Next Generation Computing Market Size, Share & Industry Analysis, By Component (Hardware, Software, and Services), By Type (Quantum Computing, Edge Computing, High-Performance Computing (HPC), Cloud Computing, and Others), By Deployment (On-premises and Cloud), By Industry (Healthcare and Life Sciences, BFSI, IT & Telecom, Government, Energy & Utilities, Manufacturing, and Others), and Regional Forecast, 2024-2032

The global next generation computing market size was valued at USD 133.76 billion in 2023. The market is projected to grow from USD 160.97 billion in 2024 to USD 809.71 billion by 2032, exhibiting a CAGR of 22.4% during the forecast period.

Next generation computing involves the creation and improvement of hardware, software, and computational methodologies to solve problems related to reliability, data processing speed, security, and efficiency. As computing and storage demands continue to rise, research institutes, governments, and businesses are increasingly exploring advanced computing methods. These methods include high-performance computing (HPC), edge computing, quantum computing, and optical computing.

The next generation computing market growth is largely due to the rapid progress in quantum computing and edge computing, the expansion of the Internet of Things (IoT), and the continuous evolution of software and hardware technologies. Out of these next generation computing technologies, quantum computing is considered the most promising due to its ability to process vast amounts of data much faster than traditional computing methods.

For instance,

• November 2022: IBM unveiled a new 400 Qubit-Plus Quantum Processor and a edge Next Generation Computing IBM Quantum System. These innovations mark a significant milestone in quantum hardware, paving the way for a revolutionary era of quantum-centric supercomputing.

The COVID-19 pandemic led to a significant increase in the usage of cloud services worldwide, creating growth opportunities for major players in the advanced computing market. According to the Flexera 2020 State of Cloud report, 27% of business leaders reported a significant rise in cloud spending during the pandemic. Moreover, various computing hardware providers launched new next generation computing products to discover potential treatments for the pandemic.

• May 2020: NVIDIA Corporation launched a new graphics processor that specializes in executing data-intensive tasks related to scientific simulation, genomics, and AI training.

GENERATIVE AI IMPACT

Integration of Generative AI Capabilities across Emerging Computing Tools to Aid Market Growth

Generative AI has profoundly impacted next generation computing technologies, particularly in the domains of cloud computing, edge computing, quantum computing, and high-performance computing (HPC), with significant implications for SMEs. In cloud computing, generative AI has revolutionized data processing and analysis, enabling SMEs to efficiently leverage scalable resources for complex computations. Through advanced algorithms, generative AI enhances data analytics, predictive modelling, and pattern recognition, empowering both SMEs and large enterprises with actionable insights and streamlined operations.

Edge computing has also witnessed remarkable advancements due to generative AI, enabling devices to process data locally and make real-time decisions, reducing latency, and enhancing efficiency for both SMEs and large enterprises. This capability is crucial for enterprises operating in environments where real-time data processing is critical, such as IoT devices and industrial automation.

• February 2024: EY and Dell Technologies launched the EY Edge Technologies Lab to accelerate the value of data, enabling companies to leverage edge technologies for real-time insights. The lab demonstrated how Generative AI reduces manual effort, creates prototypes, and improves data integration efficiency, aiding in digital transformation.

Next Generation Computing Market Trends

Rising Digital Transformation and Industry 5.0 Initiatives to Boost the Integration of Next Generation Computing Technologies

The integration of next generation computing technologies is becoming a prominent trend, driven by the widespread adoption of digital transformation strategies and the emergence of Industry 5.0 initiatives. Businesses are increasingly recognizing the strategic value of advanced computing solutions, such as quantum computing, generative AI, and edge computing in enhancing operational efficiency, driving innovation, and gaining a competitive edge in the market.

Digital transformation efforts are fueling the demand for next-gen computing technologies, as businesses seek to leverage data-driven insights, automation, and intelligent decision-making to optimize processes and offerings. Quantum computing, with its ability to process vast amounts of data and perform complex calculations exponentially faster than classical computers, is poised to revolutionize industries ranging from finance to healthcare. Similarly, AI and edge computing technologies are enabling businesses to extract valuable insights from data in real-time, improving operational efficiency and customer experiences.

