Published on November 8, 2023, 11:25 pm

The anticipated growth in global edge server deployments is yet to come, according to ABI Research. Over the next five years, the firm expects a significant acceleration in edge server deployment, driven primarily by on-premises and carrier deployment. This will create a total addressable market for Edge Servers of US$18.99 billion by 2027, with a compound annual growth rate (CAGR) of 53.8%.

While enterprise on-premises edge deployment currently accounts for just 7% of global spending on edge servers, this segment is expected to expand aggressively over the forecast period. By 2027, it is projected to make up 55% of the market.

Several factors will contribute to this rapid acceleration over the next five years. The first factor is related to the maturity of edge hardware and software. Ongoing innovation is expected to lead to significant advancements in portability, energy efficiency, and performance guarantees. The second factor driving growth is the increased investment in digital transformation across different industries.

Supply chain and edge challenges such as interoperability, scalability, and portability have previously hindered edge server adoption. However, ABI Research predicts that these barriers will be overcome as vendors push forward. With sustained growth expected across each deployment segment, enterprise on-premises and carrier deployments are projected to drive most of the market’s growth, with CAGRs of 131.9% and 38.6%, respectively.

Data sovereignty legislation, particularly in Europe, is playing a crucial role in driving the adoption of edge servers. CTOs and CIOs are looking towards edge servers as a means of ensuring compliance with evolving regulations.

For carrier edge server growth, partnerships with hyperscalers will prove essential. Companies like AWS partnering with Verizon, Bell, and Vodafone or Microsoft Azure collaborating with Deutsche Telekom, BT Group, and Etisalat highlight this trend. These collaborations combine carrier infrastructure with hyperscaler cloud expertise to deploy value-added services and monetize existing infrastructure. ABI Research expects these partnerships to support significant growth, with edge server spending projected to rise from US$250 million to US$1.5 billion in 2027, with a CAGR of 43.6%.

Hyperscalers will also capitalize on their cloud expertise to expand their presence in the edge market. AWS Outpost, Azure Private Multi-access Edge Compute, and GCP’s network edge are expected to be expanded globally, with a focus on emerging regions. Additionally, Chinese giants are set to drive growth across the Asia Pacific region, positioning China as a global leader in edge deployments.

In conclusion, the future of edge server deployment looks promising. The anticipated acceleration in global deployment is driven by various factors such as innovation in edge hardware and software, increased investment in digital transformation, data sovereignty legislation, and strategic partnerships between carriers and hyperscalers. As businesses strive to leverage the advantages of edge computing, there will be significant opportunities for growth and innovation in the field of generative AI technologies.

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