Software-Defined Data Center Market size was over USD 102.87 billion in 2024 and is anticipated to cross USD 1.81 trillion by 2037, growing at more than 24.7% CAGR during the forecast period i.e., between 2025-2037. In the year 2025, the industry size of software-defined data center is estimated at USD 123.2 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.
Growth Drivers
Challenges
Base Year |
2024 |
Forecast Year |
2025-2037 |
CAGR |
24.7% |
Base Year Market Size (2024) |
USD 102.87 billion |
Forecast Year Market Size (2037) |
USD 1.81 trillion |
Regional Scope |
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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 2037. 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 2037. 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 |
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By Enterprise Size |
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By Industry |
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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 2037. 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 2037. 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 2037. 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.
Author Credits: Abhishek Verma
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