• In November 2023, Nokia unveiled its "2030 Technology Strategy," aiming to guide organizations in preparing for upcoming technological shifts. The strategy highlighted AI as a central focus and included trends such as the API economy, cloud continuum, metaverse, and Industry 5.0. It emphasized the integration of humans and machines to create value and drive the adoption of emerging technologies for future challenges.

Next Generation Computing Market Growth Factors

Growing Interest and Investments from Governments and Industries to Increase Innovations in Quantum Computing

Governments and industries are increasingly focusing on advancing quantum computing, recognizing its potential to revolutionize computing capabilities. Governments worldwide are investing significantly in initiatives such as the U.S. National Quantum Initiative to accelerate research and development in quantum information science and technology. This heightened governmental interest is catalyzing increased private sector investments in quantum computing, driven by the recognition of its potential to solve complex problems in fields such as finance, healthcare, and materials science.

• In February 2024, The U.K. government allocated USD 57 million to advance quantum computing, aiming to create a "quantum-enabled economy" by 2033. This investment included USD 38 million for developing novel quantum computers and USD 19 million for the Quantum Catalyst Fund, supporting public sector projects aimed at solving practical problems.

Collaborations between governments, industries, and academia are fostering a robust ecosystem for quantum research and development, driving advancements in quantum algorithms, hardware, and software. This determined effort is expected to accelerate the commercialization of quantum computing and usher in a new era of technological innovation across several sectors.

RESTRAINING FACTORS

Higher Initial Investments and Compatibility Issues with Existing IT Systems to Hamper Market Growth

The next-generation computing market faces significant challenges, primarily due to higher initial investment requirements and compatibility issues with existing IT systems. The adoption of next-gen computing technologies often demands substantial upfront investments, including hardware, software, and training costs. These financial requirements can pose a barrier for many organizations, particularly small and medium-sized enterprises (SMEs). This higher initial investment deters potential adopters from exploring next-gen computing solutions, limiting market growth.

Additionally, compatibility issues with existing IT systems pose a significant restraint to the growth of the next-gen computing market. Integrating new technologies with legacy systems can be complex and costly, requiring additional resources and expertise. Compatibility issues leads in inefficiencies, data silos, and potential disruptions to business operations, further hindering the adoption of next-gen computing solutions. Addressing these challenges requires careful planning, investment, and collaboration between technology providers and businesses to ensure seamless integration and maximize the benefits of next-gen computing technologies.

Next Generation Computing Market Segmentation Analysis

By Component Analysis

Hardware Segment Held the Highest Market Share due to Rising Demand for Powerful Computing Hardware

Based on component, the market is divided into hardware, software, and services.

In 2023, the hardware segment held the highest market share. Commonly used computing hardware includes GPUs, CPUs, advanced processors, quantum processors, and AI accelerators, among others. As businesses continue to digitize their operations, the need for powerful computing hardware is increasing rapidly. Additionally, the demand for powerful computing hardware is growing due to the increasing number of AI applications that require such hardware to execute AI programs.

The software offering is expected to experience the highest CAGR in the forecast period, owing to rise in number of startups around the world and heavy investments by major players in R&D activities related to computing technologies. The market is growing due to factors such as technology companies investing more in research and development and the need to handle large amounts of data. Additionally, the adoption of technologies such as 5G, Artificial Intelligence (AI), and Machine Learning (ML) presents great opportunities for growth.

By Type Analysis

Cloud Computing Segment Led owing to Better Agility and Lower Cost of Deployment

Based on type, the market is segmented into quantum computing, edge computing, high-performance computing (HPC), cloud computing, and others.

Cloud computing dominated the global next-generation computing market share in 2023. This is due to its many advantages, such as agility, cost efficiency, disaster recovery, and scalability. The pay-as-you-go model of cloud computing, is particularly useful in helping organizations to decrease infrastructure costs. Among the prominent technologies in next-generation cloud computing are distributed cloud, serverless computing, multi-cloud, green cloud computing, and database-as-a-service.

Edge computing is expected to experience significant growth over the forecast period with a highest CAGR. Hardware edge vendors are consistently boosting their investments in edge computing worldwide. As an example, HPE has allocated approximately USD 4 billion over a span of four years to improve their already released Edgeline Converged Edge Systems, a device for edge computing. Moreover, rising production of IoT-connected devices around the world, is positively impacting the demand for next generation computing technologies.

