NEXT GENERATION COMPUTING MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)
The global next generation computing market is estimated to be valued at USD 168.57 Bn in 2024 and is expected to reach USD 602.34 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 19.9% from 2024 to 2031.
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The adoption of advanced computing technologies across various industries for applications such as artificial intelligence, machine learning, and cloud computing is driving significant growth in the market.
Rising need for real-time data processing and analysis
With the exponential growth of data in today's digital era, the ability to process huge amounts of data in real-time has become crucial. Across industry verticals, there is a massive amount of data being generated on a daily basis from sources such as customer transactions, sensor data, mobile users, and much more. However, processing such large, complex datasets and deriving useful insights from them in real-time presents significant challenges. Traditional computing solutions are struggling to keep up with the data deluge. There is a pressing need among organizations to gain real-time visibility into their business operations and take prompt actions based on insights.
For manufacturers, it allows predicting equipment failures in advance and optimizing supply chain operations. Retailers can improve customer experience through personalized recommendations and promotions delivered just-in-time. Autonomous vehicles require processing massive amounts of sensor data on the go for safe navigation. In healthcare, real-time analysis of patient data helps detect anomalies and provide quick diagnoses. Governments too are leveraging real-time insights for efficient resource allocation and emergency response. With 5G networks enhancing connectivity, more organizations are looking to capitalize on the benefits of real-time data-driven decision making.
However, existing computing architectures struggle with the speed, scale, and complexity of real-time data processing workloads. Traditional processors and cloud infrastructures are overwhelmed with huge data volumes generated at the edge. Moving all this data to centralized cloud for analysis increases latency and delays timely actions. Moreover, extracting insights from multimodal and unstructured data like images, videos and text requires more sophisticated computing capabilities. These issues have led to increased focus on developing next generation computing technologies that can seamlessly bridge the gap between data creation and processing for enabling truly real-time insights. The growing demand for ubiquitous real-time analytics represents a massive driver for investments and advancement in next generation high performance and parallel computing solutions.
For instance, in June 2023, Moody's Corporation, a global integrated risk assessment firm, and Microsoft announced a strategic partnership aimed at co-developing next-generation data, analytics, research, collaboration, and risk solutions for the financial services sector. This collaboration seeks to improve insights into corporate intelligence and risk assessment by utilizing Microsoft's Azure OpenAI Service, Microsoft Fabric, and Microsoft Teams, in conjunction with Moody's proprietary data, analytics, and research.
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Advancements in quantum computing and neuromorphic computing
The limitations of conventional computing architectures in tackling complex problems requiring massive parallelism have stimulated research in alternative computing paradigms. Two promising areas that have witnessed significant breakthroughs are quantum computing and neuromorphic computing inspired by neural architectures in the human brain. Quantum computing leverages the principles of quantum mechanics like superposition and entanglement to exponentially boost computational power. It holds potential to deliver breakthroughs in optimization, machine learning, and material simulation problems that are intractable even for the fastest supercomputers today.
On the other hand, neuromorphic computing aims to achieve extreme levels of parallelism, robustness and low power consumption by mimicking the neural structure of the brain. Researchers are exploring new computing devices, architectures and algorithms that function more like a brain rather than traditional computers. Their asynchronous, event-based characteristics are suited for real-time analysis of sensor data as well as cognitive workloads involving pattern recognition, control decisions and sensory processing. Early applications demonstrated include object recognition, control systems, and cognitive assistants.
Both quantum and neuromorphic computing represent a paradigm shift from conventional computing models. While the technologies are still in their nascent stage, steady progress is being made to scale up capacities and capabilities. Governments see them as an opportunity to gain strategic advantage and are investing heavily in related R&D programs. Large technology giants are also investing billions to be at the forefront of these futuristic technologies. As quantum and neuromorphic systems starts delivering commercially viable solutions in the next 5-10 years, they are likely to disrupt several domains and drive newer market opportunities. The transformational potential of these advanced computing models is fueling significant hype and increasing expectations worldwide.
Key Takeaways from Analyst:
The global next generation computing market is poised to grow significantly over the coming years due to increasing demand for faster data processing across different industry verticals. 5G deployment and rising adoption of advanced technologies like edge computing, IoT, and artificial intelligence are the major drivers propelling the need for more powerful computing solutions. At the same time, costs associated with R&D of next generation chips and platforms may limit growth to some extent in the short-term.
North America, with its large technological investments, is expected to continue dominating the next generation computing landscape during the forecast period. However, Asia Pacific is likely to emerge as the fastest growing regional market thanks to rising digital transformation initiatives and rapidly expanding 5G infrastructure in countries such as China and South Korea.
