Virtualization Software Market

Virtualization Software Market Outlook (2023-2033)

Worldwide demand for virtualization software is expected to skyrocket at a CAGR of 22.3% from 2023 to 2033. Currently, the global virtualization software market is valued at US$ 40 billion and is anticipated to climb to a size of US$ 300 billion by 2033.

Virtualization software is a sophisticated solution that boosts the abstraction layer over physical hardware, allowing businesses to run two or more virtual operating systems (OS) on a single platform. It provides scalability, flexibility, dependability, and superior security, which is why it is utilized for disaster recovery, productivity enhancement, downtime reduction, immediate provisioning, and overall work effectiveness.

Due to these characteristics, virtualization software is widely used in a variety of industrial sectors. It is currently commercially accessible in a variety of forms, including network, storage, desktop, and server virtualization.

Due to the COVID-19 pandemic, many organizations encouraged employees to work from home, which has been advantageous to server virtualization software vendors. This is due to the fact that an increasing number of organizations and customers turned to these vendors for guidance and assistance to facilitate safe remote work efforts that can guarantee the productivity and safety of their employees while also maintaining ongoing business activities during this global crisis.

Companies have been giving permanent work-from-home jobs since the pandemic, and the number of permanent work-from-home jobs is constantly expanding, boosting the demand for virtualization software.

Moreover, connected enterprises are getting prominence due to their ability to offer converged digital experiences to modern borderless customers and link all levels of enterprise functions to help understand operational intelligence and productivity advantages through seamless knowledge delivery across the enterprise.

Given that remote workers must always remain in contact with company offices and perform functions including passing sales or purchase orders, making sales transactions, and reporting productivity even when away from the office, a new wave of enterprise mobility has emerged, with organizations allowing mobile employees to access company data via remote access points utilizing mobile communication devices such as smartphones or laptops.

As a scattered network of managers and teams collaborate across geographic borders, mobility solutions are becoming increasingly important. In this context, virtualization software is becoming more common due to its advantages and benefits.

Furthermore, the numerous expenditures in R&D efforts for introducing innovative web-related solutions are expected to offer a variety of attractive prospects for market expansion during the predicted period. Additionally, the emergence of virtual customer premises equipment (vCPE) and network function visualization (NFV) solutions for utilizing IT virtualization technologies at lower prices is fueling market growth.

Report Attributes	Details
Virtualization Software Market Size (2023)	US$ 40 Billion
Projected Market Value (2033)	US$ 300 Billion
Global Market Growth Rate (2023-2033)	22.3% CAGR
United States Market Value (2022)	US$ 17.6 Billion
Network Function Virtualization Segment Growth Rate (2023-2033)	16.4% CAGR
Key Companies Profiled	Amazon Inc Oracle Corporation Citrix Systems Inc Microsoft Corporation Google LLC Datadog, Inc Huawei Technologies Co. Ltd IBM Corporation

Why is Virtualization Software Becoming Increasingly Popular?

“Growing Usage of Virtualization Applications by Businesses”

Companies have developed interfaces enabling their employees to access critical business software remotely during the last decade in an attempt to maintain business continuity. As employees shifted to new locations, the demand for collaboration systems for intra-organizational communication grew.

Moreover, the demand for virtual contact centers in the cloud that can function with a remote workforce and virtual machine security in cloud computing is increasing. Cloud computing has risen as one of the most critical virtualization security enablers for enterprises to secure virtual machines and the virtual machine mode of the infrastructure. As a consequence, these diverse virtual applications necessitate the use of virtualization software, aiding market expansion.

Country-wise Insights

Why is the United States the Dominant Power in North America?

“Strong Need to Provide Flexible Work Environment to Employees”

North America is expected to account for the lion's share of the worldwide market during the study period. The presence of significant IT companies/users and rapid technological breakthroughs, such as digitalization in the United States and Canada, are driving market expansion in this region.

The United States is dominating the North American market. The United States garnered US$ 17.6 billion in 2022. The need to cut unnecessary expenditures, such as hardware costs, while also providing employees with a flexible work environment has considerably expanded the use of virtualization software across large, small, and medium-sized businesses in the United States.

How are Japan & South Korea Pushing Asia Pacific Market Growth?

“High Adoption Rate of Advanced Technologies”

Asia Pacific is predicted to witness considerable growth during the forecast period due to the region's rising adoption of virtualization technology and digitalization operations. The Asia Pacific market is expected to grow steadily due to increased IT infrastructure spending, an improving economy, and a rise in commercial and government projects targeted at implementing artificial intelligence (AI) and Internet of Things (IoT) technology across multiple sectors.