• Recent research indicates that global IoT connections increased by 18% in 2022 to 14.3 Bn active endpoints. In 2023, the number of connected IoT devices rose by 16% to 16.7 Bn active endpoints, and it is projected to exceed 29 Bn IoT connections by 2027.

By Deployment Analysis

Cloud Segment to Dominate the Market due to Advancements in Quantum Computing

By deployment, the market has been classified into the on-premises and cloud.

The cloud deployments are expected to witness a highest growth rate during the forecast period. Cloud-based deployments allows organizations to scale their resources up or down as per their requirements. Google, Microsoft, IBM, and Amazon are utilizing cloud computing to develop cloud quantum computers for better computing technology. Currently, IBM offers free access to their 5-qubit machine for all users. IBM has recently introduced a 17-qubit quantum computer in the cloud.

The on-premises deployment model captured a significant market share in 2023. This model offers better data security and compliance for various industries. Additionally, organizations gain better control over their software, hardware, and data.

By Industry Analysis

IT & Telecom Segment Led owing to Rapid Progress in IT & Telecom Sector

Based on industry, the market is segmented into healthcare and life sciences, BFSI, IT & telecom, government, energy & utilities, manufacturing, and others.

The IT & telecom sector held the majority market share in 2023. The substantial advancements in 5G technology, AI, and ML, quantum computing, and cloud computing are shaping the future of the IT & telecom industry. The IT & telecom industry is in need of next-generation computing technology to stay ahead in the market. This has led to their increasing dominance as they continue to innovate.

• In July 2023, HCLTech and Microsoft collaborated to launch HPC solutions, leveraging HCLTech's engineering services and Microsoft's Azure cloud HPC technologies. The partnership aimed to train 3,000 professionals and establish a dedicated lab for early-stage R&D in HPC solutions.

The healthcare and life sciences industry is likely to grow with the highest CAGR over the forecast period. Edge computing, a new technological advancement, is revolutionizing the industry by enabling telehealth and robotic surgery in distant locations. The demand for better organization-wide data management, reduced operational costs, and automated workflows are expected to drive the industry's growth during the forecast period. Digital technology has the potential to cut administrative costs, which account for approximately one quarter of the nearly USD 4 trillion annually spent on healthcare in the U.S., according to Salesforce data.

REGIONAL INSIGHTS

The global market scope is classified across five regions, namely North America, South America, Europe, Middle East & Africa, and Asia Pacific.

In 2023, the North American market held the highest market share. The rising demand for advanced AI and cloud computing-based platforms, coupled with the rapid adoption of the AI technology across the North American countries are driving the region's next generation computing market growth. According to industry experts, in 2023, global investment in the AI technology reached USD 154 billion, an increase of 26.9% from 2022, with spending on AI-centric systems expected to surpass USD 300 billion in 2026. The U.S. has largest investors owing to robust AI technologies infrastructure and favorable government strategies and funding.

• In April 2023, Ernst & Young Global Limited partnered with IBM quantum network to investigate answers for difficult business issues. With this collaboration, EY will be able to use IBM's quantum computers via the cloud.

The Asia Pacific next generation computing market is expected to experience the highest CAGR in the market, owing to the growing cloud adoption, government initiatives, and IoT expansion. This region includes some of the major tech hubs, such as China, South Korea, India, and Japan, attracting both global and local investments.

• In January 2024, Mitsui & Co., Ltd. invested USD 50 million in Quantinuum, a top quantum computing company. The investment would help Quantinuum develop the first universal fault-tolerant quantum computers and expand their quantum software products.

Moreover, the Europe next generation computing market share is driven by the expansion of industry 4.0 and IoT. Europe's market growth is due to increased investments in machine learning and AI, alongside the widespread use of high-performance computing in industries such as healthcare and automotive. The European Union collaborates with research organizations, universities, and institutes to drive technological progress. For instance,

• In November 2022, the European Union and the Indian government agreed to work together on high-performance computing projects, using supercomputers from both regions. They will focus on bio-molecular medicines, climate change, natural disasters, and quantum computing.

The Middle East & Africa and South America regions are experiencing continuous growth as governments and major financial institutions are spending heavily on digital transformation and computing technologies.