Next generation architectures including quantum computing and photonic chips are opening up new opportunities for players in this space. Adoption of neuromorphic computing platforms is also gathering pace among major organizations for solving complex problems involving pattern recognition and machine learning. Meanwhile, the demand for arm-based servers and new memory technologies are opening new frontiers for innovation.
This young but rapidly evolving market is witnessing intense competition among technology behemoths to gain early-mover advantage.
Market Challenge - Complexity of implementing and integrating next-generation computing solutions
The global next generation computing market is facing significant challenges in implementing and integrating new technologies due to its complex nature. Next generation computing solutions such as quantum computing, edge computing, 5G, and IoT technologies require sophisticated hardware and software that are highly technical and difficult to develop. The different components and subsystems involved in next generation systems often use different protocols, programming languages, and interfaces, making integration a major roadblock. Establishing connectivity between these diverse and complex systems in a seamless manner is a task that requires substantial investments of time and resources. Moreover, the maintenance and upgradation of such intricate solutions poses serious technical hurdles. The lack of standards also adds to the complexity and hinders interconnectivity. Resolving issues of compatibility and ensuring smooth interoperability between complex next generation solutions is challenging. Overall, overcoming the high degree of complexity involved in the development, deployment and management of such advanced computing platforms is a key hindrance for wider adoption.
Market Opportunity - Growing demand for edge computing and mobile next-generation computing
The global next generation computing market is presented with tremendous opportunities driven by the rising demand for edge and mobile computing solutions. Factors such as the proliferation of IoT devices, huge growth in mobile internet users, increasing need for real-time analytics, and the requirement of processing massive data sets with very low latency are fueling the adoption of edge and mobile next-generation computing platforms. Edge and mobile computing brings data processing and storage closer to the endpoint devices, offering benefits such as reduced bandwidth usage, lower latency, improved security and operational efficiency. Numerous industries including manufacturing, healthcare, transportation, retail, and entertainment have already started deploying edge and mobile infrastructure. Considering the widespread applications across different sectors, the edge and mobile next-generation computing segment is expected to experience exponential growth in the coming years. This presents significant opportunities for vendors to expand their customer base and drive higher revenues.
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Insights By Technology - Quantum Supremacy Drives Quantum Computing Adoption
In terms of technology, quantum computing is expected to contribute 35.1% share of the market in 2024 owing to the remarkable advancements being achieved with this novel computing approach. Quantum computing harnesses the principles of quantum mechanics in order to vastly surpass the limitations of classical computing. While classical bits can only hold the values of 0 or 1, quantum bits or "qubits" can exist in superpositions of both states simultaneously. This allows quantum computers to evaluate all possible solutions to a problem simultaneously, instead of sequentially like classical computers.
The past few years have seen tremendous progress in building larger and more error-corrected quantum computers. In 2019, Google announced that its quantum processor Sycamore was able to perform a calculation in 200 seconds that would take the fastest supercomputer today around 10,000 years. This marked a historic milestone known as "quantum supremacy" and demonstrated the immense computational power that can be unlocked through quantum effects. It has spurred significant investments from governments, tech giants and startups seeking to be at the forefront of this emerging field.
Countries like the U.S., China, and the EU have launched ambitious national quantum programs with billions in funding. Companies like IBM, Intel, Microsoft, Google, and Rigetti are developing new quantum hardware and algorithms. Startups like IonQ, D-Wave and Quantum Circuits are commercializing early quantum systems. The achievement of quantum supremacy has galvanized the field and accelerated progress towards building more powerful quantum computers in the coming years. As reliability and scalability improve, quantum computing is expected to find myriad industrial applications across healthcare, finance, energy, materials, and others. Its potential to tackle otherwise intractable problems continues to drive intense research and development efforts propelling the quantum computing segment.
Insights By Application - AI and Machine Learning Ubiquity Fuels the Cryptography and Cybersecurity Demand
In terms of application, artificial intelligence and machine learning is expected to contribute 31.5% share of the market in 2024 due to its widespread usage across numerous industries. With AI and machine learning being integrated into critical systems and vast amounts of sensitive data being generated every day, cybersecurity has become more crucial than ever. Advanced cryptographic techniques are needed to protect networked infrastructure and data from bad actors exploiting vulnerabilities.
As AI/ML models become larger, more complex and process ever-growing datasets, traditional encryption methods are facing challenges in terms of scalability, performance and adaptability. Post-quantum cryptography aims to develop new public-key algorithms that are secure against both quantum and classical computers. Researchers are exploring approaches based on lattices, codes, multivariate quadratic equations and isogenies of supersingular elliptic curves. Efforts are also underway to enhance neural network confidential computing using encryption techniques like homomorphic encryption that allow computation on encrypted data.
