Software Defined Data Center Market Report 2025

This Software Defined Data Center 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 software defined data center market size has grown exponentially in recent years. It will grow from $75.85 billion in 2024 to $91.35 billion in 2025 at a compound annual growth rate (CAGR) of 20.4%. The growth in the historic period can be attributed to industry standards and vendor offerings, scalability and elasticity, demand for streamlined operations, software-centric approach, cost efficiency and resource optimization.

The software defined data center market size is expected to see exponential growth in the next few years. It will grow to $226.29 billion in 2029 at a compound annual growth rate (CAGR) of 25.5%. The growth in the forecast period can be attributed to vendor innovation and offerings, edge computing and IoT growth, demand for automation and orchestration, cloud adoption and hybrid its environments, continued emphasis on digital transformation. Major trends in the forecast period include open source and standardization, sustainability and green it initiatives, data center modernization and efficiency, composable infrastructure development, zero trust security models, software-defined networking (SDN) advancements.

The rising adoption of digitalization is anticipated to be a key factor driving the growth of the software-defined data center market. This shift towards digitalization is fueled by the need for enhanced productivity, reduced operational costs, quicker decision-making, improved efficiency, technological advancements, and the push for digital solutions from stakeholders, among other factors. As digitalization expands, it will generate vast amounts of data that require storage, thus increasing the demand for software-defined data centers. This surge in demand for data centers will lead to a significant need for services related to setting up, managing, and operating these facilities. For example, in February 2024, Amazon UK, a prominent e-commerce company based in the UK, reported that the use of AI among UK businesses rose by 31% from 2022 to 2023. Furthermore, the adoption of digital technology and AI could potentially enhance the UK economy by £520 billion by 2030, assisting the country in its ambition to become a tech superpower by 2028.

The rising volume of both structured and unstructured data is anticipated to drive the growth of the software-defined data center (SDDC) market in the coming years. Structured data is organized and follows a defined format, whereas unstructured data is more flexible and does not adhere to a predetermined structure. The integration of these two data types within SDDCs fosters a dynamic and adaptable environment, promoting efficient management, improved analytics, and comprehensive insights that optimize various data center operations. For instance, a report released by The Linux Foundation, a U.S.-based non-profit consortium, revealed in December 2022 that data growth for the average end-user organization reached an impressive 2,208 TB in 2022, marking a 215.43% increase, or three times the 700 TB recorded in 2021. Thus, the increasing volume of structured and unstructured data is fueling the demand for the software-defined data center market during the forecast period.

The increasing adoption of hyper-scale cloud solutions is a significant trend in the software-defined data center market. Hyper-scale refers to the massive scale of computing, typically associated with big data or cloud computing. Infrastructure designed for hyper-scale enables horizontal scalability, resulting in high performance, throughput, and redundancy that support fault tolerance and high availability. Hyperscale computing often utilizes massively scalable server architectures and virtual networking, offering the most cost-effective means to meet demanding requirements. For example, in December 2023, Rackspace Technology, Inc., a U.S.-based cloud computing company, launched its Software Defined Data Center (SDDC) Enterprise and Business solutions for SAP, powered by VMware's virtualized infrastructure. These solutions are tailored to support mission-critical SAP and SAP HANA environments with an integrated hardware and software stack on Dell VxRail, providing a turnkey experience. The SDDC offerings also include various add-on services, such as VMware vRealize Suite, operations management, disaster recovery (DR), and VMware Hybrid Cloud Extension (HCX). Additionally, they feature storage options that comply with SAP's stringent requirements for the latest SAP HANA database, including S/4 HANA.

Leading companies in the software-defined data center market are increasingly focusing on introducing data center suites as part of their strategy to gain a competitive edge. Data center suites, often referred to as modules, are self-contained and highly scalable units with essential components for supporting data center operations. For example, Honeywell International Inc launched the Data Center Suite in September 2022, offering outcome-based software solutions. This suite empowers data center managers to enhance operational cost management, worker productivity, asset health monitoring, and uptime visibility while obtaining comprehensive analytics to drive productivity and cost-cutting efforts.

In May 2022, Broadcom Inc. acquired VMware, Inc for $61 billion, marking a strategic move to offer enterprise customers a broader range of essential infrastructure solutions. This acquisition aims to accelerate innovation and address complex IT infrastructure requirements, providing flexibility to build, run, manage, connect, and protect applications across diverse environments, from data centers to various cloud and edge computing platforms. VMware, Inc, known for its expertise in cloud computing and virtualization technology, is set to contribute to the expanded solutions portfolio of Broadcom Inc.

Major companies operating in the software defined data center market include VMware Inc., Microsoft Corporation, Hewlett Packard Enterprise Company, Dell Technologies Inc., Oracle Corporation, Cisco Systems Inc., Citrix Systems Inc., International Business Machines Corporation, SAP SE, Hitachi Ltd., Fujitsu Ltd., NEC Corporation, Juniper Networks Inc., Western Digital Corporation, Nutanix, Red Hat Inc., Huawei Technologies Co. Ltd., Lenovo Group Limited, NetApp Inc., Pure Storage Inc., Tintri Inc., DataCore Software, Scale Computing, Pivot, StratoScale, Coho Data Inc., Maxta Inc., Hedvig Inc., Diamanti Inc., Robin Systems Inc.

North America was the largest region in the software defined data center market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the software defined data center market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the software defined data center market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Italy, Canada, Spain.

A Software-Defined Data Center (SDDC) denotes a facility for data storage in which networking, storage, CPU, and security are all virtualized and provided as services. SDDCs closely resemble traditional data centers but exhibit notable distinctions, particularly in their utilization of abstraction, virtualization, automation, and resource pooling.

The primary types of the software-defined data center encompass software-defined computing (SDC), software-defined storage (SDS), software-defined data center networking (SDDCN), and automation and orchestration. Software-defined computing involves an integrated abstraction layer that represents the computing environment as a combination of physical and virtual resources, dynamically assembled into services by users. Components of the software-defined data center include hardware, software, and services. SDDCs find application across small, medium, and large-scale enterprises in various industries such as banking, financial services, and insurance (BFSI), information technology (IT) and telecom, government and defense, healthcare, education, retail, manufacturing, and others.

The software defined data center market research report is one of a series of new reports that provides software defined data center market statistics, including software defined data center industry global market size, regional shares, competitors with a software defined data center market share, detailed software defined data center market segments, market trends and opportunities, and any further data you may need to thrive in the software defined data center industry. This software defined data center market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The software defined data center (SDDC) market includes revenues earned by entities by providing data storage solutions that enable central, cloud management for running, managing, and securing applications. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

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).

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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