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The software-defined data center (SDDC) market size is forecast to increase by USD 112.1 billion at a CAGR of 28.8% between 2023 and 2028. The market is experiencing significant growth due to the increasing demand for application modernization and infrastructure performance enhancement. Businesses are seeking to optimize costs by transitioning to cloud-based infrastructure and implementing hybrid cloud solutions. Another trend driving the market is the implementation of Artificial Intelligence (AI) in data centers. AI enables automation, predictive analytics, and real-time decision-making, leading to improved performance and reduced operational costs. Management tools that enable resource pooling and standardization are crucial for cross-functional agreements and streamlined operations. However, the adoption of SDDC comes with challenges, including a learning curve for IT teams and ensuring security in a cloud provider's environment. Cybersecurity concerns remain a top priority as organizations move towards more agile and flexible IT infrastructure. Infrastructure performance, cost control, and security are the key drivers shaping the SDDC market landscape. Overall, the market is poised for growth, driven by the need for data center modernization, the adoption of AI, and the increasing focus on cybersecurity.
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Software-Defined Data Centers (SDDC) represent the next evolution of IT infrastructure, offering agility and flexibility to businesses in the US. SDDCs are advanced data center architectures that utilize technology services to virtualize infrastructure resources, including compute, storage, and network functions. Server, compute, storage, and network virtualization are the foundational technologies that enable SDDCs. These technologies allow for the creation of a hyperconverged environment where infrastructure resources are pooled and managed centrally. This leads to policy-driven provisioning, automation, and application modernization, resulting in improved infrastructure performance and cost control.
Furthermore, SDDCs provide several benefits to businesses, including increased IT agility, standardization, cross-functional agreement, and resource utilization. By abstracting infrastructure resources from the physical layer, SDDCs offer greater flexibility in managing IT resources and enable businesses to respond more quickly to changing business needs. Moreover, SDDCs support both cloud-based infrastructure and hybrid cloud deployments, allowing businesses to leverage the benefits of both worlds. Management tools are essential for managing these complex environments, ensuring optimal infrastructure performance and cost control. Despite the numerous advantages, the adoption of SDDCs comes with a learning curve. Security and governance are critical considerations for businesses, as SDDCs require a new approach to managing these aspects of IT infrastructure.
Moreover, cloud providers offer managed SDDC services, providing businesses with a viable option to mitigate the learning curve and focus on their core competencies. In conclusion, SDDCs represent a significant shift in IT infrastructure, offering businesses in the US increased agility, flexibility, and cost control. By virtualizing infrastructure resources and enabling automation and policy-driven provisioning, SDDCs enable businesses to respond more quickly to changing business needs and improve overall IT performance. However, the adoption of SDDCs requires careful consideration of security, governance, and the learning curve associated with managing these complex environments.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The SDS segment is estimated to witness significant growth during the forecast period. Software-Defined Data Centers (SDDC) have gained significant traction in the market due to their ability to address the challenges associated with traditional storage systems. In contrast to conventional storage systems that rely on hardware, SDDCs manage and control the entire storage system through software. This approach eliminates the reliance on specific hardware, thereby resolving complexities and company lock-in issues. Enterprises often encounter compatibility and interoperability problems when switching companies. SDDC solutions enable the use of white-box storage systems, providing enterprises with the flexibility to choose their companies. Furthermore, SDDCs simplify data management, offer transparency into storage availability, and ensure scalability.
Furthermore, key industries adopting SDDCs include banking, financial services, and insurance (BFSI), healthcare, telecom and IT, and digital media. These sectors require high levels of infrastructure performance, application modernization, and cost control. SDDCs offer cross-functional agreements, resource pooling, and standardization, making them an attractive option for these industries. Cloud-based infrastructure, hybrid cloud environments, and management tools are essential components of SDDCs. Security is another critical factor, with SDDCs providing strong security features to protect against cyber threats. The global SDDC market is expected to grow significantly due to these benefits and the increasing demand for agile and flexible IT infrastructure.
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The SDS segment accounted for USD 12.00 billion in 2018 and showed a gradual increase during the forecast period.
North America is estimated to contribute 44% 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.
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The market in North America is experiencing significant growth due to the digital transformation and the increasing adoption of cloud services. Enterprises are seeking advanced technologies, such as artificial intelligence (AI) and machine learning (ML), to manage the large volumes of data generated in data centers. SDDC solutions offer an efficient response to these challenges by effectively utilizing server infrastructure, storage infrastructure, and networking infrastructure. Hyperscalers and colocation data center providers are making substantial investments in North American data centers to meet the rising demand for cloud solutions and high-bandwidth requirements. Centralized management through a dashboard enables lifecycle operations, inventory management, and monitoring of the health status of the data center. SDDC solutions enable organizations to optimize their IT resources and improve overall data center management.
Our researchers analyzed the data with 2023 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.
Demand for data center modernization is the key driver of the market. In today's business landscape, enterprises face significant challenges with traditional data center infrastructures, including inflexibility, complexity, and high operational costs. To address these issues, companies are turning to Software-Defined Data Centers (SDDC) as a modern solution. SDDCs enable organizations to manage their computing, storage, and networking resources through software, eliminating hardware dependency.
