Software-Defined Data Center Market Size By Solution (Software-Defined Compute (SDC) [Hardware, Software, Services {Managed Services, Professional Services}], Software-Defined Networking (SDN) [Hardware, Software, Services {Managed Services, Professional Services}], Software-Defined Storage (SDS) [Hardware, Software, Services {Managed Services, Professional Services}]), By Organization Size (SMEs, Large Enterprises) By End-Use (Enterprise [BFSI, Government, Healthcare, Manufacturing, IT Enabled Services (ITeS), Retail & E-Commerce], Telecom Service Providers, Cloud Service Providers), Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2020 – 2026

Industry Trends

Software-Defined Data Center Market size surpassed USD 40 billion in 2019 and is poised to grow at over 26% CAGR between 2019 and 2026.
 

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Software-defined data center (SDDC) refers to the virtualization of data center operations in which a software layer is applied over the physical IT infrastructure. It is an IT facility, where infrastructure components, such as security, storage, networking, and processing, are virtualized and delivered as a service. The abstraction layer automates and simplifies the control, management, and provisioning of the IT infrastructure. It is expected to substantially lower the risks & costs associated with data center infrastructure while enhancing efficiency and quality of service.
 

Growing demand among end-user organizations to reduce capital expenditure by simplifying the data center footprint is proliferating industry growth. The technology streamlines and automates data center operations, aiding the drive operational efficiency of the end-user firms. Rapid adoption of advanced technologies, such as cloud, IoT and AI, is anticipated to burgeon the demand for SDS, SDC and SDN solutions. Its cloud management offers an end-to-end view of its infrastructure resources and additional capital expenditure savings through capacity planning & machine learning to end-user firms.
 

The fast-changing IT landscape is a key factor driving the software-defined data center market. The increasing need to improve IT agility & minimize IT infrastructure complexity is spurring organizations to implement software-defined data center. It will help in the standardization of management tools across infrastructure layers, enabling policy-driven provisions and combined infrastructure resources to offer a quicker response for new requests in IT resources. It also allows IT administrators in end-user firms to reduce operational costs, establish a path in end-use modernization, and retain control overprovisioning. It facilitates applications to independently provision IT resources and when a suitable software is installed, the workload of an administration can be reduced significantly or completely in some cases. Such factors propel the market size.
 

The market players operating in the software-defined data center industry are investing heftily in their R&D activities to minimize IT infrastructure complexity and improve IT agility for their clients. These firms prioritize customer and market-driven feedback along with engineering-driven innovations to enhance their product & service abilities. For instance, in the fiscal year 2018, VMware invested USD 1,975 million in R&D for the development of vSAN, NSX, VMware Cloud on AWS, and cloud-delivered services. The SDDC industry is highly dominated by a few established market players such as VMware, HP Enterprises, IBM Corporation, and Oracle Corporation. The companies operating in the enterprise storage industry are strongly positioned to capitalize on the software-defined model by leveraging their existing resources, customer relationship, and technical expertise. These firms are expected to enter the SDDC market and account for a substantial share over the forecast timeline.
 

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Growing demand for secure and fast transactions propels SDDC applications among U.S. based BFSI firms

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In the U.S., the BFSI businesses/companies are rapidly implementing software-defined data center owing to the growing demand for secure & fast transactions from its customers/clients. It provides efficient data recovery, enhanced security, and mobility solutions for BFSI companies. It facilitates secure banking transactions and high-frequency trading by reducing network latency. It also aids companies to comply with stringent government regulations on increased data center flexibility and adaptability. SDDC uses traditional firewalls and virtual firewalls to avoid potential security blind spots. The increase in the number of BFSI firms and emerging fintech companies in the U.S. is driving the market demand for SDDC solutions. Moreover, the growing need to safeguard business information and sensitive data of customers will propel the market demand for SDDC. Several U.S. based BFSI firms are increasingly adopting software-defined data center to automate & centralize several routine network administration issues, reducing operational, and manpower costs.
 

Software-Defined Storage (SDS) to provide faster scalability and greater flexibility to enterprises and SMEs

In 2019, SDS market segment accounted for the majority of the software-defined data center market share and is anticipated to witness steady market growth over the forecast timeline. SDS enables organizations to achieve high-efficiency, greater flexibility, and faster scalability by making storage resources programmable. With the proliferation of IoT and the rapid increase in data generation, several organizations are automating their data centers. SDS helps to manage and unify all the Network-Attached Storage (NAS) and Storage-Area Network (SAN) devices inside the data center while delivering enterprise-level functionality with zero-dependency on traditional hardware. Moreover, these solutions allow businesses to reduce operational expenditure and storage costs, by enhancing deployment flexibility and allowing them to utilize the storage platform through a single software interface. Rapid growth in SDS segment is estimated to proliferate the market size.
 

Tax-saving benefits and favorable regulations are accelerating Europe market size

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The European market will expand at around 27% CAGR over the forecast timeline. The region has favorable data privacy & protection regulations, abundant availability of renewable energy, and supportive economic conditions, such as tax-saving benefits, driving the data center demand. European companies are rapidly adopting software-defined data center due to favorable regulations on data protection and privacy. For instance, regulatory standards, such as General Data Protection Regulation (GDPR), are spurring companies to construct data centers in the European countries as the regulation ensures companies to protect their data and provide data privacy. Furthermore, Nordic countries are providing tax-saving benefits to data center market players, propelling the market demand for SDDC solutions. Market leaders are expanding their software-defined data center business in Europe to increase their global footprint. For instance, in September 2019, Oracle Corporation announced its plans to expand its cloud data center virtual footprint in the U.S., Canada, UK, Europe, China, India, Japan, Australia, South Korea, Brazil, and GCC. This will help Oracle strengthen its market position in Europe region.
 

Strategic acquisition remains key growth strategies for market players

Major industry leaders operating in the software-defined data center market include Cisco Systems Inc., Fujitsu Ltd., HP Enterprises, Huawei Technologies, Co., Ltd., IBM Corporation, Juniper Networks, Inc., Microsoft Corporation, NEC Corporation of America (NEC Corporation), NetApp, Inc., Nutanix, Oracle Corporation, SUSE, and VMware, Inc. Market players are focusing on strategic alliances to deliver enhanced software-defined data center capabilities to their clients. For instance, in June 2019, VMware, Inc. acquired Avi Networks, a provider of multi-cloud end-use delivery services. The acquisition will enable VMware to deliver the complete Software-Defined Networking (SDN) stack from L2-7 built for modern multi-cloud technology. This acquisition will further strengthen the market position of VMware.
 

The software-defined data center (SDDC) market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2015 to 2026 for the following segments:
 

Market, By Solution

• Software-Defined Networking (SDN)
  • Hardware
  • Software
  • Services
    • Managed services
    • Professional services
• Software-Defined Storage (SDS)
  • Hardware
  • Software
  • Services
    • Managed services
    • Professional services
• Software-Defined Compute (SDC)
  • Hardware
  • Software
  • Services
    • Managed services
    • Professional services

Market, By Organization Size

• SMEs
• Large enterprises

Market, By End-Use

• Enterprise
  • BFSI
  • Retail & e-commerce
  • Government
  • Healthcare
  • Manufacturing
  • IT enabled Services (ITeS)
  • Others
• Telecom Service Provider
• Cloud Service Provider

The above information is provided on a regional and country basis for the following:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Benelux
  • Switzerland
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • Singapore
  • South Korea
  • Australia & New Zealand
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • GCC
  • South Africa