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TBR projects CSP spend on edge compute infrastructure will grow at a 46.1% CAGR from 2020 to 2025 and reach $100B

Key Insights

The Big Nine hyperscalers will collectively outspend the combined outlays of telcos and cablecos on edge compute infrastructure before the middle of this decade.  

All Big Nine hyperscalers are investing in the edge in some way. Amazon, Microsoft and Google have global ambitions for edge, though and the hyperscalers intend to partner with and/or compete against telcos and cablecos in the edge space.

Delays in chipset availability — due to the COVID-19 pandemic, geopolitical factors and technological complexity — will slow the pace at which the vendor ecosystem can meet demand for edge compute infrastructure through at least 1H22.

TBR projects CSP spend on edge compute infrastructure will grow at a 46.1% CAGR from 2020 to 2025 and reach $100B

TBR’s Telecom Edge Compute Market Forecast, which is global in scope, details edge compute spending trends among communication service providers, which include telecom operators, cable operators and hyperscalers. This research includes current-year market sizing and a five-year forecast by multiple edge compute market segments and geographies. TBR’s Telecom Edge Compute Market Landscape, also global in scope, deep dives into the edge compute-related initiatives of stakeholders in the telecom market, including telecom operators, cable operators, hyperscalers and vendors that supply the telecom market.

The Big 9 will own and control the value chain in the digital era

The Big 9 will own and control the value chain in the digital era

Drivers and Investments

The Big Nine’s underlying goal is to provide a seamless, end-to-end digital experience to end users that will maximize webscales’ value capture in the digital era.

Webscales already own significant portions of long-haul transport, cloud data centers, SD-WAN and communications platforms globally, and TBR believes the next step will be for webscales to move into the mobile core and last mile of the network.

Webscales need access to network data, which they will obtain through partnerships with telcos or outright ownership of the network.

The webscale companies (hyperscalers or internet content providers) covered in TBR’s Webscale ICT Market Landscape invest in ICT and related digital infrastructure to drive their core businesses, which can include, but are not limited to, advertising, cloud services, e-commerce, financial services and media. In some cases, webscale companies will also invest in and provide telecommunications services, such as broadband access, to accelerate their digital businesses. This report focuses on the nine webscales (the Big Nine — Alibaba, Alphabet, Amazon, Apple, Baidu, Facebook, Microsoft, Rakuten, Tencent) that TBR believes will own the largest, most comprehensive end-to-end digital ecosystems in the digital era. Additionally, the report includes key findings, market size, customer adoption, operator positioning and strategies, geographic adoption, vendor positioning and strategies, and acquisition and alliance strategies and opportunities.

Big Nine are building digital ecosystems; cloud, connectivity, platforms and other initiatives all point to this end state

Big Nine build digital ecosystems; cloud, connectivity, platforms and other initiatives all point to this end state

Big Nine aim to own the foundational, intelligent innovation platforms of the digital economy

The Big Nine — Alibaba (NYSE: BABA), Alphabet (Nasdaq: GOOGL), Amazon (Nasdaq: AMZN), Apple (Nasdaq: AAPL), Baidu (Nasdaq: BIDU), Facebook (Nasdaq: FB), Microsoft (Nasdaq: MSFT), Rakuten and Tencent — view 5G and distributed computing as innovation platforms on top of which value will be created in the digital economy. The Big Nine are building “brains” in their central cloud environments that will autonomously orchestrate and manage the fundamental platforms upon which the digital economy will be built.

A recent example of this trend by the Big Nine to own the intelligence layer and build these platforms is seen in Microsoft’s recent actions, whereby the company acquired Affirmed Networks and Metaswitch (pending) and struck partnerships with ecosystem providers such as Federated Wireless to build out digital marketplaces that enable end users to consume network resources directly from the cloud.

The Webscale ICT Market Landscape includes key findings, market size, customer adoption, operator positioning and strategies, geographic adoption, vendor positioning and strategies, and acquisition and alliance strategies and opportunities.

The Big Nine are trailblazing paths to economic value of the digital era; incumbent players need to determine their roles

Big Nine aim to own the foundational, intelligent innovation platforms of the digital economy

The Big Nine — Alibaba (NYSE: BABA), Alphabet (Nasdaq: GOOGL), Amazon (Nasdaq: AMZN), Apple (Nasdaq: AAPL), Baidu (Nasdaq: BIDU), Facebook (Nasdaq: FB), Microsoft (Nasdaq: MSFT), Rakuten  and Tencent — view 5G and distributed computing as innovation platforms on top of which value will be created in the digital economy. The Big Nine are building “brains” in their central cloud environments that will autonomously orchestrate and manage the fundamental platforms upon which the digital economy will be built.

A recent example of this trend by the Big Nine to own the intelligence layer and build these platforms is seen in Microsoft’s recent actions, whereby the company acquired Affirmed Networks and Metaswitch (pending) and struck partnerships with ecosystem providers such as Federated Wireless to build out digital marketplaces that enable end users to consume network resources directly from the cloud.

Over time, webscales will become the centerpieces and backbones of the global digital economy and will enable the ecosystem, which includes communication service providers, to innovate and participate in the value creation of the digital economy.

The Webscale ICT Market Landscape includes key findings, market size, customer adoption, operator positioning and strategies, geographic adoption, vendor positioning and strategies, and acquisition and alliance strategies and opportunities.