Meanwhile, AI/ML is increasingly employed in cyber defense systems for tasks such as malware detection, network monitoring, risk analysis and digital forensics. Machine learning algorithms can analyze large datasets to identify unusual patterns that may indicate cyber threats. This growing dependence on AI technologies for both offense and defense in the cyber realm substantially drives advancements in next-gen computing areas of cryptanalysis, trusted computing and AI security.
Insights By End User - Healthcare Demand Catalyzes Molecular Computing Growth
In terms of end user, the IT and telecommunication segment is expected to contribute 42.7% share of the market in 2024. However, the healthcare industry is emerging as a major driving force, especially for molecular computing techniques. Molecular computing employs biomolecules like DNA/RNA and proteins as building blocks to encode and process information. It aims to develop fundamentally new types of systems that could far surpass digital computers in areas like parallelism, miniaturization and energy-efficiency.
In healthcare, molecular computing shows promise for applications like early disease diagnosis, precision medicine, drug discovery and personalized therapeutics. By leveraging the incredible information storage and parallel processing capabilities of molecules, it may enable accurate disease detection from scarce biological samples as well as high-throughput screening against patient-specific genetic profiles. Synthetic biology approaches also seek to program bacteria and viruses to sense environmental conditions and release drugs as desired.
The massive healthcare data volumes and computational needs are catalyzing research to harness nature's highly parallel molecular machinery. Growing demand for individualized medical interventions is driving the need to miniaturize diagnostic tools and therapeutic systems. Molecular medicine's dependency on efficiently analyzing large biomolecular datasets further fuels the development of molecular computers and hybrid digital-molecular platforms. The transformative impact for healthcare applications has the potential to radically shift market demand towards molecular computing approaches in the long-run.
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North America has established itself as the dominant region in the global next generation computing market. The region is expected to hold 37.9% of the market share in 2024. The presence of major industry players from the U.S. such as Intel, Microsoft, IBM, NVIDIA, and AMD has given the region an edge. These companies control a large share of the processor, server, and networking markets which forms the foundation for next generation technologies such as Cloud computing, Quantum computing, AI, and Blockchain. Moreover, the rising demand from sectors like automotive, manufacturing, healthcare for next generation technologies is fueling the market growth. The large IT spending across enterprises is also benefiting the suppliers of next generation systems in the region. The pricing of these solutions, especially servers and cloud-based platforms, are highly competitive owing to the presence of global brands. This is attracting more clients and expanding usage of next generation computing models.
The Asia Pacific region is poised to be the fastest growing market over the next five years. Countries like China, Japan, India, and South Korea are rapidly adopting next generation technologies. This is due to growing economy, increasing digitization, rising income levels, and urbanization rate that is propelling IT investments. China is emerging as an upcoming leader in this space with the backing of government initiatives for technology innovation and manufacturing facilities of international tech firms. The exports of computer hardware from the Asia Pacific nations to developed markets is witnessing a surge. However, the high import duties on certain components in a few nations is somewhat restricting the pricing of finished goods, thereby slowing the short-term revenue growth prospects of global brands in some APAC countries.
Next Generation Computing Market Report Coverage
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2023 | Market Size in 2024: | US$ 168.57 Bn |
| Historical Data for: | 2019 To 2023 | Forecast Period: | 2024 To 2031 |
| Forecast Period 2024 to 2031 CAGR: | 19.9% | 2031 Value Projection: | US$ 602.34 Bn |
| Geographies covered: |
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| Companies covered: |
Amazon Web Services (AWS), Alphabet Inc. (Google), AMD (Advanced Micro Devices, Inc.), Apple Inc., IBM Corporation, Intel Corporation, Microsoft Corporation, NVIDIA Corporation, Oracle Corporation, Qualcomm Incorporated, Samsung Electronics Co., Ltd., SAP SE, Supermicro Computer, Inc., Tencent Holdings Limited, and Texas Instruments Incorporated |
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| Restraints & Challenges: |
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*Definition: The global next generation computing market consists of companies involved in developing innovative new computing technologies that go beyond existing platforms and represent major advances compared to today's systems. This includes developments in quantum computing, digital intelligence, digital convergence, cloud/edge computing and advanced architectures like neuromorphic computing that aim to achieve new levels of performance to solve complex problems.
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About Author
Monica Shevgan is a Senior Management Consultant. She holds over 13 years of experience in market research and business consulting with expertise in Information and Communication Technology space. With a track record of delivering high quality insights that inform strategic decision making, she is dedicated to helping organizations achieve their business objectives. She has successfully authored and mentored numerous projects across various sectors, including advanced technologies, engineering, and transportation.
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