Software Defined Data Center Market Growth Report & Share 2030

Name: Software Defined Data Center Market Growth Report & Share 2030
Creator: Mordor Intelligence
License: https://www.mordorintelligence.com/privacy-policy

Software Defined Data Center Market Size and Share

Market Overview

Study Period	2019 - 2030
Market Size (2025)	USD 73.21 Billion
Market Size (2030)	USD 285.12 Billion
Growth Rate (2025 - 2030)	26.60% CAGR
Fastest Growing Market	Asia Pacific
Largest Market	North America
Market Concentration	Medium
Major Players *Disclaimer: Major Players sorted in no particular order Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0.

Software Defined Data Center Market (2025 - 2030) — Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0.

Software Defined Data Center Market Analysis by Mordor Intelligence

The software-defined data center market size is expected to be valued at USD 73.21 billion in 2025 and is forecast to reach USD 285.12 billion by 2030, reflecting a vigorous 26.6% CAGR over the period. Strong momentum comes from enterprise demand for agile infrastructure, cloud-first strategies, and steady advances in virtualization and automation platforms. Hyperscaler build-outs, coupled with rapid algorithmic workloads, are prompting record capital spending that spills over to colocation and edge operators. Sustained investment in AI-enabled data center infrastructure management, stricter carbon targets, and the arrival of nuclear micro-reactors for on-site generation further reshape competitive dynamics. Vendors able to unify compute, storage, and networking under policy-driven software layers are capturing wallet share from legacy hardware suppliers, while service partners monetize complex migration and managed operations mandates.

Key Report Takeaways

By component, software products held 75.4% of 2024 revenue, while automation and orchestration tools are set to expand at a 28.4% CAGR through 2030.
By deployment model, private environments commanded 41.2% of the software-defined data center market share in 2024, yet hybrid configurations post the highest growth outlook at 26.9% through 2030.
By data center type, colocation facilities contributed 55.22% of 2024 revenue, whereas hyperscaler and cloud service provider sites are projected to climb at a 31.22% CAGR to 2030.
By end-user vertical, IT and telecom companies generated the largest contribution at 41.7% in 2024; government and defense workloads represent the fastest trajectory at 27.12% CAGR through 2030.

Global Software Defined Data Center Market Trends and Insights

Drivers Impact Analysis

Driver	( ~ ) % Impact on CAGR Forecast	Geographic Relevance	Impact Timeline
Cost reduction in hardware and resource use	+6.8%	Global; pronounced in North America and Europe	Medium term (2-4 years)
Cloud and virtualization boom among enterprises	+5.2%	Global; strong in North America, Europe, developed APAC	Short term (≤ 2 years)
Hyper-converged and composable infrastructure uptake	+3.5%	North America, Europe, developed APAC	Medium term (2-4 years)
AI-driven DCIM and digital-twin optimisation	+3.2%	North America, Europe, rising in APAC	Medium term (2-4 years)
Nuclear micro-reactors unlocking rack-level densities	+2.4%	North America; pilot sites in Texas	Long term (≥ 4 years)
Edge-native micro-SDDC orchestration at 5G sites	+1.5%	Global; early adoption in North America, Europe, APAC	Medium term (2-4 years)

Source: Mordor Intelligence

Cost reduction in hardware and resource use

Widespread decoupling of hardware and software lowers capital outlays and shrinks refresh cycles. Enterprises running full-stack SDDC platforms report infrastructure cost savings of 34% and a 564% three-year ROI on VMware Cloud Foundation deployments. Automated provisioning tightens utilization, letting firms cut data center footprints by 50% without performance degradation. Lower power and cooling bills compound the benefit, reinforcing project paybacks across regions.

Cloud and virtualization boom among enterprises

Virtualized compute, storage, and network pools underpin hybrid strategies that reconcile latency-sensitive workloads with public-cloud elasticity. Financial institutions using software defined data center market platforms achieved 40% faster message processing and 30% less downtime after modernizing middleware stacks intuitive.cloud. Kubernetes-ready hosts run side by side with virtual machines, simplifying DevOps pipelines and hastening rollouts.^{[2]Intuitive Cloud, “Enhancing Financial Messaging Infrastructure With Red Hat AMQ,” intuitive.cloud}

Hyper-converged and composable infrastructure uptake

Pre-engineered nodes such as Dell EMC VxRail accelerate time-to-value and centralize lifecycle governance. Integrated Kubernetes in vSphere streamlines container orchestration, while composable fabrics dynamically compose bare-metal clusters for data-intensive analytics. Financial services and healthcare operators value predictable performance and simplified patching across regulated estates.^{[1]Dell Technologies, “VMware Cloud Foundation on Dell EMC VxRail,” delltechnologies.com}

