Edge Gateways, Industrial PCs & Embedded OT Servers: Critical Enablement Platforms for Edge Solutions

Inside this Report

The edge domain has become the focal point for enterprise innovation and solution differentiation across operational technology (OT) environments. The space has undergone a dramatic evolution over the past couple of years driven by widespread advances in embedded processing, software architecture, workload acceleration, wireless connectivity, and application enablement. Consequently, there has been a rapid increase in edge system capabilities and value derived from deploying more sophisticated computing infrastructure in the field closer to data sources. The edge hardware platform market continues to carry strong momentum as a result, supporting the development of intelligent solutions and services worldwide and across industries.

This market research report analyzes the global market for edge gateways, industrial PCs (IPCs), and embedded/OEM OT servers. Supported by research interviews with dozens of leading suppliers and large-scale surveys of engineering organizations, this report features extensive market sizing as well as a deep investigation into key regional and vertical market trends, the competitive landscape, and demand-side findings.

What Questions are Addressed?

• How are edge computing and connectivity platforms evolving to support modern industry solution architectures and application services?
• Which vertical market segments feature the greatest opportunities for edge gateways, IPCs, and embedded OT servers?
• What impact is edge AI having on the design and solution integration of edge systems hardware?
• Who are the leading suppliers of edge systems hardware and how does the competitive landscape compare and contrast between device types?
• What are the most important product features and capabilities for commercial edge platforms?

Who Should Read this Report?

This report was written for those making critical decisions regarding product, market, channel, and competitive strategy and tactics. This report is intended for senior decision-makers who are developing, or are a part of the ecosystem of, IoT, embedded, and/or edge computing solutions, including:

• CEO or other C-level executives
• Corporate development and M&A teams
• Marketing executives
• Business development and sales leaders
• Product development/strategy leaders
• Channel management/strategy leaders

Technology Providers in this Research

• ADLINK Technology
• Advantech
• AIS
• AMD
• ARBOR Technology
• Arm
• Avalue Technology
• B&R Automation (ABB)
• BAE Systems
• Beckhoff Automation
• CalAmp
• Cisco Systems
• Dell Technologies
• Digi International
• Emerson
• GDMS
• HPE
• Huawei
• IEI Integration
• Intel
• Itron
• Lantronix
• Lenovo
• Mercury Systems
• Moxa
• NXP
• OnLogic
• Qualcomm
• Penguin Solutions
• Schneider Electric
• Semtech
• Siemens
• Supermicro Computer and others

Demand-side Research Overview

VDC launches numerous surveys of the IoT and embedded engineering ecosystem every year using an online survey platform. To support this research, VDC leverages its in-house panel of more than 30,000 individuals from various roles and industries across the world. Our global Voice of the Engineer survey recently captured insights from a total of 600 qualified respondents. This survey was used to inform our insight into key trends, preferences, and predictions within the engineering community.

Executive Summary

The edge data estate is the setting for reaching new heights for intelligent automation and data utility. Enterprise solution and service providers worldwide are forming new business models and strategies to target the edge space. Their goal is to enable the development of innovative solution capabilities and data-driven offerings. The rampant growth in connected field devices and infrastructure is opening opportunities for the next stage of digitalization. Edge gateways, IPCs, and OT servers play instrumental roles in this transformation by connecting, filtering, analyzing, and acting on application data. Dedicated edge hardware solutions are needed to support growing data volumes and the maturation of edge use cases. This is especially true for deployments incorporating AI/ML, real-time computing, computer vision, or other high-value functions across a fragmented OT landscape.

Edge hardware platforms themselves have been evolving for decades and have greatly benefited from recent advances in embedded processing and other component technologies. Intelligent gateways, for example, are the fastest-growing edge system device type having surpassed the M2M gateways segment years ago, supporting edge processing and decision-making to drive savings in operating costs and reduce cloud dependency. Edge system suppliers and integrators now have more semiconductor options than ever. These options meet a range of performance-per-watt and pricing requirements, and many come with configurations that feature integrated or add-on workload accelerators. However, hardware is now only part of the equation. Software tooling, lifecycle management, and ecosystem compatibility are now equally important.

