Enterprise Edge Compute Market Landscape

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Healthcare, industrial and consumer goods respondents have the highest rates of edge computing technology adoption

Modern edge computing use cases remain a relatively new concept for the majority of organizations, although they are gaining popularity as 36% of respondents indicate their organization is currently using edge technology compared to 29% in 2023. However, the majority of respondents plan to deploy edge solutions in the future or observe edge use cases in their industry.
 
Seventy-eight percent (78%) of respondents in the healthcare and industrial verticals either plan to use or currently use edge computing.
 
Consumer goods respondents also have a keen interest in edge computing, which may be driven by use cases at brick-and-mortar locations and the emergence of packaged solutions for retail.
 

 

GenAI will not have a significant impact on enterprise edge market growth, at least in the near term, as customers prioritize their investments in the IT core and cloud

Forecast assumptions

TBR continues to revise its enterprise edge forecast to account for changes in the traditional IT and cloud markets, including the advent of generative AI (GenAI). Although the enterprise edge market benefited from the hype surrounding AI in 2024, many pilot projects may not enter production and more concrete use cases around edge AI need to be developed.
 
The enterprise edge market is estimated to grow at a 19.9% CAGR from 2024 to 2029, surpassing $144 billion by 2029. Professional and managed services will remain the fastest-growing segment, followed by software, at estimated CAGRs of 22.4% and 19.3%, respectively.
 

Given customers’ preference for first migrating to the public cloud and then extending data out to the edge for certain use cases, AWS has a compelling reason to consolidate its edge portfolio

TBR assessment

The evolution of networking bandwidth, maturity of Amazon Web Services’ (AWS) public cloud services, and overall strategic shift around GenAI have AWS reevaluating some aspects of its edge portfolio. In November 2024 the cloud giant discontinued three generations of Snowball edge devices for both storage and compute, forcing customers to look for alternative data migration solutions like DataSync and Direct Connect. AWS also announced that the Fleet Hub feature of AWS IoT Device Management will reach end of life in October 2025. In our view, these discontinuations, particularly for the Snow family of hardware, are a big reaffirmation of customers’ preference for extending the public cloud to the edge as opposed to taking an “edge-native” approach. We have long discussed how the hyperscalers are encroaching on the edge opportunity, and customers appear to be overwhelmingly initiating online migrations to the cloud and using native services, such as AWS DataSync, to move data from the cloud to edge environments. That said, expanding the company’s IaaS footprint, through offerings like Outposts and Local Zones to support customers’ cloud-to-edge strategies, is still very much a focus for AWS.

Recent developments

• In late 2024 AWS announced Satellite Resiliency for AWS Outposts, a managed solution backed by partners like Accenture, Capgemini, Deloitte, Kyndryl and Tata Consultancy Services (TCS), that connects Outposts to commercial satellites. This solution greatly expands the reach of where AWS services can be consumed, and helps enable local data processing while supporting connectivity in the event of outages or network disruptions.
• NetApp announced it is bringing its ONTAP storage arrays to AWS Outposts. This means customers that leverage either AWS Outpost servers or racks can manage and provision NetApp storage solutions directly via the AWS Management Console.
• Customers can now use different storage classes including S3 Express One Zone and S3 One Zone-Infrequent Access in AWS Dedicated Local Zone environments. These storage classes are designed to accommodate specific data perimeters and support customers’ data residency use cases.

Key strategies

• Offer the broadest set of infrastructure options with Local Zones and Wavelength Zones to appeal to customers looking to run their applications with millisecond latencies to mobile devices and/or end users.
• Integrate security offerings, such as Identity and Access Management, with networking offerings to drive adoption.
• Work with ISVs to expand availability of edge solutions on the AWS Marketplace.