AI-driven DCIM and digital-twin optimisation

Artificial-intelligence engines embedded in DCIM suites model thermal loads, predict failures, and trigger self-healing policies. Digital twins mirror facility layouts, allowing operators to test changes without risk and drive 30% energy savings alongside reduced outages. Vendors integrating inference algorithms directly into virtualization layers gain a margin edge.^{[3]FS, “Revolutionizing Data Centers: Top 10 Technology Trends,” fs.com}

Restraints Impact Analysis

Restraint	( ~ ) % Impact on CAGR Forecast	Geographic Relevance	Impact Timeline
Data-security and compliance complexities	-1.9%	Global; intense in North America, EU	Medium term (2-4 years)
Legacy integration and migration costs	-1.5%	Global; largest in mature IT markets	Short term (≤ 2 years)
Grid-power scarcity and interconnect delays	-1.0%	North America, Europe, developing APAC	Medium term (2-4 years)
Increased vendor consolidation/TCO risk	-0.7%	Global	Short term (≤ 2 years)

Source: Mordor Intelligence

Data-security and compliance complexities

Regulations such as the EU Digital Operational Resilience Act mandate tighter controls from January 2025, pushing financial institutions to verify cyber resilience across virtual layers. Abstracted resource pools challenge perimeter defenses, driving demand for unified key-management hubs like Fortanix Data Security Manager that integrate with VMware Sovereign Cloud. Compliance audits prolong project timelines and raise consulting spend.

Legacy integration and migration costs

Enterprises with decades-old monolithic stacks face application rewrites, data replication, and skill gaps that inflate capex and opex. Complex refactoring projects often encounter hidden dependencies, leading to scope creep and missed deadlines. Phased rollouts and coexistence architectures help mitigate risk but stretch ROI timeframes.

Segment Analysis

By Component: Automation Drives Operational Transformation

The software-defined data center market size for software components reached USD 54.9 billion in 2025, equating to 75.4% of overall revenue. Orchestration engines and policy-based controllers are expanding at a 28.4% CAGR, underlining enterprise appetite for hands-free provisioning. Early adopters record sub-12-month paybacks on workflow automation and drift remediation. Security plug-ins, AI observability modules, and developer tool chains widen the addressable base as ecosystems mature.

Services contribute the remaining share, encompassing advisory, customization, and 24×7 managed operations. Providers bundle migration playbooks, reference architectures, and consumption-based billing to ease entry for heavily regulated verticals. Hardware innovations shift toward composable designs but stay governed by software policies, reinforcing the primacy of code-driven infrastructure.

By Deployment Model: Hybrid Strategies Balance Control and Flexibility

Private instances captured 41.2% of the software-defined data center market in 2024, favored by organizations securing sensitive data. VMware Cloud Foundation exemplifies turnkey stacks that mimic public-cloud economies while retaining on-premises governance. Hybrid estates, however, are projected to post the highest 26.9% CAGR as firms seek elasticity for spiky workloads without abandoning sunk assets.

Rackspace SDDC Flex merges hosted private clouds with hyperscale extensions under a consumption model, illustrating how service providers blur deployment categories. Public-only footprints remain relevant for cloud-native firms, yet even they demand consistent policy engines across zones to avoid tool sprawl.

By Data Center Type: Hyperscalers Accelerate Infrastructure Innovation

Colocation venues supplied 55.22% of 2024 revenue, offering neutral campuses where enterprises interconnect to multiple clouds. Operators invest in liquid cooling, blank-space expansions, and sovereign-cloud suites to retain demand. Hyperscalers are accelerating at a 31.22% CAGR, propelled by AI-centric clusters that may add 171-219 GW of global demand by 2030.

As grid connection queues lengthen, nuclear micro-reactors and on-site renewables gain traction. Edge micro-facilities located at 5G towers further broaden the taxonomy, enabling mission-critical latency guarantees for autonomous vehicles and AR streaming.

By End-user Vertical: Government Sector Embraces Modernization

IT and telecom firms held the largest stake, leveraging continuous integration pipelines and network slicing to monetize 5G and OTT services. Government and defense agencies are scaling fastest at 27.12% CAGR as policies like the Federal Data Center Consolidation Initiative drive virtualization. Secure community clouds, sovereign encryption, and zero-trust blueprints dominate bid requirements.

