Software-Defined Data Center Market Analysis by Component (Network Virtualization, Server Virtualization, Storage Virtualization); Enterprise Size {Large Enterprise, Small & Medium Enterprises }; Industry (IT & Telecom, BFSI, Government, Energy & Utilities, Retail & E-Commerce, Manufacturing, Healthcare) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
Buy Now Report ID: 4922 | Published Date: May 02, 2023
Software-Defined Data Center Market size is estimated to reach ~USD 1007.19 Billion by the end of 2035 by growing at a CAGR of ~25.40% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of the software-defined data center market was ~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.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~25.40% |
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Base Year Market Size (2022) |
~ USD 66.61 Billion |
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Forecast Year Market Size (2035) |
~ USD 1007.19 Billion |
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Regional Scope |
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Growth Drivers
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.
Challenges
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.
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 software-defined data center market includes the following segments:
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By Component |
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By Enterprise Size |
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By Industry |
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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.
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.
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.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Abhishek Verma, Hetal Singh
Ans: 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.
Ans: 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.
Ans: 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.
Ans: 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.
Ans: 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.
Ans: 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.
Ans: The market is segmented by component, enterprise size, industry, and by region.
Ans: The SMEs segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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