Software-Defined Storage (SDS) Market by End-user, Component and Geography - Forecast and Analysis 2023-2027

Software-Defined Storage (SDS) Market Forecast 2023-2027

The software-defined storage (SDS) market size is estimated to increase by USD 47.85 billion and grow at a CAGR of 25.93% between 2022 and 2027. The growth of the market depends on several factors, including a surge in cloud adoption, increasing data center investments and data center modernization, low operational expenditure and simplified management. Software-defined storage (SDS) solutions overcome the challenges of traditional storage systems by decoupling storage software and storage hardware. These solutions manage storage functionality and storage resources without depending on the underlying hardware.

What will be the size of the Software-Defined Storage Market During the Forecast Period?

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Segmentation

This market report extensively covers market segmentation by end-user (BFSI, telecom and IT, government, healthcare, and education and others), component (solution and services), and geography (North America, APAC, Europe, 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 End-user

The market share growth by the BFSI segment will be significant during the forecast period. The global market is driven by the growing demand for hosting services from companies in the BFSI segment. Cloud and data center solution providers are investing heavily in data centers due to a variety of factors, such as growing customer numbers, high bandwidth requirements, cost advantages, and demand for low latency.

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The BFSI segment showed a gradual increase in the market share of USD 2.05 billion in 2017 and continued to grow by 2021. With the advent of new technological innovations, such as artificial intelligence (AI), machine learning (ML), deep learning (DL), and blockchain, a huge volume of data is generated and analyzed. All of these factors are driving the demand for solutions that are highly flexible, scalable, efficient, and support multi-tenant. In addition, the solutions help businesses reduce costs and optimize storage. Hence, these factors will drive the growth of the BFSI segment in the market during the forecast period. 

By Component 

Software-defined solutions are alternative data storage programs where resources are decoupled from the underlying physical hardware. A range of applications, such as artificial intelligence (AI)-based personalization, involves the use of artificial intelligence and machine learning to analyze customer data to understand customer preferences and needs. them and tailor their experience accordingly, which is becoming increasingly important, storage-defined solution software to store data. Furthermore, business perks such as email, calendar, and desktop tools are widely used by IT companies on an up-to-date basis. As a result, increasing competition among companies in the end-user sector, aided by the growing demand for factors such as consumer convenience and delight, will drive the growth of the global SDS market in this segment during the forecast period.

Regional Overview

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North America is estimated to contribute 37% 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. Factors such as the growing demand for data center interconnect networks from enterprises are driving the market in North America. The upcoming 5G launch is expected to increase demand for software-defined solutions in the region. Telecom service providers are working hard to launch commercial 5G services.

Furthermore, demand for digital content and media, as well as the adoption of advanced technologies (such as AI) in industries such as healthcare, are expected to drive demand for SDS solutions in North America. Subsequently, data center investments are on the rise in North America, driven by the desire to expand the network in the region of hyperscales. Hence, such factors will drive the growth of the SDS market during the forecast period. 

Market Dynamics and Customer Landscape

The market is experiencing significant growth driven by several key factors. Firstly, the exponential growth of data, fueled by the digital economy and digital transformation initiatives across various industries, has necessitated the adoption of SDS solutions to efficiently manage and store large volumes of data. Additionally, the increasing adoption of cloud storage and container-native SDS solutions is driving market growth, especially in emerging economies where digital transformation efforts are accelerating.

Moreover, the highly regulated operational environment in sectors like banking, telecom, and BFSI is driving the demand for SDS solutions that offer robust data protection, encryption, and compliance features. Businesses across various sectors, including enterprises and public sector organizations, are recognizing the importance of automating process controls and leveraging AI for data analysis, driving the adoption of SDS solutions. Partnerships between SDS companies and technology providers like Exxact Corporation and FalconStor are further fueling market growth by offering innovative and cost-effective solutions to address the evolving storage needs of businesses and citizens alike.

Key Market Driver

The market is primarily driven by the emphasis on low operational expenditure and simplified management. By decoupling software from hardware, companies can significantly reduce operational costs, making SDS solutions an attractive option for businesses across various sectors, including the banking and telecom sectors, BFSI sector, and public sector. Additionally, the flexibility offered by SDS solutions allows companies to scale their infrastructure gradually as needed, further contributing to cost reduction efforts. Furthermore, the availability of diverse solutions tailored to different business requirements, coupled with benefits such as simplified management and scalability, ensures continued growth of the market in the digital economy era.

Significant Market Trends

Increasing the use in running container environments is the primary trend shaping the growth of the market. This improves container runtime by providing more consistent memory. SDS has a built-in functionality with container platforms like Kubernetes, making it easier to manage workloads. With the help of SDS, enterprises can also manage different architectures with fewer data silos. The deduction of silos and its integration with Kubernetes will play an important role in hyper-converged infrastructure.

Moreover, Kubernetes support, easy access to block, file, and object storage, and unified infrastructure from the data center to the public cloud are fast becoming an IT staple for meeting business needs. Customers also want the ability to add store-only or compute-only nodes as needed to their applications. Integrating VMware w with Kubernetes will allow VMware to meet customer needs across all of these aspects. Therefore, market growth will be growing by the increasing use in operating container systems during the forecast period. 

Major Market Restrain

High costs are a significant challenge that affects market growth. Market players in the global market offer these solutions, such as hyper-converged infrastructure, primary, secondary, object, and cloud storage. Storage consolidation is one of the key challenges for businesses that have to purchase multiple solutions according to their needs. Some market players charge an upfront license fee based on the capacity needs.

As a result, players and buyers in the global market are actively working to address these growing concerns through innovation and collaboration. However, with the increasing applications of advanced technologies such as AI and IoT, huge volumes of structured and unstructured data will soon create challenges in terms of data management and storage. businesses, thereby impeding the growth of the market during the forecast period. 