The BFSI community pursues strict uptime and data residency through stretched clusters and active-active architectures. Healthcare systems apply SDDC to electronic health records and telemedicine, posting measurable boosts in data retrieval speed and clinician productivity. Retail chains integrate point-of-sale analytics and supply-chain telemetry in unified fabric overlays to enhance fulfilment.

Geography Analysis

North America generated 47.6% of 2024 revenue, a consequence of early virtualization adoption, deep cloud ecosystems, and hyperscaler expansion corridors. Nuclear micro-reactor announcements in Texas signal creative approaches to power adequacy. Regulatory clarity around data-sovereignty zones fuels cross-border disaster-recovery pairings between the United States and Canada, while Mexico’s fintech sector ramps up hybrid footprints for open-banking initiatives.

The Asia-Pacific software-defined data center market will rise at a 28.23% CAGR to 2030, aided by sovereign cloud grants, e-commerce surges, and digital-bank licensing rounds. Hyperscalers lease bulk capacity yet still rely on third-party developers to secure land, power, and permits. Singapore maintains hub status through carrier-dense campuses employing novel liquid cooling to meet power caps. India, Japan, and China inaugurate gigawatt-scale campuses, while Australia backs edge rollouts to serve remote mining operations.

Europe adopts SDDC in response to sovereignty and carbon targets. DORA’s January 2025 deadline is spurring financial institutions to harden cyber-resilience, expanding budgets for encrypted per-tenant overlays. Northern markets lead in adoption, and southern states accelerate via public-cloud landing zones and green-hydrogen pilots. The Middle East and Africa see rising activity in the UAE and Saudi Arabia, where utility-scale solar farms couple with modular data halls for clean-energy hosting.

Competitive Landscape

Incumbents such as VMware (now under Broadcom), Microsoft, Dell Technologies, and Cisco collectively control a significant portion of the software-defined data center market. Broadcom’s closing of the VMware acquisition centralizes licensing leverage and stirs customer reassessment of multi-vendor strategies. Technology alliances grow as suppliers fuse network fabrics, CPUs, GPUs, and storage-class memory into validated reference stacks. TerraPower and Sabey’s memorandum to pursue micro-reactor deployments demonstrates convergence between energy and IT operators.

Cloud-native challengers extend control planes into on-premises racks, obviating separate tool chains and eroding incumbent renewal pools. Product differentiation centers on AI-assisted remediation, sovereign-cloud blueprints, and frictionless workload mobility. VMware Cloud Foundation’s recognition as the 2025 “Most Innovative Cloud Infrastructure Solution” underscores the premium on integrated manageability. Sustainability features - carbon dashboards, workload placement engines, liquid-cooling integrations - serve as emerging tiebreakers in large RFPs.

Consolidation among managed service providers continues as firms seek geographic reach and specialized compliance skills. Hardware OEMs embrace consumption pricing to compete with cloud-like models, while semiconductor vendors leverage purpose-built DPU and NPU accelerators to offload infrastructure tasks. The resulting ecosystem encourages modular, vendor-agnostic architectures that preserve customer bargaining power.

Software Defined Data Center Industry Leaders

VMware Inc.
Microsoft Corporation
Dell Technologies
Cisco Systems, Inc.
Huawei Technologies Co., Ltd.
*Disclaimer: Major Players sorted in no particular order

Software Defined Data Center Market Concentration — Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0.

Need More Details on Market Players and Competitors?

Download PDF

Recent Industry Developments

April 2025: Last Energy announced plans to construct 30 microreactors in Texas to provide approximately 600 megawatts of electricity to data centers, addressing the growing energy demand driven by the data center boom and creating new possibilities for high-density computing environments without straining the existing power grid.
March 2025: Rackspace Technology launched the Rackspace SDDC Flex service in partnership with VMware and Dell, offering a cloud service that integrates public and private cloud capabilities with flexible infrastructure, self-service options, automation, and rapid deployment on a consumption-based pricing model.
January 2025: TerraPower and Sabey signed a memorandum of understanding to explore the deployment of microreactors across Sabey's Software Defined Data Centers, aiming to enhance energy efficiency and sustainability in data center operations while addressing power constraints in key markets.
January 2025: Lenovo introduced the ThinkAgile HX630 V3, a 1U integrated system designed for hyperconverged infrastructure featuring 5th and 4th Generation Intel Xeon Scalable processors, supporting Nutanix software and providing enterprise storage, data protection, and management capabilities for various workloads, including VDI and SAP HANA.

