Global Software-Defined Data Center (SDDC) Market - 2023-2030

Global Software-Defined Data Center (SDDC) Market - 2023-2030

Global Software-Defined Data Center (SDDC) Market reached US$ 39.5 billion in 2022 and is expected to reach US$ 310.2 billion by 2030, growing with a CAGR of 23.4% during the forecast period 2023-2030.

The ability to scale computing, storage and networking resources up or down as needed is a significant factor driving software-defined data center adoption and this scalability supports business growth and fluctuating workloads. Automation is a core feature of software-defined data center. It reduces manual management tasks, minimizes human errors and accelerates provisioning and configuration processes.

Software-defined data center provide tools for optimizing resource utilization, which leads to better performance and cost savings and this is especially important in environments with diverse workloads. Asia-Pacific is the fastest growing region in the global software-defined data center market during the forecast period holding less than 1/4th of the market. It has rapid adoption of cloud services, both public and private. Many governments in the region are going after digital transformation plans actively.

China's cloud business development is an important strategic priority for the central government, as evidenced by significant mentions in the country's 12th and 13th Five-Year Plans. Among the government's 11 primary technology sectors is cloud computing. The National Development and Reform Commission and the Ministry of Industry and Information Technology have launched five pilot cloud programmes in Beijing, Hangzhou, Shanghai, Shenzhen and Wuxi.

Dynamics

Advancement in Technologies

As businesses is a growing there is need for data center solutions that can easily scale to accommodate additional workloads and resources. SDDC provides the flexibility to scale up or down based on demand, making it a valuable solution for businesses experiencing growth. SDDC allows for the consolidation of hardware resources and more efficient utilization of existing infrastructure and this leads to cost savings in terms of reduced hardware procurement, maintenance and operational expenses.

For instance, on 12 May 2023, The Department of Energy's Advanced Research Projects Agency–Energy (ARPA-E) allocated US$40 million in funding for the COOLERCHIPS program, which stands for Cooling Operations Optimized for Leaps in Energy, Reliability and Carbon Hyperefficiency for Information Processing Systems and this ambitious initiative aims to significantly reduce data center power consumption used for cooling to only 5% of the total energy consumption, down from the current 30%-40% in most data centers.

Rising Adoption of Hybrid Cloud-Based Environments

SDDCs allows organizations to abstract and virtualize their data center resources, making it easier to scale up or down based on demand. In hybrid cloud environments the platform flexibility is crucial as workloads can be seamlessly moved between on-premises data centers and public cloud infrastructure. It helps in optimizing resource utilization, reducing hardware costs and improving overall operational efficiency.

For instance, on 30 August 2022, Amazon Web Services and VMware announced the general availability of VMware Cloud on AWS integration with Amazon FSx for NetApp ONTAP and this integration allows customers to scale storage independently in their software-defined data centers (SDDCs), providing a cost-effective way to incrementally add capacity without the need to purchase additional hosts.

Growing Adoption of IoT Devices

SDDCs provide the scalability required to accommodate the massive volume of the data generated by IoT devices. As the number of IoT devices increases, SDDCs can efficiently scale up resources such as storage and computing power to handle the data volume. IoT applications often have diverse requirements, from real-time data processing to long-term data storage. SDDCs offer flexibility in allocating resources based on the specific needs of IoT applications, ensuring optimal performance and cost-efficiency.

According to Cisco, the world currently boasts an impressive count of more than 50 billion smart, interconnected devices and this vast array of devices offers an opportunity to gather valuable data, allowing companies to decipher customer transaction trends and gain insights into consumer behavior. Furthermore, IBM has revealed that an astounding 90% of this data has been generated within the past two years.

Complex and Compatibility Issues

Transitioning to an SDDC can be complex and require significant upfront investment in terms of time, resources and expertise. Organizations need to plan and execute the migration carefully to avoid disruptions. Implementing SDDC infrastructure can be costly, including the acquisition of compatible hardware, software licenses and skilled personnel. Small and medium-sized businesses may find it challenging to justify these upfront expenses.

Integrating legacy systems and applications with the SDDC environment can be complicated. Compatibility issues may arise, necessitating adjustments or upgrades to existing systems. Managing SDDCs requires a skilled IT workforce proficient in software-defined technologies. Finding and retaining qualified personnel can be a challenge for some organizations. SDDCs offer enhanced security features, they are not immune to cyber threats. Organizations must implement robust security measures and regularly update them to protect against evolving threats.

Segment Analysis

The global software-defined data center (SDDC) market is segmented based on component, type organization size, end-user and region.

Adoption of Cloud Infrastructure Increases the Growth of the Market

Software-defined storage is expected to be the dominant segment with about 1/3rd of the market in 2022. As enterprise resources decentralise and grow in bulk, software-defined storage has become mandatory. Software-defined storage enables the combination of multiple storage units into a single unit, eliminating the need for physical storage. It is useful for organisations who overspend on hardware or require more storage space to achieve SLAs.

For instance, on February 2022, Nutanix, a prominent hybrid multi-cloud computing provider, announced the global availability of a simplified product portfolio designed to meet evolving customer needs in the hybrid multi-cloud computing space. It includes Nutanix Unified Storage (NUS), that offers distributed and software-defined storage for many protocols to service a variety of applications deployed anywhere.

Geographical Penetration

Rising Adoption of Cloud-Based Data Center in North America

North America is among the growing regions in the global software-defined data center (SDDC) market covering more than 1/3rd of the market during the forecast period. The region is a leading region in cloud adoption and software-defined data center are a fundamental part of cloud infrastructure. As more businesses migrate to the cloud, the demand for software-defined data centres to provide the essential flexibility, scalability and automation grows.

