ABI Research expects significant acceleration, led predominantly by on-premises and carrier deployment, creating an edge server total addressable market of US$18.99 billion by 2027, a CAGR of 53.8%. Enterprise on-premises edge deployment is expected to expand aggressively over the forecast period, expanding to 55% by 2027, up from a mere 7% in 2022.
“This huge acceleration over the next five years will result from several factors. The first is related to edge hardware and software maturity,” explains Reece Hayden, distributed and edge computing analyst at ABI Research.
"On-going innovation will likely lead to large strides in portability, energy efficiency, and performance guarantees. The second is the accelerated investment in digital transformation across verticals."
Reece Hayden
Challenges ahead
Supply chain and edge challenges (interoperability, scalability, portability) have slowed edge server adoption. However, as vendors look to push past these barriers. ABI Research expects to see sustained growth across each deployment segment. Growth over this period will be mainly driven by enterprise on-premises and carrier deployment, with CAGRs of 131.9% and 38.6%, respectively.
Hayden states, “Although digital transformation strategies have been around for a while, especially in manufacturing/retail, more innovative, customer-focused use cases (e.g., augmented/virtual reality) are beginning to reach new verticals which will further drive edge server deployment.”
Notably, data sovereignty legislation is being pushed to the front – especially in Europe. CTOs and CIOs will look to edge servers as a means through which they can comply with new, ever-changing legislation.
Competitive landscape/ecosystem
Carrier edge server growth will be heavily supported by hyperscaler partnerships. The market is active, from AWS’ partnerships with Verizon, Bell, and Vodafone, to Microsoft Azure’s with Deutsche Telekom, BT Group, Etisalat.
These partnerships, which mesh carrier infrastructure with hyper scaler cloud expertise, aim to deploy value-add services to monetize the existing infrastructure. ABI Research expects these partnerships to support significant growth, with edge server spending rising from US$250 million to US$1.5 billion in 2027 (CAGR of 43.6%).
On top of partnerships with carriers, hyperscalers will use their cloud expertise to double down on the edge market. ABI Research expects that AWS Outpost, Azure Private Multi-access Edge Compute, and GCP’s network edge will be expanded globally with significant growth in emerging regions.
"In addition, Chinese giants will accelerate growth across the Asia Pacific region, with China becoming a global leader in edge deployments," concludes Hayden.
