The Software-Defined Data Center (SDDC) Market

A software-defined data center (SDDC) is a type of data storage solution that uses virtualization concepts. Through automation and pooling of resources, software-defined data centers are deployed as resource-efficient solutions for IT services and access.

Virtualization in software-defined data centers combines the infrastructure’s elements, from the networking and storage to security and CPU, into a unified storage entity.

See below to learn more about the global software-defined data center market:

See more: The Best Data Center Companies

Software-Defined Data Center Market

The global software-defined data center market was estimated at $49.1 billion in 2020. Expected to maintain a compound annual growth rate (CAGR) of 23.5% over the analysis period from 2020 to 2027, it’s projected to reach $215.9 billion by the end of it.

Regionally, the software-defined data center market is segmented as follows:

• The U.S. market was estimated at $14.7 billion in 2020, with a 29.9% share
• The Chinese market is forecast for a CAGR of 23%, reaching $37.5 billion by 2027
• Japan and Canada are forecast to grow at a CAGR of 21.1% and 20% over the forecast period
• Within Europe, Germany is projected to maintain one of the highest CAGRs at 16.4%
• The Asia-Pacific segment, led by Australia, South Korea, and India, is forecast to reach a value of $25.3 billion by 2027

By industry, demand in the software-defined data center market is being driven by several sectors:

• IT
• Banking, financial services, and insurance (BFSI)
• Government
• Health care
• Manufacturing
• Retail and e-commerce

Software-Defined Data Center Features

Software-defined data center architectures are divided into three primary layers: the physical layer, the virtual layer, and the management layer.

The physical layer houses the hardware components of the data center. It includes the storage devices, servers, as well as physical networking aspects.

The virtual layer is where the digital base for the data center is constructed. It houses virtual machines (VMs), in addition to the software-defined storage and software-defined network.

The management layer controls the previous two layers through automation and resource orchestration.

The software-defined components of the data center include:

Compute Virtualization

This is the abstraction and virtualization process of the data center resources, from its operating systems and CPUs to memory storage and management software. Hypervisors are used to pool together resources and set up VMs as needed.

Network Virtualization

Network virtualization enables administrators to operate VMs without concerning the underlying hardware infrastructure. It operates independently and combines all the needed telecomm, routing, DNS, firewall, and administrative work required.

Storage Virtualization

Through virtualization, storage resources are combined, allowing them to work dynamically across the data center, allocating resources wherever they’re needed.

Management, Automation, and Orchestration Software

Software-defined data centers require specialized management, automation, and orchestration software for all its parts to function in unison. This component reduces the need for direct intervention from IT personnel and allows for remote access to the system.

Cybersecurity in SDDCs

Data security plays a major role in determining the design and architecture of a company’s digital infrastructure. The move towards software-defined data centers, especially through on-premises and private cloud solutions, is led partially by the importance of cybersecurity.

Vendors of virtualization services used in facilitating software-defined data centers are introducing specialized tools and services for security and efficiency for cloud adaptation. This made the shift to software-defined data centers preferable for more companies.

“In an SDDC, core data center components — network, compute, storage, and security — are consolidated, virtualized, and delivered as-a-service,” says Craig McDonald, VP of product strategy for systems, SolarWinds.

See more: How Data Centers are Used by Bosch, PayPal, Groupon, Orange, and Suez: Case Studies

Benefits of Software-Defined Data Center

Software-defined data center solutions, whether constructed in-house through a private cloud or purchased as a digital service from a third-party provider, offer numerous benefits to the users, such as:

• Improving business agility
• Increasing storage scalability
• Boosting cost efficiency
• Simplifying the management of storage centers
• Reducing the reliance on manual IT labor

“The future of the ‘lights-out’ data center, believe it or not, actually looks bright. Virtualization and a software-defined data center are already being implemented by many data centers. … This allows the system to take full advantage of the server power. And lastly, storage virtualization groups multiple physical storages into one single device making it easier to manage,” says Michael Isberto, blog director, Colocation America. 

“Software-defined data centers make it easy to automate data center systems. Automated ‘lights-out’ data centers are becoming closer than ever before.”

Software-Defined Data Center Use Cases

The following are a few examples highlighting the use of SDDC technology through the help of various providers:

Japan Airlines

Japan Airlines is a domestic and international air carrier of passengers and cargo. Based in Tokyo, it works through five consolidated subsidiaries and affiliated companies.

Japan Airlines, along with its information and communications technology (ICT) partner, JAL INFOTEC, was on a mission to become the world’s most preferred travel carrier. In order to achieve that status, they needed to upgrade their outdated IT infrastructure.

They worked with IBM to integrate cloud systems using the same virtualization architectures. The companies also had IBM implement a software-defined data center on the IBM Cloud that’s interconnected with their on-premises solution.

“Embracing the concept of a hybrid cloud infrastructure that evolves every half year is the foremost achievement for realizing the digital transformation of the entire JAL Group,” says Masahiko Obata, hybrid cloud infrastructure project manager, JAL INFOTEC.

“Engineers have largely reduced their time spent on user meetings and typical operations and have focused on their primary work such as design and development.”

Collaborating with IBM, the two companies were able to establish a hybrid cloud environment that grows with their businesses and enables switching between their cloud and on-premises storage and systems.

Raiffeisen Informatik

Raiffeisen Informatik is an IT services and management company that works primarily with the financial and insurance sectors and is based in Vienna, Austria.

Looking to elevate its data management agility through automation, Raiffeisen Informatik knew that its best answer was a software-defined data center solution at scale.

Working with Juniper Networks, Raiffeisen used Juniper Apstra to shift its network design and rely more heavily on automation. This allowed Raiffeisen to alleviate its shortage of IT talent.

“The main driver for network automation was people. There are fewer and fewer experienced network engineers, and the obvious way to mitigate the scarcity is to deploy automation to the highest extent possible,” says Ernest Altbart, IT architect, Raiffeisen Informatik.

“With Juniper Apstra, we can automate each aspect of the design, deployment, and operation of our data center fabric, allowing even smaller IT teams to be more responsive to customer needs.”

With Juniper, Raiffeisen was able to continuously upgrade and optimize its data center infrastructure and use automation in many of its primary processes.

The Institute of Molecular Biotechnology

The Institute of Molecular Biotechnology (IMBA) is one of Europe’s leading research institutions with a massive research volume output. Based in Vienna, Austria, it’s composed of 14 research groups and over 200 employees that regularly require reliable access to its IT infrastructure.

Looking to accommodate the growing volume and complexity of research, IMBA needed a more efficient approach to scaling its infrastructure.

Working with Red Hat, IMBA was able to create a software-defined data center solution that’s flexible and scalable without requiring additional staff. It used it to streamline and simplify its IT operations and optimize its digital footprint.

“Adopting Red Hat OpenStack Platform would also give us a comprehensive support chain, with Red Hat and the other data center service vendors providing validated designs for integrations between their technologies,” says Petar Forai, deputy head of IT, Institute of Molecular Biotechnology.

“We used to struggle to provide some environments for big data analysis. With OpenStack, that’s no longer an issue.”

As a result of the shift to a software-defined data center, IMBA was able to install custom high-performance computing (HPC) environments, improve computing performance, and  simplify database management.

Software-Defined Data Center Providers

Some of the leading providers of software-defined data center solutions in the global market include:

• Cisco
• Citrix
• Dell Technologies EMC
• Hitachi
• Microsoft
• Fujitsu
• Oracle
• NEC Corporation
• Juniper Networks
• NetApp

See more: The Edge Data Center Market