Server Operating System Market by Deployment, End-user, and Geography - Forecast and Analysis 2023-2027

Server Operating System Market Forecast 2023-2027

The server operating system market size is estimated to increase by USD 9.05 billion and grow at a CAGR of 9.08% between 2022 and 2027. The market's expansion hinges on several factors, such as heightened investments in the construction of hyper-scale data centers, the rising adoption of cloud technology among SMEs, and the surge in data center traffic. However, the market faces challenges stemming from the escalation in security issues, difficulties associated with selecting suitable servers, and infrastructural and operational hurdles.

What will be the Size of the Server Operating System Market During the Forecast Period?

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Segmentation

This market report extensively covers market segmentation by deployment (on-premises and cloud), end-user (large enterprises and small and medium-sized enterprises), and geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

By Deployment

The market share growth by the on-premises segment will be significant during the forecast period. On-premises solutions in the global market are popular among companies looking to manage their IT infrastructure. On-premises solutions give companies complete control over the hardware and software, allowing them to adapt the system to their individual needs. One of the main benefits of on-premises solutions is increased security and privacy. Businesses can keep data and applications behind firewalls and other security measures, reducing the risk of cyberattacks and data breaches. This is especially important for software companies that handle sensitive data such as financial or medical information.

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The on-premises segment was valued at USD 7.11 billion in 2017 and continued to grow until 2021. On-premises solutions allow companies to choose their hardware and software companies, design their systems to meet their specific needs and make changes and upgrades as needed. This gives software companies more control over their IT infrastructure, helping them achieve the best possible performance. On-premises solutions also offer improved performance and reliability compared to cloud-based solutions. However, on-premises solutions can be expensive up-front, as software companies must invest in the hardware, software, and staff required to maintain and manage the operating system.

By Region

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North America is estimated to contribute 39% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. One of the reasons why North America has a strong position in the market is the high acceptance of cloud-based services by enterprises. These cloud-based services require advanced systems for optimal performance and security. North America is home to major cloud service providers such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud. Another factor contributing to the growth of the North American market is the increasing demand for data centers.

The North American region is home to some of the world's largest data centers. Companies such as Microsoft Corp (Microsoft), IBM Corp (IBM), and Oracle Corp (Oracle) have a strong presence in North America and invest heavily in research and development (R&D) to innovate and gain a competitive advantage over other companies. For example, Google LLC (Google) announced its USD 750 million new data center in Nebraska to meet its goal of spending USD 9.5 billion on new Google data centers and offices in 2022. Such expansion plans drive the growth of the market in North America during the forecast period.

Market Dynamics and Customer Landscape

 

The market is experiencing dynamic growth, driven by various factors such as the proliferation of hybrid cloud environments, the evolution of 5G networking technologies, and continuous technological advancements. Organizations are increasingly prioritizing security requirements and leveraging server operating systems to meet the demands of cloud computing and digital transformation initiatives. With a focus on enhancing Internet services and optimizing Virtual Desktop Infrastructure (VDI), businesses are investing in server operating systems to streamline operations and minimize server downtime. Moreover, the market caters to diverse needs, from SMEs seeking cost-effective solutions to large enterprises requiring robust security and efficiency in their IT infrastructure. Through cloud adoption and on-premise deployment, organizations are harnessing the power of server operating systems to drive innovation, improve business spending, and elevate overall operational efficiency.Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The market is experiencing significant growth, propelled by growing investments in the construction of hyper-scale data centers worldwide. Data center operators are expanding operations to meet the escalating demand for cloud computing services. For instance, AWS, a leading cloud service provider, has substantially increased annual spending on data centers, reaching USD 16.1 billion in Q3 2021. The Northern Virginia region, hosting over 50 data centers, benefits from extensive IT infrastructure and strategic positioning. Such investments contribute to increased demand for server operating systems, catering to the needs of businesses across various industries, driving market growth during the forecast period.

Significant Market Trends

Technological advancements are the major trend shaping the market. companies in the global market are focused on developing technologically advanced computer server solutions. These companies focus on deploying servers with customized configurations that meet the needs of end-user industries. The government is also supporting the development of new servers in developing countries such as India. For example, the Indian government's Ministry of Electronics and Information Technology (MeitY) launched India's first native server, Rudra, in December 2021. The Advanced Computing Development Center (C-DAC) developed the server as part of the National Supercomputing Mission (NSM). A newly introduced server design can be used to create a standalone commercial server. It also serves as a building block for large supercomputer systems. Similarly, in December 2021, Dell Technologies announced the launch of its new Dell EMC PowerEdge building block rack servers and small footprint tower servers in India. The company claims that its newly launched servers are tailored to the technical needs of small businesses.

