Software-Defined Data Center Market by Software-Defined Computing (Virtualization platforms, Hypervisors), Software-Defined Storage (Storage Management, HCI), Software-Defined Networking (Controllers, Infrastructure), Automation - Global Forecast to 2029
[310 Pages Report] The global SDDC market will grow from USD 75.9 billion in 2024 to USD 184.5 billion by 2029, at a Compound Annual Growth Rate (CAGR) of 19.4% during the forecast period. The development of data centers from mainframes to modern software-defined methods highlights technology progress and changing business requirements.
The key demand drivers for the SDDC market mainly include agility, scalability up or down, and improved operational efficiency in the data center. The rising demand for automation to support complex, multi-clouded environments is among the exciting drivers—an additional distinctive driver for emphasizing cybersecurity. Data center infrastructure management is a stringent requirement, and for most of the companies in SDDC, third-party solutions are gaining momentum for companies seeking qualified IT professionals. SDDC can enhance IT management, break bottlenecks, and make space for improved cost savings; this, in turn, helps enterprises be more agile and innovative.
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Software-defined data center market dynamics
Driver: Surge in adoption of multi-cloud adoption
Businesses are turning to software-defined data centers to manage their multi-cloud environments more effectively. Software-defined data centers provide a single system that makes bringing together and handling resources across different cloud providers easier. This approach enhances how things run, enabling organizations to improve their task management and get better results. The ability to easily manage various cloud services helps with growth and adaptability, helping businesses adapt to changing needs and stay ahead of competitors. Currently, 62% of organizations use a multi-cloud environment, with an additional 18% actively transitioning to one, according to OVHcloud. Moreover, Oracle reports that 98% of public cloud enterprises have adopted a multi-cloud infrastructure.
Restraint : Lack of standardization
Without consistent standards, bringing together different software and hardware from various vendors increases compatibility issues and augments the overall complexity of data center management; this would further result in lost effort and raise the cost of operation since the firms try to ensure smooth interoperability and uniform performance throughout their infrastructure. In addition, the absence of established protocols and standards hampers the scalability of SDDCs as enterprises struggle to extend their infrastructure while preserving compatibility and performance. Lack of uniformity also influences security since varying security measures across various components can lead to vulnerabilities and hinder regulatory compliance.
Opportunity: Enhancement of resilience and uptime
Software-defined data centers offer excellent solutions for maintaining high availability and have state-of-the-art failover/failback so that time is lost to the minimum. The software-defined data centers can be consistently altered and automated, enabling a fast response to problems, ensuring the services' availability, and minimizing the chances of their disruption. This reliability is important for those industries that cannot afford downtimes and enables SD data centers to be a preferable type of modern IT companies' infrastructure. A recent survey by the Uptime Institute in 2023 showed that half of the data center operators had an outage in the last three years. Of these, few experienced severe/serious outages at 10% and significant outages at 17%. The survey also revealed that the cost of the most recent significant outages that the respondents had to bear was above USD 100,000, with nearly 16% of the respondents having to bear losses of more than USD 1 million. These percentages indicate that reliable infrastructure solutions, such as software-defined data centers, are paramount to minimizing outage effects.
Challenge: Lack of skilled workforce
The increasing sophistication of SDDC makes it crucial to have special skills to operate complex technologies. Companies are up against a significant problem because there is currently a lack of skilled personnel in new AI and automation tools. This lack of trained personnel affects functionality and potentially the achievement of the maximum advantages of software-defined data centers. IBM says that 20% of companies indicate they could not hire people with the right AI and automation skills, while 16% could not recruit new workers to plug the gap. Lack of workforce results in low performance, delays, and lack of the proper utilization of the SDDC technologies that have been invested in.
Software-defined data center market ecosystem
Based on solutions, the software-defined computing segment to dominate market during forecast period
Software-defined computing solutions create versatile, unified, but logically centralized control for computing resources. It enhances the abstraction of physical processing capability and memory resources from multiple servers into logical ones. This virtual layer enables configuring and managing the computing power through software with real-time computing capability. The software-defined computing connects to other products to provide the virtualization and allocation of computing resources for applications to get the required computing capability when needed. Combined with virtualization technologies, the computing environment provides fast and efficient application and service deployment, emphasizing time to market. Software-defined computing solutions also facilitate workload balance to determine the suitable distribution of the compute resources to avoid compromising performance. There are also cost savings that can be realized by implementing integrated resource solutions such that there is less needed to procure spare hardware. VMware Corporation's vSphere and Microsoft Azure Virtual Machines present robust architectures for enhancing software-defined computing so that organizations can respond to computing needs. They incorporate easily with other established information technology applications and solutions and can accommodate multiple applications and services. While embracing cloud computing, big data, and AI, the software-defined computing solution will experience a significant surge. Additionally, it can be predicted that as organizations endeavor to extend the functionality of their computing platforms for high-end tasks and large-scale data processing, software-defined computing will offer the required agility and effectiveness. Therefore, this trend in demand for scalable and efficient computing needs will see software-defined computing technologies become popular.
