Software-Defined Data Center Market Size & Share, by Component (Network Virtualization, Server Virtualization, Storage Virtualization); Organization (Large Enterprise, SMEs); End-user (IT & Telecom, BFSI, Government, Energy & Utilities, Retail & E-Commerce, Manufacturing, Healthcare) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2023-2035

  • Report ID: 4922
  • Published Date: May 02, 2023
  • Report Format: PDF, PPT

Global Market Size, Forecast, and Trend Highlights Over 2023-2035

Software-Defined Data Center Market size is expected to surpass USD 1007.19 billion by the end of 2035, growing at a CAGR of 25.40% during the forecast period, i.e., 2023-2035. In the year 2022, the industry size of software-defined data center was over USD 66.61 billion. The growth of the market can be attributed to the rise in the adoption of the Internet of Things (IoT) worldwide together with the rising need for software-defined networking (SDN) to control the network in a unified manner using rule-based management. As per findings, there were nearly 13 billion IoT-connected devices in 2022, and that number is expected to almost double to approximately 26 billion by 2030. Hence, with software-defined DCN envisioned to address the heterogeneity and application-specific requirements of IoT in the context of DCN, the market is anticipated to grow with the increasing number of IoT-connected devices worldwide.

In addition to these, factors that are believed to fuel the market growth of software-defined data centers include the increasing development of hybrid cloud applications together with the expansion of the software-defined storage portfolio by some of the market key players. For instance, IBM Corporation in October 2022, announced the addition of Red Hat storage product roadmaps and Red Hat associate teams to the IBM Storage business unit, to bring consistent application and data storage across on-premises infrastructure and cloud. Moreover, the increasing emphasis and importance of infrastructure consistency, application agility, IT management, and flexible consumption consistency are further anticipated to boost the growth of the SDDC market.

Software-Defined Data Center Market
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Software-Defined Data Center Sector: Growth Drivers and Challenges

Growth Drivers

  • Expanding Popularity of Data Centers – which is depicted by their increasing number. It was observed that in 2022, there were more than 8,000 data centers in the world. Moreover, as in a software-defined data center, all elements of the infrastructure viz, networking, storage, CPU, and security are virtualized and delivered as a service, these data centers are gaining more popularity over traditional data centers. Since the entire provisioning and operation of the infrastructure are driven by software, they provide cost efficiency and enhanced agility and productivity. All these factors are anticipated to propel the market growth over the forecast period.
  • Increasing Adoption of Cost-Effective Business Models - By pooling infrastructure resources, standardizing management tools across infrastructure layers, and enabling policy-driven provisioning, an SDDC enables IT groups to retain control over provisioning, reduce costs and establish a path to application modernization. It was observed that the operational expenditure (OPEX) of SDDC was almost 50% lower than that of traditional data centers whereas the IT productivity of companies using SDDC rose by 65%.
  • Rising Adoption of Cloud Storage Architecture – as per findings, by 2025, ~60% of infrastructure and operations (I&O) leaders worldwide are anticipated to implement at least one of the hybrid cloud storage architectures, which is a significant rise from 20% in 2022. This approach is expected to unlock bi-directional application and data mobility based on a shared, secure, and cloud-scale software-defined storage foundation, indirectly leading the market growth.
  • Growing Valuation of SaaS Companies Worldwide – for instance, it was found that the median valuation for a public SaaS company is 15x forward revenue in 2023.


  • Lack of a universally accepted virtualization standard for networks – is anticipated to hamper the market growth as to create software-defined environments, organizations will need to rethink universally accepted standards and adapt many IT processes accordingly. These may include automation, metering, billing, executing service delivery, service activation, and service assurance. Moreover, as all these factors depend on highly complex processes, issues like failing legacy applications in cases where they are just dropped in without accounting for parameters like latency, suitability to a distributed architecture, and fault tolerance at the application level can also become a deterrent.
  • Lack of strong IT infrastructure
  • Concern about data privacy

Software-Defined Data Center Market: Key Insights

Base Year


Forecast Year




Base Year Market Size (2022)

~ USD 66.61 Billion

Forecast Year Market Size (2035)

~ USD 1007.19 Billion

Regional Scope

  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)
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Software-Defined Data Center Segmentation

Enterprise size (Large Enterprise, SMEs)

The global software-defined data center market is segmented and analyzed for demand and supply by enterprise size into large enterprises, and small & medium enterprises (SMEs). Out of the two enterprise sizes of the software-defined data centers, the SME segment is estimated to gain the largest market share of about ~64% in the year 2035. The growth of the segment can be attributed to the surge in the number of SMEs globally owing to favorable government initiatives as well as the increasing trend of start-up businesses worldwide. For instance, it was found that there were around 330 million SMEs globally in 2020, a small increase from approximately 325 million in 2019.

