In cloud computing, Edge Computing refers to the practice of processing data near the edge of your network, where the data is being generated, instead of in a centralized data-processing warehouse. Edge computing can reduce latency, as data doesn't have to traverse over a network to a data center or cloud for processing.

Edge Computing works by using edge devices, like IoT devices or edge servers, to process data. These devices can be located anywhere there is a network connection, and they process or store the data locally.

Only the necessary data is sent to the centralized network, reducing the amount of data that needs to be transmitted and the subsequent latency.

A manufacturing company uses IoT sensors on its factory floor to monitor equipment in real-time. Using edge computing, the data from these sensors can be processed on-site, allowing for real-time analytics and faster decision making.