Software defined data centre market to hit USD $1.49tn

The global software defined data centre market is projected to grow substantially, reaching a market size of approximately USD $1.49 trillion by the year 2036.

According to market analysis, the forecast period between 2024 and 2036 will see the market expand at an average annual growth rate of approximately 24.9%. This market, valued at around USD $83.2 billion in 2023, is driven by several critical factors, including the increasing number of data centres worldwide. Analysts estimate there could be close to seven million data centres operational globally. Moreover, advancements in data centre technology continue to shape the future of centralising organisational functions through software defined data centres.

Software defined data centres provide enhanced data security akin to traditional data centres, being housed within secure internal facilities. However, traditional data centre operations, which rely on large personnel and manual resource management, are becoming increasingly inefficient as data centres grow in size and complexity. This shift is significant in the context of handling the approximately three million terabytes of data generated worldwide daily, signalling a growing demand for software defined data centres.

The North American market is expected to lead in growth, capturing roughly 37% of the global market share over the forecast period. This growth is largely attributed to the increasing prevalence of IoT connected devices in the region, which is anticipated to grow to approximately seven billion connections by the year 2030. The demand for software defined data centres in North America is rising due to the associated challenge of managing large data volumes generated by IoT device mobility.

Similarly, the European market is forecasted to account for approximately 23% of global market share during the same period. This growth is driven by the expansion of large enterprises across the region. In Germany alone, there are projected to be around 11,598 major enterprises with 250 or more employees operating within the non-financial business sector.

The market segment dedicated to small and medium enterprises (SMEs) is projected to secure the highest market share, estimated at roughly 64% during the forecast period. The rise in the number of SMEs globally, from close to 327 million in 2019 to nearly 331 million by 2021, is a key growth factor for this segment.

In terms of sectoral contributions, the IT and telecom segment is positioned to acquire approximately 40% of market share. The substantial adoption of 5G networks, with deployments rising from approximately 85,601 in 112 nations in the previous year to about 127,508 across 128 nations by 2022, is a pivotal factor in the growth of this segment.

Leading companies in the software defined data centre market include VMware, Microsoft, Dell, Hewlett Packard Enterprise, Juniper Networks, Citrix Systems, Oracle, IBM, Cisco Systems, Huawei Technologies, and Fujitsu, among others.

Recent advancements in the sector highlight significant developments such as VMware's updates to its Cloud Provider Platform, intended to help cloud providers broaden their customer base within the emerging application economy. Meanwhile, Microsoft Corporation has entered a long-term strategic relationship with the London Stock Exchange Group (LSEG) to develop LSEG's data infrastructure using the Microsoft Cloud, alongside new data and analytics products and services.