Industry (IT & Telecom, BFSI, Government, Energy & Utilities, Retail & E-Commerce, Manufacturing, Healthcare)

The global software-defined data center market is also segmented and analyzed for demand and supply by industry into IT and telecom, BFSI, government, energy & utilities, retail & e-commerce, manufacturing, healthcare, and others. Amongst these segments, the IT & telecom segment is expected to garner a significant share of around ~40% in the year 2035. The growth of the segment can be attributed to the rapid development of the IT & telecom sector owing to rising digitalization worldwide together with the adoption of the various latest communication technologies such as 5G. For instance, as per estimations the investment in digital transformation worldwide is expected to almost double between the years 2022 to the year 2025 from nearly USD 1.8 trillion to around USD 2.8 trillion.

On the other hand, the BFSI segment is projected to witness a massive CAGR during the forecast period, owing to the rising adoption of cloud strategy to improve scalability, agility, and data security. This, as a result, is anticipated to create numerous opportunities for the growth of the segment in the coming years.

Our in-depth analysis of the global market includes the following segments:

     By Component

  • Network Virtualization
  • Server Virtualization
  • Storage Virtualization  

     By Enterprise Size

  • Large Enterprise
  • Small & Medium Enterprises (SMEs)

     By Industry

  • IT and Telecom
  • BFSI
  • Government
  • Energy & Utilities
  • Retail & E-Commerce
  • Manufacturing
  • Healthcare
  • Others

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Software-Defined Data Center Industry - Regional Synopsis

North American Market Forecast

The market share of software-defined data centers in North America, amongst the market in all the other regions, is projected to be the largest with a share of about ~37% by the end of 2035. The growth of the market can be attributed majorly to the presence of giant software companies as well the rising investment to develop the IT infrastructure together with rising investment in computers and software besides the growing development of software with automated storage with a tremendous focus on hardware cost reductions. As per recent data of 2023, as per predictions, the overall value for private investment in computers & software is anticipated to hit ~USD 1274 billion in the United States by the year-end.

Europe Market Forecast

The European software-defined data center market is estimated to be the second largest, registering a share of about ~23% by the end of 2035. The growth of the market can be attributed majorly to the radically evolving IT landscape in the region with the increasing number of organizations using software-defined data centers in order to increase IT agility besides reducing IT infrastructure complexity. Moreover, the growing investment by big software companies in the evolution of virtualization, container, and cloud services in the region is further anticipated to boost the market growth in the region.

APAC Market Statistics

Further, the market in the Asia Pacific, amongst the market in all the other regions, is projected to hold a majority of the share by the end of 2035. The increasing number of data centers owing to various supporting economic conditions, such as tax benefits, favorable legislation for data centers, and good data privacy and protection rules in emerging economies such as China, India, and other developing nations of the region are boosting the growth of the software-defined data center market in the Asia Pacific region.

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Software-Defined Data Center Market Size
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Companies Dominating the Software-Defined Data Center Landscape

    • VMware, Inc.
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • Microsoft Corporation
    • Dell Inc.
    • Hewlett Packard Enterprise Development LP
    • Juniper Networks, Inc.
    • Citrix Systems, Inc.
    • Oracle Corporation
    • IBM Corporation
    • Cisco Systems, Inc.
    • Huawei Technologies Co., Ltd.
    • Fujitsu Limited


In The News

  • VMware, Inc. announced new innovations across the VMware Cloud Provider Platform that will help cloud providers further expand their business opportunities in the new application economy. It is anticipated to enable cloud providers to deliver industrialized hybrid clouds to customers from any location including customer data centers, cloud provider data centers, VMware Cloud on AWS as a managed service, and hyperscale public clouds.
  • Microsoft Corporation and London Stock Exchange Group (LSEG) entered into a long-term strategic partnership to architect LSEG’s data infrastructure using the Microsoft Cloud, and to jointly develop new products and services for data and analytics.

Author Credits:  Abhishek Verma, Hetal Singh

  • Report ID: 4922
  • Published Date: May 02, 2023
  • Report Format: PDF, PPT

Frequently Asked Questions (FAQ)

The increasing number of IoT connected devices as well as the expansion of software-defined storage portfolio by major players are the major factors driving the market growth.

The market size of software-defined data center is anticipated to attain a CAGR of 25.40% over the forecast period, i.e., 2023-2035.

The lack of a universally accepted virtualization standard for networks as well as the lack of required IT infrastructure globally are estimated to be the growth hindering factors for the market expansion.

The market in the North American region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.

The major players in the market are VMware, Inc., Microsoft Corporation, Dell Inc., Hewlett Packard Enterprise Development LP, Juniper Networks, Inc., Citrix Systems, Inc., Oracle Corporation, IBM Corporation, Cisco Systems, Inc., Huawei Technologies Co., Ltd., Fujitsu Limited.

The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.

The market is segmented by component, enterprise size, industry, and by region.

The SMEs segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
Software-Defined Data Center Market Report Scope

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