Table of Contents for Software Defined Data Center Industry Report

1. INTRODUCTION

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study

2. RESEARCH METHODOLOGY

3. EXECUTIVE SUMMARY

4. MARKET LANDSCAPE

4.1 Market Overview
4.2 Market Drivers
- 4.2.1 Cost reduction in hardware and resource use
- 4.2.2 Cloud and virtualization boom among enterprises
- 4.2.3 Hyper-converged and composable infrastructure uptake
- 4.2.4 AI-driven DCIM and digital-twin optimisation (under-radar)
- 4.2.5 Nuclear micro-reactors unlocking rack-level densities (under-radar)
- 4.2.6 Edge-native micro-SDDC orchestration at 5G sites (under-radar)
4.3 Market Restraints
- 4.3.1 Data-security and compliance complexities
- 4.3.2 Legacy integration and migration costs
- 4.3.3 Grid-power scarcity and interconnect delays (under-radar)
- 4.3.4 Increased vendor consolidation/TCO risk (under-radar)
4.4 Supply-Chain Analysis
4.5 Regulatory Landscape
4.6 Technological Outlook
4.7 Porter's Five Forces Analysis
- 4.7.1 Threat of New Entrants
- 4.7.2 Bargaining Power of Buyers
- 4.7.3 Bargaining Power of Suppliers
- 4.7.4 Threat of Substitutes
- 4.7.5 Intensity of Competitive Rivalry
4.8 Assessment of Macro Economic Trends on Market

5. MARKET SIZE AND GROWTH FORECASTS (VALUE)

5.1 By Component
- 5.1.1 Solutions (SDN, SDS, SDC, Automation and Orchestration Security)
- 5.1.2 Services (Consulting and Integration, Managed, Training and Support)
5.2 By Deployment Model
- 5.2.1 On-Premises
- 5.2.2 Private Cloud
- 5.2.3 Public Cloud
- 5.2.4 Hybrid Cloud
5.3 By Data Center Type
- 5.3.1 Colocation
- 5.3.2 Hyperscalers/Cloud
- 5.3.3 Enterprise and Edge
5.4 By End-user Vertical
- 5.4.1 IT and Telecom
- 5.4.2 BFSI
- 5.4.3 Healthcare
- 5.4.4 Retail and E-Commerce
- 5.4.5 Manufacturing
- 5.4.6 Government and Defense
- 5.4.7 Media and Entertainment
- 5.4.8 Energy and Utilities
- 5.4.9 Other End Users
5.5 By Geography
- 5.5.1 North America
- 5.5.1.1 United States
- 5.5.1.2 Canada
- 5.5.1.3 Mexico
- 5.5.2 Europe
- 5.5.2.1 United Kingdom
- 5.5.2.2 Germany
- 5.5.2.3 France
- 5.5.2.4 Italy
- 5.5.2.5 Spain
- 5.5.2.6 Rest of Europe
- 5.5.3 Asia-Pacific
- 5.5.3.1 China
- 5.5.3.2 Japan
- 5.5.3.3 India
- 5.5.3.4 Singapore
- 5.5.3.5 Australia
- 5.5.3.6 Malaysia
- 5.5.3.7 Rest of Asia-Pacific
- 5.5.4 South America
- 5.5.4.1 Brazil
- 5.5.4.2 Chile
- 5.5.4.3 Argentina
- 5.5.4.4 Rest of South America
- 5.5.5 Middle East and Africa
- 5.5.5.1 Middle East
- 5.5.5.1.1 United Arab Emirates
- 5.5.5.1.2 Saudi Arabia
- 5.5.5.1.3 Turkey
- 5.5.5.1.4 Rest of Middle East
- 5.5.5.2 Africa
- 5.5.5.2.1 South Africa
- 5.5.5.2.2 Nigeria
- 5.5.5.2.3 Rest of Africa

6. COMPETITIVE LANDSCAPE

6.1 Market Concentration
6.2 Strategic Moves
6.3 Market Share Analysis
6.4 Company Profiles (includes Global level Overview, Market level overview, Core Segments, Financials as available, Strategic Information, Market Rank/Share for key companies, Products and Services, and Recent Developments)
- 6.4.1 VMware Inc.
- 6.4.2 Microsoft Corp.
- 6.4.3 Dell Technologies
- 6.4.4 Cisco Systems
- 6.4.5 Hewlett Packard Enterprise
- 6.4.6 IBM Corp.
- 6.4.7 Huawei Technologies
- 6.4.8 Oracle Corp.
- 6.4.9 Citrix Systems
- 6.4.10 NEC Corp.
- 6.4.11 Nutanix Inc.
- 6.4.12 Amazon Web Services
- 6.4.13 Google Cloud Platform
- 6.4.14 Broadcom (VMware division)
- 6.4.15 Juniper Networks
- 6.4.16 Arista Networks
- 6.4.17 Red Hat (IBM)
- 6.4.18 Equinix Inc.
- 6.4.19 Lenovo Group
- 6.4.20 Rackspace Technology

