The global data center virtualization market size is anticipated to reach USD 23.14 billion by 2030, growing at a CAGR of 16.5% from 2023 to 2030, according to a new report by Grand View Research, Inc. The requirement for unified and centralized management of data centers and the mounting need to reduce operating costs for organizations and enhance business agility are key factors driving the market. Factors such as the rising demand to decrease data center complexity, increasing spending on data center technology, rising demand for enhanced network security, and adoption of optimization services will also contribute to the growth of the market.
Data Center Virtualization Market Report Highlights
- The server type segment is estimated to occupy the largest share of the market in 2022. It is projected to continue its dominance over the forecast period. The growth of server virtualization can be attributed to major companies coming up with a server virtualization solution, enabling capabilities, thereby attracting more businesses
- By component, the software segment occupied the largest revenue share of around 79% in 2022. Risen adoption of virtualization software such as network virtualization, storage virtualization, and server virtualization in data centers is contributing to the market’s growth
- By service, the optimization services segment is projected to witness the highest CAGR of more than 18% from 2023 to 2030. The growth of the optimization services segment can be attributed to its benefits, which include better data mobility, increased profitability, and enhanced security and compliance
- By organization size, the small and medium-sized enterprises (SMEs) segment is projected to witness the highest CAGR of approx. 17% from 2023 to 2030. Effective campaigns in the data center virtualization industry offering solutions specific to SMEs have also been boosting SMEs' adoption of data center virtualization
- By end-use, the healthcare segment is projected to witness the highest CAGR of around 18% from 2023 to 2030. The growth of the healthcare segment can be attributed to the increasing demand for easy and secure data sharing, and access to high-quality health records, among others
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Additionally, the COVID-19 pandemic has expanded the penetration of digital transformation. Growing adoption of smart devices, IoT, digital transactions, rising automation scope in manufacturing industries via industry 4.0 technologies, and potential for huge data generation in sectors including education, healthcare, BFSI, IT & telecom, and media & entertainment will accelerate the development of data centers, thereby fueling the market for data center virtualization.
More number of businesses are incorporating DevOps and cloud-native technologies onto the businesses development process, which has resulted in the lines between the modern container-based platforms and traditional virtualization platforms to blur; of which a major part can be attributed to organizations opting for cloud-native technologies in support of legacy applications or ones which is not suited for containerization. Organizations operate on a tightrope because they need to negotiate both worlds without burdening IT operations. This has resulted in more IT teams turning to composable disaggregated infrastructure (CDI). CDI can also provide resources on demand to accommodate different workloads, including applications running in VMs, bare metal, and containers in VMs.
Product Type Analysis
The growth of the server segment can be attributed to the benefits of server virtualization, which include better server reliability and availability, better utilization of physical services and power, lower operational costs, and virtual machine creation. Major companies have been coming up with a server virtualization solution, enabling capabilities, thereby attracting more businesses. The benefits offered by desktop virtualization have been the major factor driving the growth of the segment. Some significant benefits of desktop virtualization include easy rollout, enhanced security, better control over installed software, and reduced downtime.
End-use Segment Analysis
Telecom companies utilize data centers to offer various services/ applications such as Mobile Network Monitoring, PDN and Serving Gateways, Gi-LAN, Policy and Charging Rules Function (PCRF), CDN & OTT Caching, Assurance, and Insights. This results in a high number of telecom data centers across the regions; these data centers have been adopting virtualization software services to enhance their capabilities which have been a significant factor in driving the growth of the IT & telecommunication segment. The demand for data center virtualization is expanding due to the benefits of data center solutions in the healthcare industry, such as better patient experience, easy and secure data sharing, access to high-quality health records, insights throughout patient journeys, and improved patient and provider satisfaction. Moreover, the presence of companies such as Google, which has been at the forefront of offering data center solutions to the healthcare industry, has also been driving the growth of the healthcare segment in the data center virtualization industry.
Analysis By Organization Size
Large enterprises are in demand for data center virtualization software and services owing to a high volume of data and millions of customers for which several servers need storage and networking. In the age of increased market competition, large enterprises have been involved in implementing various technologies which could help businesses to gain better traction in the market, owing to the benefits of implementing data center virtualization, which includes simplified management, optimization of resources, and integration with managed services among others. The adoption of data center virtualization has significantly increased among SMEs owing to its benefits, which include cost reduction, better team production, improved disaster recovery, minimal downtime, better provisioning and deployment, and cloud migration. Moreover, effective campaigns in the data center virtualization industry offering solutions specific to SMEs have also been boosting SMEs' adoption of data center virtualization.
Service Segment Analysis
The optimization services growth can be attributed to the benefits of the optimization services, which include reducing the cost of operations, increasing profitability, enhanced security and compliance, faster provisioning, increased productivity, better data mobility, and scalability, among others. The presence of major companies has offered advisory and implementation services to businesses to utilize better the benefits of implementing data center virtualization by offering insights on cybersecurity assessment, compliance & regulatory assessment, and business continuity assessment, among others. These attributes have contributed to the wider adoption of advisory & implementation services.
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The North American region has been at the forefront of adopting the latest technologies, which has played a significant part. The U.S. is home to many data centers, which has been a major factor driving the regional growth. The Asia Pacific region's growth can be attributed to factors such as the rising number of data centers, improving digital infrastructure, digitalization of businesses, increasing adoption of cloud services, and cost-effective aspects of data center virtualization.
The market players have been involved in various strategic initiatives, including partnerships, acquisitions, and mergers. Such initiatives have helped enhance product capability and have a wider sales channel, among others, which has accelerated the growth of the data center virtualization industry over the forecast period. For instance, in May 2023, Aligned Automation announced a partnership with Denodo Technologies to expand the Aligned Automation data virtualization capabilities, enabling the company to offer robust end-to-end data integration solutions. The partnership will enable businesses to have seamless, integrated access to prior siloed data, offer better ways to view and analyze data across enterprises, and increase effectiveness, maximizer efficiency, and cost optimization.
Major Companies In the Data Center Virtualization Market
- ATTO Technology, Inc.
- Cisco Systems, Inc.
- Dell Inc.
- HCL Technologies Limited
- Hewlett Packard Enterprise Development LP
- Huawei Technologies Co., Ltd.
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Segmented the global data center virtualization market based on type, component, service, organization size, end-use, and region:
Table of Contents
Fig. 1 Data center virtualization market segmentation
Fig. 2 Methodology
Fig. 3 Primary research pattern
Fig. 4 Information analysis
Fig. 5 Data analysis model
Fig. 6 Data validation & publishing
Fig. 7 Data center virtualization: Market snapshot
Fig. 8 Data center virtualization: Segment snapshot
Fig. 9 Data center virtualization: Competitive landscape snapshot
Fig. 10 Data center virtualization market Lineage outlook
Fig. 11 Data center virtualization market: Value chain analysis
Fig. 12 Market driver analysis
Fig. 13 Market restraint analysis
Fig. 14 Market opportunity analysis
Fig. 15 Data center virtualization market: Porter’s five forces analysis
Fig. 16 Data center virtualization market: PEST analysis
Fig. 17 Data center virtualization market analysis: Type segment analysis
Fig. 18 Data center virtualization market analysis: Component segment analysis
Fig. 19 Data center virtualization market analysis: Service segment analysis
Fig. 20 Data center virtualization market analysis: Organization size segment analysis
Fig. 21 Data center virtualization market analysis: End-use segment analysis