Virtual Machine Market Report 2025

This report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market’s historic and forecast market growth by geography.

The virtual machine market size has grown rapidly in recent years. It will grow from $20.26 billion in 2024 to $23.98 billion in 2025 at a compound annual growth rate (CAGR) of 18.3%. The growth in the historic period can be attributed to increased server consolidation, increased legacy application support, increased resource efficiency and cost savings, development and testing environment.

The virtual machine market size is expected to see rapid growth in the next few years. It will grow to $43.26 billion in 2029 at a compound annual growth rate (CAGR) of 15.9%. The growth in the forecast period can be attributed to increasing cloud computing adoption, increasing edge computing expansion, increasing hybrid and multi-cloud architectures, increasing security and compliance requirements. Major trends in the forecast period include serverless computing integration, AI and machine learning optimization, enhanced security features, edge virtualization for IOT.

The rapid adoption of cloud computing is expected to drive the growth of the virtual machine market moving forward. Cloud computing adoption refers to the process by which organizations integrate cloud technologies and services into their IT infrastructure and operations. This shift is driven by factors such as cost savings, scalability, enhanced security, and the ability to provide remote access to data and services. Virtual machines leverage cloud computing to offer scalable, on-demand computing resources, allowing multiple isolated environments to operate on the same physical hardware, thus optimizing efficiency and flexibility. For example, in June 2024, reports from AAG IT Support Service, a US-based digital transformation provider, indicated that public cloud platform-as-a-service (PaaS) revenue reached $111 billion in 2022, with projections showing the cloud market could grow to $376.36 billion by 2029. Additionally, it is estimated that 200 zettabytes (2 billion terabytes) of data will be stored on cloud servers worldwide by 2025. Therefore, the accelerated adoption of cloud computing is fueling the growth of the virtual machine market.

Major companies operating in the virtual machine market are concentrating on new innovative advanced solutions, such as Azure HX and HBv4 virtual machines for high-performance computing (HPC), to secure their position within the market. This machine is optimized for various HPC workloads such as computational fluid dynamics, finite element analysis, rendering, molecular dynamics, and financial risk analysis. For instance, in November 2022, Microsoft Corporation, a US-based technology company, launched Azure HX and HBv4. The HBv4 series excels in diverse HPC applications, from weather simulation to financial analysis, offering significant performance boosts with features like up to 176 AMD EPYC 9004-series (Genoa) CPU cores, 688 GB of RAM, and 400 Gb/s NDR InfiniBand from NVIDIA Networking. On the other hand, the HX-series VMs offer significant performance enhancements at a lower cost, with the latest 4th Gen AMD EPYC processors paired with 400 Gigabit NVIDIA Quantum-2 InfiniBand. Additionally, this series enhances MPI collective offload and routing capabilities with 400 gigabit InfiniBand, is tailored for chip design, and offers unparalleled performance and cost efficiency for HPC customers.

In June 2023, Accenture PLC, an Ireland-based professional services company, acquired Nextira for an undisclosed amount. Through this acquisition, Accenture aims to bolster its AI and ML engineering prowess by integrating Nextira's cloud solutions expertise, thus fostering innovative experiences for customers and employees and propelling product and market innovations. Nextira is a US-based company that provides virtual machine expertise, including cloud-based solutions and services.

Major companies operating in the virtual machine market are Amazon.com Inc., Google LLC, Microsoft Corporation, Alibaba Group Holding Limited, Dell Technologies Inc., Huawei Technologies Co. Ltd., Lenovo Group Limited, Accenture PLC, International Business Machines Corporation, Cisco Systems Inc., Oracle Corporation, Fujitsu Limited, The Hewlett Packard Enterprise Company, Vmware LLC, NetApp Inc., Juniper Networks Inc., Red Hat Inc., Rackspace Technology Inc., Nutanix Inc., Docker Inc., Scale Computing, CloudSimple Inc., Ncomputing Co. Ltd., Proxmox Server Solutions Gmbh, Alludo - Cascade Parent Limited.

North America was the largest region in the virtual machine market in 2024. The regions covered in the virtual machine market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the virtual machine market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The virtual machine market consists of revenues earned by entities by providing services such as server virtualization, security, storage services, legacy software support, software testing, monitoring, and software development. The market value includes the value of related goods sold by the service provider or included within the service offering. The virtual machine market also includes sales of management tools, hypervisors, cloud computing platforms, network virtualization tools, management tools, and automation tools that are used in providing services. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

A virtual machine (VM) refers to a software emulation of a computer system that allows users to run multiple operating systems on a single physical machine. It is used for development, testing, and deployment purposes. It also provides a secure, isolated environment for running applications and enables efficient use of hardware resources by consolidating servers.

The main types of virtual machines are system virtual machines and process virtual machines. A system virtual machine is a type of virtualization technology that enables the creation of multiple virtual machines, each of which functions as a complete and independent computer system. They are used for various applications, such as small-scale enterprises, medium-scale enterprises, and large-scale enterprises, and they are used in several industries, such as banking, financial services, and insurance (BFSI), information technology and telecommunications, retail, healthcare, manufacturing, government, and others.

The main types of virtual machines are system virtual machines and process virtual machines. A system virtual machine is a type of virtualization technology that enables the creation of multiple virtual machines, each of which functions as a complete and independent computer system. They are used for various applications, such as small-scale enterprises, medium-scale enterprises, and large-scale enterprises, and they are used in several industries, such as banking, financial services, and insurance (BFSI), information technology and telecommunications, retail, healthcare, manufacturing, government, and others.

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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