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The virtualization software market size is forecast to increase by USD 48.45 billion at a CAGR of 9.56% between 2023 and 2028. The market is experiencing significant growth due to the increasing adoption of PC, mobile, application, network, and hardware virtualization solutions by IT organizations. This trend is driven by the need for infrastructure cost reduction and improved operational efficiency. The increasing complexity of implementing virtualization solutions is a challenge, but the benefits, such as the ability to run multiple operating systems on a single physical machine and the flexibility to deploy virtual machines in telecommunications and cloud computing environments, outweigh the challenges. Additionally, the rise of the Internet of Things (IoT) is creating new opportunities for virtualization in edge computing applications. Overall, the market is expected to continue its growth trajectory in the US, driven by these market trends and the ongoing digital transformation of businesses.
Virtualization technology has revolutionized IT organizations by enabling the creation of virtual machines (VMs) on a single physical hardware platform. This innovation has led to the proliferation of various types of virtualization, including PC, mobile, application, network, hardware, and operating system (OS) virtualization. Virtualization allows IT services to abstract the hardware resources, creating an abstraction layer for IT infrastructure. This results in optimal security, disaster recovery, and reduced downtime. Virtualization technology is not limited to desktops and servers; it also extends to telecommunications, cloud computing, virtual desktop infrastructure, virtual contact centers, and even Internet of Things (IoT) devices.
Network virtualization enables the creation of virtual networks, while application virtualization abstracts applications from their underlying infrastructure. Mobile virtualization extends the benefits of virtualization to mobile devices, and OS virtualization allows multiple operating systems to run on a single physical server. Virtualization technology's ability to provide instant provisioning, productivity enhancements, and integration with software-defined storage makes it an essential component of modern IT infrastructure. In the ever-evolving digital landscape, virtualization continues to play a crucial role in enhancing IT services and driving innovation.
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 PC virtualization segment is estimated to witness significant growth during the forecast period. The market encompasses solutions like Virtual Desktop Infrastructure (VDI) and Software Virtualization Platforms. VMware, Microsoft, and Oracle lead this sector, offering hardware-assisted virtualization and desktop virtualization solutions. Businesses leverage virtualization to enhance security, streamline operations, and reduce hardware costs. With the rise of remote work, there's a growing need for virtualized desktop environments. Notable offerings include VMware vSphere, Microsoft Hyper-V, and Oracle VM VirtualBox.
Further, the demand for cost-effective, scalable IT infrastructures in various industries fuels the expansion of PC virtualization as a platform, consequently driving the growth of The market. Additionally, advancements such as Cloud-based solutions, 5G technology, and Data center servers are transforming the IT sector, further boosting market growth.
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The PC virtualization segment accounted for USD 49.54 billion in 2018 and showed a gradual increase during the forecast period.
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.
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The market in North America is experiencing significant growth, primarily due to the increasing adoption by enterprises for maximizing resource utilization and cost savings. Key players like VMware, Microsoft, and Citrix lead the market, offering a variety of solutions catering to diverse corporate needs. The North American market is competitive due to the high initial investment required, encouraging innovation and distinctive services. The presence of numerous competitors underscores the industry's dynamism, while the low cost to switch companies influences customer choices. Exit barriers are moderate, enabling businesses to adapt to changing market conditions. The market's expansion is fueled by advancements in cloud-based solutions and the growing demand for virtualization in sectors such as IT, healthcare, and finance.
Virtual desktop infrastructure and software virtualization platforms are essential components of this transformation, enabling digitalization activities and internet computing. Additionally, the integration of 5G technology is expected to further boost the market's growth by enabling faster and more efficient virtualization solutions. The IT sector is increasingly turning to thin client and data center server virtualization to optimize operations and enhance agility.
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.
Infrastructure cost reduction and improved operational efficiency is the key driver of the market. The market is witnessing significant growth due to the virtualization of hardware resources, which enables organizations to optimize operational efficiency and reduce infrastructure costs. Virtualization technology allows multiple operating systems to operate on a single physical server by creating virtual machines. This consolidation enhances hardware utilization, decreasing the need for extensive physical infrastructure. Notable virtualization solutions, such as VMware vSphere and Microsoft Hyper-V, empower enterprises to efficiently distribute computing resources, minimize server sprawl, and save costs. Virtualization's potential to fully utilize existing hardware while maintaining or improving performance makes it an essential solution for businesses seeking resource economy and long-term operational strategies.
