Software-Defined Data Center Market Trends

Growth Drivers

• Expanding Popularity of Data Centers – which is depicted by their increasing number. It was observed that in 2022, there were more than 8,000 data centers in the world. 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.

• Increasing Adoption of Cost-Effective Business Models - By pooling infrastructure resources, standardizing management tools across infrastructure layers, and enabling policy-driven provisioning, an SDDC enables IT groups to retain control over provisioning, reduce costs and establish a path to application modernization. It was observed that the operational expenditure (OPEX) of SDDC was almost 50% lower than that of traditional data centers whereas the IT productivity of companies using SDDC rose by 65%.

• Rising Adoption of Cloud Storage Architecture – as per findings, by 2025, 60% of infrastructure and operations (I&O) leaders worldwide are anticipated to implement at least one of the hybrid cloud storage architectures, which is a significant rise from 20% in 2022. This approach is expected to unlock bi-directional application and data mobility based on a shared, secure, and cloud-scale software-defined storage foundation, indirectly leading the market growth.

• Growing Valuation of SaaS Companies Worldwide – for instance, it was found that the median valuation for a public SaaS company is 15x forward revenue in 2023.

Challenges

• Lack of a universally accepted virtualization standard for networks – is anticipated to hamper the market growth as to create software-defined environments, organizations will need to rethink universally accepted standards and adapt many IT processes accordingly. These may include automation, metering, billing, executing service delivery, service activation, and service assurance. Moreover, as all these factors depend on highly complex processes, issues like failing legacy applications in cases where they are just dropped in without accounting for parameters like latency, suitability to a distributed architecture, and fault tolerance at the application level can also become a deterrent.

• Lack of strong IT infrastructure

• Concern about data privacy