a much bigger logistical task to build and manage edge data centers. Remember that edge data centers have a decentralized nature across many smaller network devices. While this is advantageous for improving latency and reliability, it also creates challenges to ensure consistent performance, deflect cybersecurity threats, and maintain cohesive management.

It’s Not All or Nothing

When you consider what edge data centers are doing to support remote industrial applications with faster speeds, lower latency, and greater reliability, it may seem like the future is fully edge — but that’s not really what’s happening.

Challenges remain in edge computing, pushing many companies to consider a hybrid approach that uses both edge and cloud computing to get the best of both worlds. Edge data centers will indeed rock the boat, but they won’t make cloud data centers obsolete — at least not any time soon.