Based on organization's size, the SMEs segment to grow at highest CAGR during forecast period
Organizations with an employee strength of less than 1,000 are termed SMEs. These enterprises are selecting solutions that are cost-effective and easy to implement. Even though SMEs are more limited, they still have great potential for them because they count on smaller IT environments. SDDC model is especially favorable for SMEs to use as it permits quick implementation and subsequent expansion of IT services without massive purchases of physical infrastructure. This plan fits well with the financial resources’ problems that is more familiar amongst small companies. Further, with the help of the SDDCs, the management and monitoring tools are also centralized, which assists SMEs in retaining visibility over the IT environment and complying with safety and security standards. Furthermore, general enhancement of functionalities, including automation of provisioning, policy, real-time analysis, and others, enhances the performance and adaptation ability of SMEs to the dynamic business environment.
As per region, Europe to account for second-largest market share during forecast period.
The SDDC market is rapidly evolving globally, including in Europe and countries, such as the United Kingdom (UK), Germany, France, and Italy. This is due to the regulatory initiatives, the launching of various platforms based on clouds, and the demands for the depreciation of expenses. SDDC solutions are embraced as a modern approach to delivering services that improve operational efficiency, dynamically provision IT services and resources, cut consumption costs, and support new traits, such as cloud computing and edge computing.
According to the European Union, 42.5% of EU enterprises bought cloud computing services in 2023, primarily for email, file storage, and office software. Compared with 2021, the EU's share of enterprises purchasing cloud computing services increased by 4.2% in 2023. This rising cloud adoption contributes to the SDDC market's growth as enterprises look for dependable and effective means to manage and integrate their cloud solutions, solve issues to do with resources and scale, and enhance data center adaptability and flexibility as the environment adapts to the booming digital environment. Big players in the region, such as VMware and Nutanix, are adding new solutions to the SDDC portfolio as businesses seek software-defined solutions to improve compliance, security, and the centralized management of IT infrastructure.
US market to contribute to largest share of North America's SDDC market
North America will lead the SDDC market in 2024. The US is estimated to account for the largest market share in North America in 2024, the SDDC market, and the trend will continue until 2029. The US SDDC market remains active due to spending on cloud computing infrastructure, information technology automation, and protection development. Major cloud providers such as AWS have rampantly scaled up their investments in the US cloud market, investing above USD 108 billion, contributing an estimated USD 37.69 billion to the US GDP. This massive investment underlines the US market's position as the world's leading consumer of cloud services and its growing data center space to address the continued demand across sectors. The trend is unfolding in the expansion of SDDC solutions with the ability to increase capacity and adaptability and improve operations performance. Leading vendors, including Cisco, Oracle, and IBM, are leading in industry adoption through computer, storage, and networking elements in software-defined infrastructure.
Regional Insights
Key Market Players
The SDDC market is dominated by a few globally established players, such as VMware (US), Microsoft (US), Cisco (US), HPE (US), IBM (US), Dell Technologies (US), Oracle (US), Nutanix (UK), Huawei (China), and Fujitsu (Japan), are the key vendors that secured SDDC contracts in the last few years. Customers are trying new things in the SDDC market because of their higher budgets, ease of access to information, and quick adoption of technical items.
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Report Metrics |
Details |
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Market size available for years |
2019–2029 |
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Base year considered |
2023 |
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Forecast period |
2024–2029 |
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Forecast units |
Value (USD Million/Billion) |
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Segments Covered |
Offering, Solutions, Organization Size, End Users |
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Geographies Covered |
North America, Europe, Asia Pacific, Middle East Africa, and Latin America |
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Companies Covered |
Some of the significant SDDC market vendors are VMware (US), Microsoft (US), Cisco (US), HPE (US), IBM (US), Dell Technologies (US), Oracle (US), Nutanix (UK), Huawei (China), and Fujitsu (Japan) |
This research report categorizes the SDDC market based on offerings, solutions, organization size, end users, and region.