North American companies are developing plans to improve their performance and grow their position in the global SDDC market. For instance, on 12 July 2022, DartPoints, a digital infrastructure provider, partnered with the University of South Carolina (UofSC) to offer a custom software-defined data center solution and this solution will replace UofSC's current data center and enhance the university's IT agility, compliance, functionality, reliability and security. It will enable cost reduction and improve disaster recovery capabilities.

Competitive Landscape

The major global players in the market include Dell Software Inc., Microsoft Corporation, International Business Machines Corporation (IBM), VMware, Inc., Hewlett Packard (HP), Citrix Systems, Inc., SAP SE, EMC Corporation oracle Corporation and Cisco Systems Inc.

COVID-19 Impact Analysis

The sudden shift to remote work, many organizations faced challenges in ensuring secure and efficient remote access to their data and applications. SDDCs, with their flexibility and scalability, played a crucial role in enabling remote work by providing secure access to critical resources. Businesses that had previously been hesitant to adopt SDDC technologies due to concerns about complexity and security found themselves compelled to fast-track their digital initiatives.

As remote work introduced new security challenges, SDDCs were deployed with enhanced security measures to protect data and applications. Zero-trust security models became more prevalent, ensuring that users and devices are continuously authenticated and authorized before accessing resources within the SDDC.

Economic uncertainties organizations focused on cost optimization. SDDCs allowed for more efficient resource utilization through features like workload balancing and automated provisioning, helping organizations reduce operational costs. SDDCs played a critical role in ensuring business continuity during the pandemic and they enabled automated backup, replication and disaster recovery capabilities, safeguarding data and applications in case of unforeseen disruptions.

AI Impact

AI-powered automation and orchestration tools can streamline and optimize various data center processes. AI algorithms can monitor and analyze data center operations in real-time, identifying patterns and anomalies and this enables automated responses to issues, such as resource allocation adjustments or load balancing, improving efficiency and reducing manual intervention. AI-driven predictive maintenance systems monitor the health of data center hardware and infrastructure components.

AI can optimize resource allocation within SDDCs by dynamically adjusting computing, storage and network resources based on workload demands and this ensures that applications receive the required resources to maintain performance while minimizing resource waste and associated costs. AI-powered data center management systems can optimize energy usage by dynamically adjusting cooling, lighting and power distribution based on real-time conditions.

For instance, on 13 September 2023, EY, a global organization, introduced EY.ai, a unifying platform designed to facilitate the confident and responsible adoption of artificial intelligence (AI) by businesses. Developed over 18 months, EY.ai combines EY's extensive business expertise with AI embedded in its technology solutions and this platform leverages EY's AI capabilities and technology platforms, offering services in strategy, transactions, transformation, risk, assurance and tax, all supported by a robust AI ecosystem.

Russia- Ukraine War Impact

The conflict has added geopolitical uncertainty to the technology sector. Businesses adopting SDDCs along with other IT infrastructure may be reluctant due to concerns about supply chain security and potential disruptions in the area. Ukraine is home to a number of IT companies and data centres, mainly in Kyiv and Kharkiv. The violence may interfere with how these data centers run and may affect how easily accessible IT services hosted in the area are.

Some organizations that had data centers or IT infrastructure located in Ukraine may have considered relocating or diversifying their data center locations to reduce geopolitical risks and this could lead to increased demand for SDDC solutions in more stable regions. the heightened geopolitical tensions organizations may increase their focus on cybersecurity and data protection. With flexibility and security features, SDDCs can be used in larger cybersecurity strategy to safeguard important data and applications.

By Component
• Software
• Services
• Hardware

By Type
• Software-Defined Computing
• Software-Defined Storage
• Software-Defined Data Center Networking
• Automation and Orchestration

By Organization Size
• Large Enterprise
• Small and Medium-sized Enterprises

By End-User
• BFSI
• IT and Telecom
• Government and Defense
• Healthcare
• Education
• Others

By Region
• North America

U.S.

Canada

Mexico
• Europe

Germany

UK

France

Italy

Russia

Rest of Europe
• South America

Brazil

Argentina

Rest of South America
• Asia-Pacific

China

India

Japan

Australia

Rest of Asia-Pacific
• Middle East and Africa

Key Developments
• In August 2023, Broadcom Inc., a global technology leader and VMware, Inc., a significant developer of enterprise software, entered into an agreement under which Broadcom will acquire all the outstanding shares of VMware in a cash-and-stock deal. The deal values VMware at approximately US$ 61 billion.
• In 22 August 2023, VMware expanded its partnership with Oracle to enable customers to modernize their VMware workloads on Oracle Cloud Infrastructure (OCI). Customers can subscribe to Oracle Cloud VMware Solution as part of VMware Cloud Universal, a flexible purchasing program. VMware Cloud Universal is suitable for customers with hybrid cloud architectures or variable cloud migration timelines.
• In July 2022, DartPoints, a leading provider of digital infrastructure, has announced a ground-breaking technical partnership with the University of South Carolina. DartPoints will provide a tailored Software-Defined Data Centre (SDDC) solution to replace the university's current data centre.

Why Purchase the Report?
• To visualize the global software-defined data center (SDDC) market segmentation based on component, type organization size, end-user and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of software-defined data center (SDDC) market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global software-defined data center (SDDC) market report would provide approximately 69 tables, 70 figures and 203 pages.

Target Audience 2023
• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies