Server Virtualization Software Market

Server Virtualization Software Market Outlook (2023-2033)

The global server virtualization software market is predicted to expand at a CAGR of 7.1% and touch a valuation of US$ 16 billion by the end of 2033, up from US$ 8 billion in 2023.

Server virtualization refers to the method of creating multiple virtual servers from a single physical server, a place where several companie's files are hosted on networks. A physical server is divided into numerous virtual servers utilizing a specialized server virtualization software named a hypervisor.

Each virtual server, also known as an instance or a virtual environment, has its own operating system that runs separately. This improves the performance capacity of physical servers while eliminating the need for additional virtual machines to be installed for more effective processing power.

Consequently, server virtualization provides numerous benefits, including cost reductions, lower hardware footprints, and optimal resource usage in enterprises' IT infrastructure. Server virtualization is an excellent option for web hosting services. Oracle VM VirtualBox, Microsoft Hyper-V, and VMware vSphere are key software products that are commonly utilized in organizations.

The COVID-19 outbreak created enormous growth potential for the global market. Increased enterprise spending on digital platforms to keep their businesses running during widespread lockdown restrictions around the world had a favorable impact on overall market revenue.

As a result of the pandemic's influence on digitalization, business organizations' usage of cloud-based services and access to data center services expanded significantly.

Cloud deployment models are gaining significant traction due to the extensive usage of server virtualization in cloud computing to improve user access to cloud platforms and enable different applications. The fast adoption of advanced cloud technologies and the growing shift of organizations toward cloud-based services such as Azure, Amazon Web Services, and Google Cloud is driving the cloud deployment models.

Large enterprises make substantial use of server virtualization software. Large enterprises are employing server virtualization software to optimize their IT infrastructure and offer flexible computing resources as needed. Furthermore, the rising demand from small and medium-sized enterprises is boosting the sales growth of server virtualization software.

Due to increased awareness regarding cost savings, improved administrative efficiency, and enhanced protection against cyberattacks, small and medium-sized enterprises have been steadily embracing cloud services.

Moreover, the global market for server virtualization software is benefiting from the tremendous growth of the IT & telecommunication industry, particularly in developing nations like India and China. Using server virtualization assists firms in improving IT operational efficiency, lowering energy consumption, and decreasing overall operating expenses.

Report Attributes	Details
Market Size (2023)	US$ 8 Billion
Projected Market Value (2033)	US$ 16 Billion
Global Market Growth Rate (2023-2033)	7.1% CAGR
United States Market Value (2022)	US$ 2.6 Billion
OS-level Virtualization Segment Growth Rate (2023-2033)	5.5% CAGR
Key Companies Profiled	Amazon.Com, Inc Hewlett-Packard Co, Broadcom Inc IBM Corp Capgemini SE Cisco Systems, Inc Citrix Systems Inc Dell Inc Microsoft Corporation

Why is Server Virtualization Software Gaining So Much Interest?

“Increasing Demand for Adaptable Server Solutions for Complicated Computer Networks”

With the rise of business operations, organizations have to integrate a significant number of computer networks to run and perform effectively. This leads to a more complicated environment for organizations to manage the entire workload of their existing networks.

Server virtualization provides organizations with adaptable alternatives for dealing with complicated computer networks and maximizing the space processing capability of their physical servers. The increased demand for adaptable service solutions like virtual private servers among organizations is a major aspect boosting the global market.

“Growing Usage by Data Center Service Providers”

Data center service providers' growing use of server virtualization to improve clients' access to high-speed data is projected to provide profitable prospects for market participants. The utilization of a conventional server usually leads to processing power idleness because it only utilizes a fraction of the server's processing capacities, resulting in workload overcrowding in data centers. Server virtualization efficiently addresses issues such as underutilized servers, resource waste, and delayed workload processes.

Which Factor Can Impede the Sales Growth for Server Virtualization Software?

“High Initial Costs and Growing Security Concerns”

The initial costs of using server virtualization software are relatively high, and users require software licensing to use the product's advanced features. With the current price ranges, numerous small and medium-sized firms are unable to use the facilities, posing a significant challenge to the global market. Furthermore, the growing security worries among users and the need for competent IT professionals to handle the software are important factors impeding sales growth.

Country-wise Insights

Why is the United States a Huge Market for Server Virtualization Software?

“Early Adoption of Modern Technology and Presence of Major Market Players”

North America dominated the worldwide market and is expected to continue during the forecast period. North America has been at the forefront of numerous groundbreaking IT advances, so its supremacy over the global server virtualization software market is not surprising.

