There will be nearly 2000 network edge data centres globally by 2028, STL Partners predicts
3 min read- STL Partners expects growing appetite for network edge data centre deployments, with a projected 22% CAGR over the next four years
- Telcos see the network edge as a pathway to improve return on their infrastructure investments
- The market will be driven by accelerated 5G standalone deployments and the rise in governmental support
- However, STL Partners does not expect AI to immediately speed up network edge rollouts
LONDON – 6 December 2024 – STL Partners expects there will be more than 1800 network edge data centres by 2028, growing at a compound annual growth rate (CAGR) of 22% over the four-year period.
In its latest market forecast, the analyst powerhouse suggests that accelerated 5G standalone (SA) deployments and the growing role of governments around the world in driving network edge rollouts, act as key driving forces for the market growth.
Telcos are adopting a pragmatic approach as they look to better monetise their existing infrastructure investments – and the network edge has provided a pathway to achieving this. This applies for mobile, fixed and converged operators.
For the first time in its observations of the market, STL Partners has tracked companies that are winding down their network edge propositions, having already built capacity. This is the case for AT&T (which had deployed two sites) and Cox Communications (which had deployed 30 sites).
Despite this, the research house’s outlook for the next four years remains positive.
Furthermore, STL Partners does not believe that the ambition of the AI-RAN Alliance to deploy AI services for customers using the same infrastructure currently used for radio access network (RAN) workloads will significantly accelerate network edge capacity in the immediate future.
“When it comes to edge AI, the network edge is like the ‘ugly duckling’, with other forms of edge computing deployment at current providing more attractive solutions for enterprises. For example, on-premise edge is playing a critical role in providing a secure and sovereign environment for enterprises to perform AI inference. Meanwhile, regional edge data centres are benefiting from the surge in demand for environments that can support AI model training”, explains George Glanville research analyst and author of the forecast.
He argues that the commercial proposition of the network edge, at current, is less clear, given that most AI use cases today do not have highly stringent latency requirements, and enterprises need to pay a significant premium to deploy workloads in these environments (in contrast to the cloud).
“It is only when wide-area AI use cases with stringent latency demands emerge that the network edge will truly spread its wings and fly”, Glanville claims. This is the case for many connected car and smart city use cases.
Find out more insights from STL Partners’ forecast by downloading an extract here.
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