Adopting SDDCs offers several advantages. Firstly, it leads to reduced capital and operational expenses by enabling automated provisioning and workload pooling. Secondly, it ensures high reliability and consistency through repeatable templates and centralized control. Thirdly, SDDCs support various deployment models, including bare metal, virtualized, and containerized, catering to diverse workload requirements. Lastly, SDDCs provide a unified view of hardware resources, simplifying data center management and enhancing overall performance. In conclusion, SDDC solutions offer numerous benefits, including cost savings, simplified management, enhanced performance, and flexibility. By adopting SDDCs, businesses can overcome the limitations of legacy data center infrastructures and stay competitive in the ever-evolving digital landscape.
Implementation of AI in data centers is the upcoming trend in the market. In today's business landscape, IT agility is paramount for organizations to remain competitive. One way to achieve this agility is through the adoption of Software-Defined Data Centers (SDDC), which utilize virtualization technologies such as server, compute, storage, and network virtualization. SDDCs enable policy-driven provisioning and automation of infrastructure resources, allowing for quick response to changing business needs. Technology services providers are increasingly integrating Artificial Intelligence (AI) into SDDCs to optimize energy usage and enhance operational efficiency. AI algorithms analyze server performance, power systems, and cooling systems to ensure optimal energy consumption and reduce downtime caused by human errors. By automating data center operations with AI, service providers can eliminate the need for human intervention, resulting in energy savings and improved performance.
Furthermore, AI facilitates the cooling process by making adjustments to mechanical cooling systems, ensuring effective use of power and reducing energy waste. The implementation of AI in SDDCs offers numerous benefits, including increased efficiency, reduced downtime, and improved overall performance. As organizations continue to seek ways to optimize their IT infrastructure, the adoption of AI-enabled SDDCs is expected to become a standard practice.
Cybersecurity issues is a key challenge affecting the market growth. In today's business landscape, data has become a valuable asset for enterprises, enabling them to identify trends and make informed decisions. However, the security of this data is paramount, especially in the face of increasing cyber threats. Traditional infrastructure management approaches, which often result in silos, hinder the ability to effectively protect sensitive information.
Enterprises are turning to Software-Defined Data Centers (SDDC) as a solution to address these challenges. SDDCs offer infrastructure as code, programmability, and extensibility, allowing for the automation of IT processes and the elimination of manual errors. This agility is crucial for managing dynamic workloads and fluctuating business demands. With DevOps and self-service IT practices, SDDCs enable faster application development and deployment, while adhering to agile development principles. By implementing an SDDC, enterprises can ensure the security of their data, mitigate risks, and remain competitive in the market.
The market forecasting 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 market growth analysis strategies.
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Customer Landscape
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.
Cisco Systems Inc. - The company offers software-defined data center such as data center computing.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
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.
Software-defined data centers (SDDCs) have revolutionized IT infrastructure by allowing for greater agility and flexibility in managing infrastructure resources. SDDCs enable the virtualization of compute, storage, and networking infrastructure, creating a hyperconverged environment that can be managed through intelligent software. This technology service offers policy-driven provisioning, automation, and resource pooling, leading to standardization and cross-functional agreements. IT administrators can leverage APIs and infrastructure configuration templates to simplify lifecycle operations and reduce the learning curve. SDDCs also support application modernization, infrastructure performance, cost control, and security, making them an attractive option for organizations seeking to adopt cloud-based infrastructure, hybrid cloud, or infrastructure-as-a-service.
Furthermore, the evolution of virtualization in SDDCs includes server, compute, storage, network virtualization, and container services. These technologies enable the elimination of silos, infrastructure as code, and programmability, making IT service delivery more efficient and extensible. Furthermore, SDDCs provide a central dashboard for managing server, storage, and networking infrastructure, offering real-time inventory, health status, and performance monitoring. SDDCs cater to dynamic workloads and fluctuating business demands, making them ideal for DevOps teams and self-service IT environments. Despite these benefits, security remains a significant concern, with the increasing adoption of cloud services and internet-of-things (IoT) based solutions, making it essential to prioritize cybersecurity measures to protect sensitive data and mitigate the risk of cyberattacks. With high reliability, consistency, and control, SDDCs help reduce costs and enable composable infrastructure, workload pooling, and bare metal or virtualized/containerized deployment options. Security, governance, and intelligent automation are integral components of SDDCs, ensuring a strong and secure IT environment.
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Market Scope |
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Report Coverage |
Details |
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Page number |
157 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 28.8% |
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Market growth 2024-2028 |
USD 112.1 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
22.0 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 44% |
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Key countries |
US, China, Japan, UK, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Arista Networks Inc., AT and T Inc., Cisco Systems Inc., Citrix Systems Inc., Commvault Systems Inc., DataCore Software Corp., Dell Technologies Inc., EQT AB, Fujitsu Ltd., Hitachi Ltd., HP Inc., Huawei Technologies Co. Ltd., International Business Machines Corp., Juniper Networks Inc., Lenovo Group Ltd., Microsoft Corp., Nokia Corp., Nutanix Inc., Oracle Corp., and Scality Inc. |
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Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Component
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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