Market Customer Landscape

The Market 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 Software-Defined Storage 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.

VMware Inc.: The company offers software-defined storage products, namely vSAN, Site Recovery Manager, and Virtual Volumes.

Oracle Corp.: The company offers software-defined storage that includes firewall, router, load balancer, virtual private network, and network address translation services in a single virtual machine.

Microsoft Corp.: The company offers software defined storage that includes Microsoft SDS solutions such as storage QOS, storage replica, storage spaces direct, and rolling upgrades.

The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

• Avaya LLC
• Broadcom Inc.
• Cisco Systems Inc.
• Citrix Systems Inc.
• DataCore Software Corp.
• DataDirect Networks Inc.
• Dell Technologies Inc.
• Fujitsu Ltd.
• Hewlett Packard Enterprise Co.
• Hitachi Ltd.
• Huawei Technologies Co. Ltd.
• International Business Machines Corp.
• Lenovo Group Ltd.
• NetApp Inc.
• Nutanix Inc.
• Pure Storage Inc.
• Telefonaktiebolaget LM Ericsson

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. 

• End-user Outlook 
  • BFSI
  • Telecom and IT
  • Government
  • Healthcare
  • Education and others

• Component Outlook
  • Solution
  • Services

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

Market Analyst Overview

The market is witnessing rapid growth, driven by factors like the need for automating process controls and meeting the evolving demands of the Banking and Telecom Sectors. SDS solutions offer deployment flexibility and integration of virtual and non-virtualized resources, catering to Digital Transformation initiatives across various industries. With the exponential growth of data, including unstructured data, SDS addresses scalability challenges while ensuring data protection and security. Companies like Excelero, FalconStor, and SoftIron are at the forefront, providing highly reliable and secure storage capabilities. As market leaders like Nvidia continue to innovate, SDS adoption is expected to surge, especially among small and medium-sized enterprises facing security concerns and lacking skilled operators.

Furthermore, the market is experiencing substantial growth, particularly in sectors like BFSI, where data security and scalability are paramount. Citizens are benefiting from enhanced data protection software and encryption solutions within SDS frameworks. Container-native SDS solutions cater to the digital economy's demands by offering scalable storage architecture for emerging economies. In the BFSI sector, Exxact Corporation and other software-defined storage companies provide secure and highly available storage capabilities, ensuring reliability in a highly regulated operational environment. With exponential data growth and the rise of IoT, SDS solutions are becoming indispensable for IT organizations seeking to manage on-premises data efficiently while embracing new technologies.

Moreover, the market is witnessing rapid expansion driven by various factors, such as Container-Native Software-Defined Storage solutions tailored for modern cloud environments. Additionally, advancements like High-Performance Computing (HPC) and Artificial Intelligence (AI) are driving demand for scalable and efficient data center solutions. With the proliferation of Internet users and IoT devices, businesses face challenges related to managing the volume of unstructured data efficiently. SDS offers solutions for businesses across the banking, telecom, and BFSI sectors, addressing the need for secure, flexible, and easily manageable storage infrastructures in both private and public sectors. Container-native software-defined storage (SDS) solutions are becoming increasingly popular in modern IT infrastructure environments due to their ability to seamlessly integrate with containerized applications and provide scalable and flexible storage capabilities. By leveraging containerization technology, SDS allows for more efficient utilization of resources and simplified management of storage infrastructure.

Customer data analysis is a critical aspect of business intelligence and marketing strategies, enabling companies to gain valuable insights into customer behavior, preferences, and trends. With the proliferation of digital channels and the increasing volume of customer data generated through interactions across various touchpoints, advanced analytics tools are essential for businesses to derive actionable insights and drive informed decision-making. Digital channels encompass a wide range of online platforms and communication channels through which businesses interact with customers, including websites, social media, mobile apps, email, and more. In today's digital age, businesses must leverage digital channels effectively to engage with customers, enhance brand visibility, and drive sales and conversions. The Internet of Things (IoT) refers to the network of interconnected devices embedded with sensors, software, and connectivity capabilities to collect and exchange data. IoT technology enables businesses to monitor and control physical objects remotely, optimize operations, and create innovative products and services.

The lack of skilled operators poses a significant challenge for industries that rely heavily on advanced technologies and complex systems. Addressing this skills gap requires investing in training and development programs to upskill existing employees and attract new talent with the necessary expertise. Market news encompasses updates, trends, and developments within specific industries or markets, providing valuable insights for businesses to stay informed about competitors, industry dynamics, and emerging opportunities or threats. New technology continually shapes and transforms industries, driving innovation, efficiency, and competitiveness. Keeping abreast of new technologies and adopting innovative solutions is essential for businesses to remain relevant and stay ahead of the curve in today's rapidly evolving business landscape.

Software-Defined Storage Market Scope
Report Coverage	Details
Page number	181
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 25.93%
Market growth 2023-2027	USD 47.85 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	24.23
Regional analysis	North America, APAC, Europe, South America, and Middle East and Africa
Performing market contribution	North America at 37%
Key countries	US, China, Japan, UK, and Germany
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	Avaya LLC, Broadcom Inc., Cisco Systems Inc., Citrix Systems Inc., DataCore Software Corp., DataDirect Networks Inc., Dell Technologies Inc., Fujitsu Ltd., Hewlett Packard Enterprise Co., Hitachi Ltd., Huawei Technologies Co. Ltd., International Business Machines Corp., Lenovo Group Ltd., Microsoft Corp., NetApp Inc., Nutanix Inc., Oracle Corp., Pure Storage Inc., Telefonaktiebolaget LM Ericsson, 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, Market condition analysis for 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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