The edge system landscape is highly fragmented in its composition of form factors, device supplier types, partnership ecosystems, regulatory oversight, customer requirements, and go-to-market models. Demand varies significantly by region, vertical market, and associated needs for ruggedization or certification compliance. Nonetheless, the edge hardware market will feature strong revenue and unit growth through the end of the decade carried by strong demand across a variety of sectors.

Key Findings

• The edge systems market, comprising gateways, IPCs, and embedded OT servers, totaled more than $31B in 2024 worldwide and is expected to reach more than $50B in 2029.
• Average selling prices of edge systems vary widely across device types, with simpler M2M gateways typically costing a few hundred dollars while most OT servers cost several thousand dollars.
• Demand for edge system platforms spans almost all vertical segments, with each device type featuring different hotspots for growth among automotive/fleet, energy, healthcare, industrial automation, telecom, transportation, and other leading edge hardware industries.
• The differences between regional shipments and manufacturing origin are particularly stark for edge gateways, with an outsized portion of devices created in Asia-Pacific and shipped to end users elsewhere; the IPC and OT server markets are much closer in regional deliveries and production.
• VDC's Voice of the Engineer survey results highlight a variety of preferences for the development and evaluation of edge hardware platforms, with application performance and enablement elements often topping the charts for selection criteria.

Report Excerpt

The edge computing space is delivering unprecedented solution value for enterprises in all industries and of all sizes worldwide. Smaller companies rely on edge platform innovation to bring powerful products to market faster. Larger companies with established customer bases are looking to differentiate themselves by adding edge processing, networking, and analytics capabilities to their arsenal. Strong demand is also driven by the limitations and costs of on-premises and cloud computing. The edge market is by no means set to overcome these sectors in revenue size anytime soon, but it is a crucial architectural element for industry computing solutions and services in all sectors.

Deploying more intelligent on-premises data gathering, filtering, analytics, and management helps contend with escalating solution requirements for low latency, data privacy, and edge AI applications. Edge computing applications today focus on areas with clear needs and proven ROI. The edge is still not a broadly commoditized market, largely because each deployment requires significant customer-specific integration and support. While edge computing capabilities are being designed into end market infrastructure and devices by OEMs and integrators, there is still a broad need for dedicated edge systems such as edge gateways, industrial PCs, and OT servers.

Overall, end users are looking to reduce their dependency on the cloud or on-premises datacenter infrastructure for their sprawling data estates. Standalone edge gateways, IPCs, and OT servers have for many years already served as powerful hardware platforms for optimizing data flow and utility. These systems play a critical role in balancing computing and networking loads against various constraints. They help manage associated costs and challenges related to device integration, power limitations, physical and cybersecurity hardening, and data management.

Scope & Methodology

Scope

VDC defines the "edge" as the layer of compute in between target embedded/IoT devices in the operational technology field (IoT Things), and a centralized cloud/IT/enterprise infrastructure, either on premise or in the cloud, that stores and acts on large volumes of data to form an end-to-end industry solution. Edge systems are deployed to enable distributed and dedicated data collection, processing, and networking for connected industry solutions and services. Edge devices range from relatively simple M2M gateways to industrial PCs and OT servers processing application data locally.

Methodology

VDC produces its forecasts from a combination of primary and secondary data, including its own surveys and in-depth interviews with OEMs and industry executives; internal historical data sets and market models; public and privately disclosed numbers from vendors and customers, industry organizations, trade publications, and conferences; and our analysts' extensive base of industry experience and knowledge.

In this report, we size the merchant market for embedded OT server hardware, which is supplied to external OEMs and integrators for the development of in-field, operational products and solutions. It does not include the captive portion of the market, which includes server systems designed and built internally at OEMs solely for internal use or integration into their own larger systems or end products.

The edge hardware market sizing estimates and forecasts are based on a combination of: (1) VDC's longstanding expertise and ongoing coverage of the total market opportunity for merchant processors, boards, modules, and integrated systems; (2) frequently updated engineering survey data from product development organizations designing, building, deploying, and managing edge computing and connectivity solutions; (3) in-depth interviews with decision-makers at OEMs and other embedded technology customers; and (4) regular discussions with embedded and edge technology providers and broader ecosystem participants.