Market update: Telecom server market to grow 19% CAGR over next 5 years

Analyst firm Dell’Oro has released its latest telecom server report, in which it has lowered its growth forecast compared to the October 2022 report due to, it said, “economic headwinds leading to reduced spending on mobile network infrastructure, challenges with the adoption of Open RAN and MEC, and a realization that our previous estimates for servers deployed for Operation Support Systems (OSS) and Business Support Systems (BSS) were overstated.”

The transition of telecom appliances to server-based architectures is still in its early stages, even when compared to the evolution of cloud computing, it said. Dell’Oro anticipates the telecom server market to experience a 19 per cent five-year compound annual growth rate (CAGR), reaching US$12.5 billion by 2027, slightly outpacing the overall data centre growth rate of 15 per cent.

It noted, “this adjustment comes as we’ve raised our projections for the data centre market, driven by increased investments in accelerated computing for artificial intelligence (AI) applications.”

The edge, projected to represent 45 per cent of telecom server revenue by 2027, promises resilience, efficiency, and immersive experiences, prompting vendors to compete for dominance in this evolving landscape, the company said.

In addition, it said, “we anticipate the implementation of AI at both the network core and edge. At the core, AI engines could be utilized to automate real-time and near-real-time decision-making based on raw data from internet traffic and allocate network resources in real-time dynamically. At the edge, new AI use cases, primarily related to computer vision, that could enable applications such as industrial automation, autonomous driving, security, and various consumer services.”

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Jim Love, Chief Content Officer, IT World Canada

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