List of Key Companies in Next Generation Computing Market

Companies Focus on Acquisitions and Partnerships to Gain Competitive Edge

Key players operating in the market are Microsoft Corporation, Oracle Corporation, Alibaba Group Holding Limited, NVIDIA Corporation, Amazon Web Services, Inc., and others. These companies aim to engage in new product launches, partnership, mergers, and acquisitions activities to expand their business and geographical presence. For instance,

• In July 2023, HCLTech and Microsoft collaborated to launch HPC solutions, leveraging HCLTech's engineering services and Microsoft's Azure cloud HPC technologies. The partnership aimed to train 3,000 professionals and establish a dedicated lab for early-stage R&D in HPC solutions. 

List of Key Companies Profiled:

• Microsoft Corporation (U.S.)


• Alphabet, Inc. (U.S.)


• Alibaba Group Holding Limited (China)


• Oracle Corporation (U.S.)


• Amazon Web Services, Inc. (U.S.)


• Cisco Systems Inc. (U.S.)


• Intel Corporation (U.S.)


• NVIDIA Corporation (U.S.)


• IBM Corporation (U.S.)


• Hewlett Packard Enterprise Company (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• March 2024 – SAP and NVIDIA expanded their partnership to accelerate the adoption of generative AI across SAP's cloud applications and solutions. This collaboration integrated scalable, business-specific generative AI abilities inside the SAP ecosystem, leveraging NVIDIA's AI expertise.


• February 2024 – Wipro and Nokia launched a 5G private wireless solution for enterprises, aimed at supporting digital transformation. The joint solution included Nokia's Digital Automation Cloud and Modular Private Wireless solutions, along with Wipro's 5G Def-i platforms, targeting industries such as manufacturing, energy, utilities, and transportation.


• February 2024 – Accenture acquired Mindcurv, a cloud-native data analytics and digital experience company, specializing in composable software, commerce services, and digital engineering. This acquisition expanded Accenture Song's commerce services for clients worldwide.


• October 2023 – PureHealth, the leading healthcare platform in the Middle East, introduced a cloud platform called PureNet, for digital healthcare services. The PureNet platform, utilizing cutting-edge cloud computing technologies, links healthcare providers to streamline and digitize their operations affordably.


• June 2023 – IQM Quantum Computers, a quantum computing company, partnered with Beyond Limits, an AI software company, to advance quantum AI technology in Asia-Pacific, boosting the market in the region.  

REPORT COVERAGE

The research report includes prominent regions across the globe to get a better knowledge of the industry. Furthermore, it provides insights into the most recent industry trends and an analysis of technologies that are being adopted quickly on a global scale. It also emphasizes on the market’s drivers and restrictions, allowing the reader to obtain a thorough understanding of the industry.

REPORT SCOPE & SEGMENTATION

ATTRIBUTE	DETAILS
Study Period	2019 – 2032
Base Year	2023
Estimated Year	2024
Forecast Period	2024 – 2032
Historical Period	2019 – 2022
Growth Rate	CAGR of 22.4% from 2024 to 2032
Unit	Value (USD billion)
Segmentation	By Component Hardware Software Services By Type Quantum Computing Edge Computing High-Performance Computing (HPC) Cloud Computing Others (Optical Computing and Nano Computing) By Deployment On-premises Cloud By Industry Healthcare and Life Sciences BFSI IT & Telecom Government Energy & Utilities Manufacturing Others (Chemical and Retail) By Region North America (By Type, By Application, and By Country) U.S. (By Industry) Canada (By Industry) Mexico (By Industry) South America (By Type, By Application, and By Country) Brazil (By Industry) Argentina (By Industry) Rest of South America Europe (By Type, By Application, and By Country) U.K. (By Industry) Germany (By Industry) France (By Industry) Italy (By Industry) Spain (By Industry) Russia (By Industry) Benelux (By Industry) Nordics (By Industry) Rest of Europe Middle East & Africa (By Type, By Application, and By Country) Turkey (By Industry) Israel (By Industry) GCC (By Industry) North Africa (By Industry) South Africa (By Industry) Rest of Middle East & Africa Asia Pacific (By Type, By Application, and By Country) China (By Industry) India (By Industry) Japan (By Industry) South Korea (By Industry) ASEAN (By Industry) Oceania (By Industry) Rest of Asia Pacific