7. MARKET OPPORTUNITIES AND FUTURE OUTLOOK

7.1 White-space and Unmet-need Assessment

You Can Purchase Parts Of This Report. Check Out Prices For Specific Sections

Get Price Break-up Now

Global Software Defined Data Center Market Report Scope

In an SDDC, the applications running on the network can create, provision, and deploy network resources in real-time-adding or removing routers, switches, and servers as the need arises. Industries like telecom & IT, healthcare, retail, BFSI, and manufacturing are embracing SDDC to store huge amounts of supply chain data and customer information without putting much effort into manual hardware installation.

The Software-Defined Data Center Market can be segmented by Type of Product (Solution(Software-Defined Networking, Software-Defined Storage, Software-Defined Computing), Services), End User (Telecom & IT, Healthcare, Retail, BFSI, Manufacturing), and Geography (North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa).

The market sizes and forecasts are provided in terms of value (USD million) for all the above segments.

By Component	Solutions (SDN, SDS, SDC, Automation and Orchestration Security)
	Services (Consulting and Integration, Managed, Training and Support)
By Deployment Model	On-Premises
	Private Cloud
	Public Cloud
	Hybrid Cloud
By Data Center Type	Colocation
	Hyperscalers/Cloud
	Enterprise and Edge
By End-user Vertical	IT and Telecom
	BFSI
	Healthcare
	Retail and E-Commerce
	Manufacturing
	Government and Defense
	Media and Entertainment
	Energy and Utilities
	Other End Users

By Geography	North America	United States
		Canada
		Mexico

	Europe	United Kingdom
		Germany
		France
		Italy
		Spain
		Rest of Europe

	Asia-Pacific	China
		Japan
		India
		Singapore
		Australia
		Malaysia
		Rest of Asia-Pacific

	South America	Brazil
		Chile
		Argentina
		Rest of South America

	Middle East and Africa	Middle East	United Arab Emirates
			Saudi Arabia
			Turkey
			Rest of Middle East

		Africa	South Africa
			Nigeria
			Rest of Africa

By Component

Solutions (SDN, SDS, SDC, Automation and Orchestration Security)

Services (Consulting and Integration, Managed, Training and Support)

By Deployment Model

On-Premises

Private Cloud

Public Cloud

Hybrid Cloud

By Data Center Type

Colocation

Hyperscalers/Cloud

Enterprise and Edge

By End-user Vertical

IT and Telecom

BFSI

Healthcare

Retail and E-Commerce

Manufacturing

Government and Defense

Media and Entertainment

Energy and Utilities

Other End Users

By Geography

North America	United States
	Canada
	Mexico
Europe	United Kingdom
	Germany
	France
	Italy
	Spain
	Rest of Europe
Asia-Pacific	China
	Japan
	India
	Singapore
	Australia
	Malaysia
	Rest of Asia-Pacific
South America	Brazil
	Chile
	Argentina
	Rest of South America

Middle East and Africa	Middle East	United Arab Emirates
		Saudi Arabia
		Turkey
		Rest of Middle East

	Africa	South Africa
		Nigeria
		Rest of Africa

Need A Different Region or Segment?

Customize Now

Key Questions Answered in the Report

What is the current Software Defined Data Center Market size?

The Software Defined Data Center Market is projected to register a CAGR of 26.6% during the forecast period (2025-2030)

Who are the key players in Software Defined Data Center Market?

Microsoft Corporation, Hewlett Packard Enterprise Company, Oracle Corporation, Cisco Systems and VMware Inc. are the major companies operating in the Software Defined Data Center Market.

Which is the fastest growing region in Software Defined Data Center Market?

Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2025-2030).

Which region has the biggest share in Software Defined Data Center Market?

In 2025, the North America accounts for the largest market share in Software Defined Data Center Market.

What years does this Software Defined Data Center Market cover?

The report covers the Software Defined Data Center Market historical market size for years: 2019, 2020, 2021, 2022, 2023 and 2024. The report also forecasts the Software Defined Data Center Market size for years: 2025, 2026, 2027, 2028, 2029 and 2030.