Enterprise On-Premises and Carrier Deployment to Create an Edge Server Total Addressable Market of Almost US$19 Billion by 2027

Enterprise on-premises and carrier deployment will support a rapid acceleration in global edge server deployment with Europe and China bypassing North America’s total spend by 2027
22 Mar 2023

Anticipated growth in global edge server deployments is yet to come. Still, over the next five years, global technology intelligence firm 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. In 2022, this segment accounted for as little as 7% of global spend on edge servers; however, by 2027, this segment will have expanded to 55%.

“This huge acceleration over the next five years will result from several factors. The first is related to edge hardware and software maturity. 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,” explains Reece Hayden, Distributed and Edge Computing Analyst at ABI Research.

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.

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.  Hayden concludes, “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.”

These findings are from ABI Research’s Distributed and Edge Computing market data report. This report is part of the company’s Distributed and Edge Computing research service, which includes research, data, and ABI Insights. Market Data spreadsheets comprise deep data, market share analysis, and highly segmented, service-specific forecasts to provide detailed insight into where opportunities lie.

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