The small footprint of these servers helps alleviate SMB space constraints. These servers can also be used in offices, hospitality, and retail environments. Such servers support advanced technologies such as artificial intelligence (AI) and accelerators for enterprise-class workloads such as inference, medical imaging, data analytics, virtualization, and software-defined storage. Therefore, the increasing number of products offered by market companies, technological advancements in the market, and the availability of inexpensive physical servers specifically designed for SMEs all contribute to the growth of the focused market. These factors are likely to propel the growth of the global market during the forecast period. 

Major Market Challenge

The rising number of security issues may impede the growth of the market. Data breaches and cyberattacks are an ongoing threat to businesses, especially small businesses, discouraging investment in physical servers. As a result, security issues have become one of the most important considerations when choosing a computer service provider. According to IBM's 2022 security report, the global average impact of a data breach on an organization is USD 3.86 million, with the highest average cost in the United States at an average of USD 7.9 million. The geographic location of data centers and security systems such as physical security, biometrics, and compliance provides assurance against potentially costly threats.

Additionally, organizations should implement various virtual security measures such as log inspection, strong data encryption, and access based on clearance levels to protect against internal and external attacks and data breaches. Data centers should monitor activity anomalies and report attempts to compromise communications. End-user trust is extremely important to companies operating in the global market. Market providers aim to convince end-users that their or their customers' sensitive data has not been compromised and is safely stored. A data breach doesn't just have an economic impact on your business. This can lead to a lack of trust in the company and provider, and damage the image, integrity, and credibility of the provider. Therefore, these security challenges faced by market companies may adversely affect the growth of the global market during the forecast period.

Key Market Customer Landscape

The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Who are the Major Server Operating System Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Alphabet Inc.: The company offers server operating systems such as COS 101 LTS, Fedora CoreOS stable, and RHEL 9 under the brand Google LLC.

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Alphabet Inc.
• Amazon.com Inc.
• Canonical Ltd.
• Cisco Systems Inc.
• Debian
• Dell Technologies Inc.
• FreeBSD
• Fujitsu Ltd.
• Hewlett Packard Enterprise Co.
• Huawei Technologies Co. Ltd.
• International Business Machines Corp.
• Microsoft Corp.
• NEC Corp.
• Open Text Corp.
• Oracle Corp.
• PC OpenSystems LLC
• SMART Global Holdings Inc.
• Suse Group
• Unisys Corp.
• VMware Inc.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Deployment Outlook 
  • On-premises
  • Cloud

• End-user Outlook 
  • Large enterprises
  • Small and medium-sized enterprises

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Argentina
    • Brazil
    • Chile

Market Analyst Overview

The market is experiencing dynamic growth, driven by various factors including the rise of hybrid cloud environments, the emergence of 5G networking technologies, and the imperative of digital transformation. Businesses are increasingly investing in robust data center infrastructure to meet evolving security requirements and accommodate the surge in Internet services and cloud computing solutions. With the proliferation of AI technology and IoT sensors, there's a growing demand for high-performance and low-latency services. The market witnesses significant traction from smart city projects, necessitating high-availability servers and advanced security and authentication processes. As organizations embrace cloud platforms and adopt hybrid cloud and multi-cloud strategies, the market continues to evolve, catering to diverse enterprise needs and facilitating seamless digital innovation.

Moreover, the market is evolving rapidly, driven by various factors including the increasing adoption of cloud computing services and the surge in IT investment. Businesses are investing heavily in infrastructure and cloud zones to enhance functionality and efficiency while reducing operating costs. Furthermore, the market is witnessing a rise in AI applications and smart city initiatives, fueled by advancements in server management and storage technology. With the emergence of hybrid cloud strategies and the deployment of 5G networks, the market is poised for further growth, catering to the diverse needs of enterprises and regional market participants alike.

Server Operating System Market Scope
Report Coverage	Details
Page number	171
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 9.08%
Market growth 2023-2027	USD 9.05 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	8.51
Regional analysis	North America, Europe, APAC, South America, and Middle East and Africa
Performing market contribution	North America at 39%
Key countries	US, Canada, China, Germany, and UK
Competitive landscape	Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks
Key companies profiled	Alphabet Inc., Amazon.com Inc., Canonical Ltd., Cisco Systems Inc., Debian, Dell Technologies Inc., FreeBSD, Fujitsu Ltd., Hewlett Packard Enterprise Co., Huawei Technologies Co. Ltd., International Business Machines Corp., Microsoft Corp., NEC Corp., Open Text Corp., Oracle Corp., PC OpenSystems LLC, SMART Global Holdings Inc., Suse Group, Unisys Corp., and VMware Inc.
Market dynamics	Parent market analysis, Market forecasting, market growth inducers and obstacles, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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