In addition, virtualization plays a pivotal role in various sectors, including telecommunications, cloud computing, and the Internet of Things, by enabling the efficient deployment and management of applications and services.
An increasing trend toward edge computing is the upcoming trend in the market. The market is experiencing significant growth due to the increasing adoption of virtualization technologies, particularly at the edge. Edge computing, which involves processing data near its source, is driving the need for virtualization at decentralized locations. Virtualization software enables the creation of virtualized environments at these locations, enhancing the processing capabilities of edge devices. For instance, in a smart factory, virtualized edge servers can effectively manage IoT device data processing or provide real-time analytics at the edge in a smart city. This trend highlights the importance of agile and responsive computing solutions, making virtualization software a crucial component for various edge computing applications.
Virtualization solutions include PC Virtualization, Mobile Virtualization, Application Virtualization, Network Virtualization, and Hardware Virtualization. These technologies are used by IT organizations to optimize the use of operating systems, telecommunications networks, and cloud computing infrastructure. Virtual machines, a key component of virtualization software, allow multiple operating systems to run on a single physical machine, increasing efficiency and reducing hardware costs. In summary, the shift towards edge computing is fueling the demand for virtualization software, which offers efficient, distributed, and low-latency processing for a range of edge computing applications.
The complexity of implementing virtualization solutions is a key challenge affecting the market growth. Virtualization software plays a pivotal role in modern IT infrastructure, enabling organizations to optimize resource utilization and enhance flexibility. However, implementing virtualization solutions, such as PC, mobile, application, network, and hardware varieties, can be intricate, particularly for large-scale businesses with complex IT environments. Integrating these technologies, including server or desktop virtualization, necessitates a deep understanding of the existing infrastructure, compatibility, and data migration complexities. Transitioning traditional systems to virtualized environments may pose challenges due to differences in operating systems or application requirements. The need for specialized expertise in virtualization platforms like VMware or Hyper-V underscores the importance of investing in skilled IT personnel or partnering with experienced service providers to navigate the intricacies and fully realize the potential benefits of virtualization in areas like telecommunications, cloud computing, and the Internet of Things.
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.
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.
Alphabet Inc: The company offers virtualization software such as Itopia Cloud Automation Stack software enterprises which can migrate VDI workloads to Google Cloud, under this subsidiary Google LLC.
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.
Virtualization technology continues to revolutionize IT organizations by enabling the creation and management of virtual machines (VMs) on both PCs and mobile devices. This includes application, network, hardware, and operating system virtualization. IT sectors, telecommunications, BFSI, and digitalization activities are major adopters of virtualization technology. Virtual desktop infrastructure (VDI) and cloud-based solutions are popular choices for organizations seeking to optimize their data storage infrastructure and enhance productivity. Virtualization platforms support various operating systems and offer benefits such as instant provisioning, optimal security, disaster recovery, and downtime reduction. Virtualization technology is also integral to cloud computing, IoT, 5G technology, and collaboration solutions.
Virtual machine security is a critical concern, with cybersecurity professionals addressing data breaches and cyber risks through firewall control and network perimeter access. Virtualization technology is essential for digital transformations, enabling single platform solutions and enabling the abstraction layer between physical hardware and virtual operating systems. Virtualization technology is also crucial for HCI scale, web-related solutions, and virtual contact centers. Virtualization technology's role in cloud services, cybersecurity, and artificial intelligence technology is increasingly significant. Virtual desktop interfaces and thin clients are popular choices for accessing applications and data securely. Data center servers and network function visualization are essential components of virtualization infrastructure.
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Market Scope |
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Report Coverage |
Details |
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Page number |
173 |
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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 9.56% |
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Market Growth 2024-2028 |
USD 48.45 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
8.89 |
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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 37% |
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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 |
Acronis International GmbH, Alphabet Inc., Amazon.com Inc., Anuta Networks International LLC, Broadcom Inc., Cascade Parent Ltd., Cisco Systems Inc., Dell Technologies Inc., Hewlett Packard Enterprise Co., Huawei Technologies Co. Ltd., International Business Machines Corp., Lumen Technologies Inc., Microsoft Corp., Nokia Corp., Nutanix Inc., Open Text Corp., Oracle Corp., Rackspace Technology Inc., SolarWinds Corp., and TIBCO Software 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 Platform
7 Market Segmentation by Technology
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 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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