North America is a dominant force in the server virtualization field due to readily available IT infrastructure, the existence of dedicated IT service vendors, a well-established installed base of servers, and a significant focus on energy efficiency.

The United States is a market leader in North America. The United States market was valued at US$ 2.6 billion in 2022. The early adoption of modern technology by enterprises and the presence of significant global players in the country are primarily responsible for the United States market growth.

Moreover, increasing demand for software-defined data centers and increased use of Software as a Service (SaaS) among large-sized organizations in the country are driving market expansion in the United States.

How are the United Kingdom and Germany Aiding Market Growth in Europe?

“Strong Use of Advanced Technologies by Large & Small Businesses”

Europe is following North America in terms of growth. The demand for server virtualization software is increasing in the United Kingdom and Germany due to the substantial use of advanced technologies by large and small businesses in these countries.

Why are Japan and South Korea Major Markets in Asia Pacific?

“Increasing Use of Cloud-based Services and Growing Government Initiatives to Boost IT Investments“

Demand for server virtualization software is growing in Asia Pacific. Japan and South Korea are expected to experience significant growth over the next ten years.

A surge in the use of cloud-based services has prompted organizations in these countries to embrace server virtualization technologies. Moreover, an increase in government programs focused on boosting IT investment is projected to bolster market growth in Japan and South Korea.

Category-wise Insights

What Makes OS-level Virtualization the Dominant Type?

“Heavy Usage in Cloud Computing”

Demand for OS-level virtualization is anticipated to swell at a CAGR of 5.5% during the study period. OS virtualization is the process of changing a basic operating system to run several applications handled by various users on a single computer at the same time.

Demand for OS-level virtualization is escalating due to its widespread use in cloud computing. This sophisticated server virtualization technology can assist numerous apps from multiple users on a single physical server at the same time. Furthermore, it is a relatively low-cost solution for users because it does not need a hypervisor and can run on any conventional operating system.

The need for full virtualization is also growing. Full virtualization employs a hypervisor, a type of software that interfaces directly with the disk space and CPU of a physical server. The hypervisor checks the physical server's resources and ensures that each virtual server is independent of the others.

As it runs applications, it also transmits resources from the physical server to the correct virtual server. The most significant restriction of implementing full virtualization is that each hypervisor has its own processing requirements. This can cause applications to lag and have an impact on server performance.

Competitive Landscape

The market for server virtualization software is highly competitive. Key players in the server virtualization software market are using various development techniques such as mergers and acquisitions, collaboration, and product launches to increase their market share and consumer base.

• VMware, Inc., a prominent cloud computing and virtualization technology company based in the United States, confirmed the continuation of its partnership with IT behemoth Microsoft Corp. in August 2022. The partnership sought to provide enterprise accessibility to multi-cloud services in Microsoft Azure using VMware vSphere. Azure VMware Solution was introduced as part of VMware Cloud Universal to give customers a cost-effective and versatile cloud solution.
• In May 2022, Red Hat, Inc., a leading US-based software company, partnered with US Department of Energy (DOE) laboratories to develop cloud environment standards in high-performance computing (HPC). The partnership sought to provide solutions for the efficient operation of ML, AI, and DL-based HPC workloads.
• Alibaba Cloud, a subsidiary of Alibaba Group, announced 'Yitian 710' server chips for usage in its data centers in October 2021. Alibaba Cloud also revealed the creation of its proprietary servers, dubbed 'Panjiu,' which will be powered by these chips. The combination is anticipated to boost cloud services by lowering energy consumption and increasing computing performance.
• Google LLC revealed an expansion of its Chrome Enterprise Recommended partner program to install the Chrome Operating System (OS) in contact centers in September 2021. The expansion is intended to provide a variety of benefits, including certified contact-center solutions, a secure platform and remote management, and access to virtualization desktop infrastructure.

Segmentation of Server Virtualization Software Industry Research

• By Type :

  • OS-level Virtualization
  • Para Virtualization
  • Full Virtualization

• By Deployment :

  • Cloud
  • On-premise

• By Organization :

  • Small & Medium Enterprises
  • Large Enterprises

• By End Use :

  • BFSI
  • Healthcare
  • IT & Telecommunication
  • Government & Public Sector
  • Transportation & Logistics
  • Manufacturing
  • Others

• By Region :

  • North America
  • Latin America
  • Europe
  • APAC
  • MEA