Based on the Offering:
- Solutions
- Services
Based on the Service Model:
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Software-Defined Computing
- Virtualization Platforms
- Hypervisors
- Management Tools
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Software-Defined Storage
- Storage Virtualization Software
- Storage Management Software
- Hyperconverged Infrastructure (HCI)
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Software-Defined Networking
- SDN Controllers
- SDN Infrastructure (Switches, Routers)
- Network Virtualization Software
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Management and Operations
- Automation & Orchestration
- Management & Monitoring
Based on the Organization Size:
- Large Enterprises
- SMEs
Based on the End Users:
- Enterprises
- Telecom Service Providers
- Cloud Service Providers
- Managed Service Providers
Based on the Region:
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North America
- US
- Canada
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Europe
- UK
- Germany
- France
- Italy
- Rest of Europe
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Asia Pacific
- China
- Japan
- Australia & New Zealand
- Rest of Asia Pacific
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Middle East & Africa
- Gulf Cooperation Councils (GCC)
- South Africa
- Rest of the Middle East Africa
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Latin America
- Brazil
- Mexico
- Rest of Latin America
Recent Developments:
- In February 2024, VMware expanded its VeloCloud solution with SD-WAN and SSE, improving infrastructure modernization and service monetization within SASE.
- Cisco completed the acquisition of Isovalent in April 2024 to strengthen multicloud security by incorporating Isovalent's software-defined networking solutions, such as eBPF and Cilium, with the Cisco Security Cloud.
- In April 2024, Cohesity partnered with IBM to improve cybersecurity in hybrid cloud environments by combining Cohesity DataProtect with IBM Storage Defender to provide robust, software-based data protection and recovery.
- In July 2024, Nutanix will add software-defined hyperconverged infrastructure to Qatar Airways' hybrid multi-cloud system. Nutanix collaborated with Ooredoo to improve sophisticated applications' scalability, efficiency, and security.
Frequently Asked Questions (FAQ):
What is a software-defined data center?
SDDC is an architectural concept of the future data center in which all the physical hardware and software, including computation, storage, and networking, are automated and carried out through software. This approach employs software to handle and configure the hardware resources so that compared to conventional data center architectures, it becomes flexible, optimized, and scalable.
Which country was the early adopter of SDDC?
The US was at the initial stage of adopting an SDDC.
Which are the key vendors exploring the SDDC?
Some of the significant vendors offering SDDC worldwide include VMware (US), Microsoft (US), Cisco (US), HPE (US), IBM (US), Dell Technologies (US), Oracle (US), Nutanix (UK), Huawei (China), and Fujitsu (Japan).
What is the total CAGR recorded for the SDDC market from 2024 to 2029?
The SDDC market will record a CAGR of 19.4% during the forecast period.
Who are the key players in the SDDC market?
Key players in the SDDC market include: -
- IT infrastructure equipment providers
- Support infrastructure equipment providers
- Component providers
- Software providers
- System integrators
- Network service providers
- Monitoring service providers
- Professional service providers
- Distributors and resellers
- Cloud providers
- Colocation providers
- Enterprises
- Government and standardization bodies
- Telecom operators
- Healthcare organizations
- Financial organizations
- Data center vendors
- Private cloud architect
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The study comprised four main activities to estimate the SDDC market size. We conducted significant secondary research to gather data on the market, the competing market, and the parent market. The following stage involved conducting primary research to confirm these conclusions and hypotheses and sizing with industry experts throughout the value chain. The overall market size was evaluated using a blend of top-down and bottom-up approach methodologies. After that, we estimated the market sizes of the various SDDC market segments using the market breakup and data triangulation techniques.
Secondary Research
We determined the size of companies offering SDDC solutions and services based on secondary data from paid and unpaid sources. We also analyzed major companies' product portfolios and rated them based on their performance and quality.
IIn the secondary research process, various sources were referred to identify and collect information for this study. Secondary sources included annual reports, press releases, and investor presentations of companies; white papers, journals, and certified publications; and articles from recognized authors, directories, and databases. The data was also collected from other secondary sources, such as journals, government websites, blogs, and vendors' websites. Additionally, the spending of various countries on the SDDC market was extracted from the respective sources. We used secondary research to obtain the critical information related to the industry's value chain and supply chain to identify the key players based on solutions, services, market classification, and segmentation according to components of the major players, industry trends related to components, users, and regions, and the key developments from both market- and technology-oriented perspectives.
Primary Research
In the primary research process, we interviewed various primary sources from the supply and demand sides of the SDDC market to obtain qualitative and quantitative information. The primary sources from the supply side included industry experts, such as Chief Executive Officers (CEOs), Vice Presidents (VPs), marketing directors, technology and innovation directors, and related key executives from vendors providing SDDC offerings, associated service providers and is operating in the targeted countries. all possible parameters that affect the market covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to arrive at the final quantitative and qualitative data.
After the complete market engineering process (including calculations for market statistics, market breakup, market size estimations, market forecasting, and data triangulation), we conducted extensive primary research to gather information and verify and validate the critical numbers arrived at. The primary research also helped identify and validate the segmentation, industry trends, key players, competitive landscape, and market dynamics, such as drivers, restraints, opportunities, challenges, and key strategies. In the complete market engineering process, the bottom-up approach and several data triangulation methods were extensively used to perform market estimation and market forecasting for the overall market segments and subsegments listed in this report. We conducted an extensive qualitative and quantitative analysis of the complete market engineering process to list the key information/insights throughout the report.
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Market Size Estimation
The SDDC and related submarkets were estimated and forecasted using top-down and bottom-up methodologies. We used the bottom-up method to determine the market's overall size, using the revenues and product offerings of the major market players. This research ascertained and validated the precise value of the total parent market size through data triangulation techniques and primary interview validation. Next, using percentage splits of the market segments, we utilized the overall market size in the top-down approach to estimate the size of other individual markets.
Top Down and Bottom Up Approach of SDDC Market.
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The research methodology used to estimate the market size included the following:
- We used primary and secondary research to determine the revenue contributions of the major market participants in each country after secondary research helped identify them.
- Throughout the process, we obtained critical insights by conducting in-depth interviews with industry professionals, including directors, CEOs, VPs, and marketing executives, and by reading the annual and financial reports of the top firms in the market.
- We used primary sources to verify all percentage splits and breakups, which we calculated using secondary sources.
Data Triangulation
Once the overall market size was determined, we divided the market into segments and subsegments using the previously described market size estimation procedures. When required, market breakdown and data triangulation procedures were employed to complete the market engineering process and specify the exact figures for every market segment and subsegment. The data was triangulated by examining several variables and patterns from government entities' supply and demand sides.
Market Definition
Considering the views of various sources and associations, a Software-Defined Data Center (SDDC) is an IT model where all infrastructure components—computing, storage, networking, and security—are virtualized and delivered as a service. The management and provisioning of these components are controlled by software rather than dependent on physical hardware.
According to IBM, the SDDC extends virtualization from computing to storage and networking resources, providing a single software toolset to manage those virtualized resources. It results from years of evolution in server virtualization.
As per HPE, SDDC refers to a data center where infrastructure is virtualized through abstraction, resource pooling, and automation to deliver Infrastructure-as-a-Service (IaaS).
Key Stakeholders
- IT infrastructure equipment providers
- Support infrastructure equipment providers
- Component providers
- Software providers
- System integrators
- Network service providers
- Monitoring service providers
- Professional service providers
- Distributors and resellers
- Cloud providers
- Colocation providers
- Enterprises
- Government and standardization bodies
- Telecom operators
- Healthcare organizations
- Financial organizations
- Data center vendors
Report Objectives
- To define, describe, and forecast the Software-Defined Data Center (SDDC) market based on offerings, solutions, organization size, end users, and regions
- To provide detailed information about the major factors (drivers, opportunities, restraints, and challenges) influencing the growth of the market
- To analyze the opportunities in the market for stakeholders by identifying the high-growth segments of the market
- To forecast the market size concerning five central regions—North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America
- To analyze the subsegments of the market concerning individual growth trends, prospects, and contributions to the overall market
- To profile the key players of the market and comprehensively analyze their market size and core competencies
- To track and analyze the competitive developments, such as product enhancements, product launches, acquisitions, partnerships, and collaborations, in the SDDC market globally
Available Customizations
MarketsandMarkets provides customizations based on the company's unique requirements using market data. The following customization options are available for the report:
Product analysis
- The product matrix provides a detailed comparison of each company's portfolio.
Geographic analysis
- Further breakup of the SDDC market
Company information
- Detailed analysis and profiling of five additional market players
Growth opportunities and latent adjacency in Software-Defined Data Center Market
Interested in SDDC market and their vendors
Market trend analysis and vendors in SDDC and related market
Understanding the market trends and prediction of SDN,SDS and SDC market with its advantages and challenges
Interested in converged/hyperconverged systems in the SDN,SDC and SDS domain