Japan is expected to experience significant growth due to the increased adoption of advanced technologies and an increase in the number of digitalization operations by various local organizations. Furthermore, South Korea is projected to follow Japan in terms of growth.

Which Country is Contributing Significantly to European Market Expansion?

“Germany to Make Significant Contribution to European Market”

The demand for virtualization software is increasing in Europe. Germany is making a significant contribution to the European market. Increasing adoption of server virtualization solutions and virtual desktop interfaces (VDI) in large-scale IT companies is boosting market growth in Germany.

Category-wise Insights

Why is the Need for Network Function Virtualization Increasing?

“High Demand for Cloud-based Services & Data-intensive Applications”

Demand for network function virtualization is projected to develop at a CAGR of 16.4% during the forecast period.

Network function virtualization is a virtual network that operates on a standard server using software applications to ensure efficient communication. The system also enables network service providers to provide network services without the use of proprietary hardware. It aids in the optimization of networks and associated operations, as well as minimizing electricity usage and equipment costs.

Network function virtualization enables many apps to be accessible from a single network appliance while significantly lowering capital and running costs. The system uses this network to deliver critical network services such as firewalls, routes, and domain name service (DNS). The increased demand for cloud-based services and data-intensive applications is fueling the need for network function virtualization.

Moreover, the demand for software-defined storage and desktop virtualization is also increasing. Storage virtualization is the process of combining multiple physical storage resources to act as a single storage device. Storage virtualization allows servers and applications to access data from storage arrays without having to know whether the information is stored on a virtual or physical device. This technology allows easy data backup and data transfer between locations.

Desktop virtualization is a software solution that simulates a workstation environment and allows access to desktop computers via a connected device that is either remotely or locally present. It usually includes applications such as Desktop-as-a-Service (DaaS), Remote Desktop Services (RDS), and Virtual Desktop Infrastructure (VDI).

Client software installed directly on the endpoint is often used to access virtual desktops, allowing users to interact and provide input via a local mouse, touchscreen, keyboard, and other peripheral devices. This lessens the overall computing load on local users while simultaneously boosting the security and efficiency of operations. Consequently, it is extensively utilized in a wide range of industries, including telecommunications, information technology (IT), education, BFSI, and healthcare.

Competitive Landscape

Key players operating in the virtualization software market are actively pursuing marketing methods such as partnerships, investments, acquisitions, technological innovations, and R&D activities to expand and strengthen their market presence.

• Microsoft and Meta teamed up in October 2022 to build immersive experiences for the future of work. The partnership enables to offer Mesh for Microsoft Teams to Meta Quest devices, as revealed at Meta Connect 2022. It will allow users to virtually gather where work takes place on any device, including mixed-reality headsets, laptops, and smartphones. Mesh for Teams with Meta Quest 2 and Meta Quest Pro devices allows users to connect and collaborate as if they were in the same room.
• VMware and NetApp extended their partnership in August 2022 to support customers with multi-cloud modernization. VMware Cloud Foundation with Tanzu makes it possible for IT to handle container orchestration and virtual machines (VMs) from a single unified platform. VMware Cloud Foundation and VMware Tanzu support the use of NetApp ONTAP-based storage arrays, enabling customers to create a flexible data fabric for traditional VMs as well as new, containerized applications.
• Red Hat and ABB partnered in July 2022 to develop scalable digital solutions for the hybrid cloud and industrial edge. The partnership allows for the containerization and virtualization of automation software with Red Hat OpenShift, allowing for improved flexibility in hardware deployment that is optimal for application demands.
• IBM acquired Neudesic, a major Microsoft Azure Consultancy, in February 2022 to broaden IBM's offering of hybrid multi-cloud services and improve the company's hybrid cloud and AI strategy.
• VMware and Vodafone collaborated in November 2021. The collaboration seeks to implement the entire VMware Telco Cloud Platform across all European markets. Vodafone will utilize VMware Tanzu for Telco, as well as VMware Telco Cloud Automation and Telco Cloud Infrastructure for NFV.
• Cisco absorbed Socio Labs in July 2021. The acquisition would broaden Webex's services beyond webinars, meetings, and webcasts and provide power to the future of hybrid events.

Key Segments of Virtualization Software Industry Research

• By Platform :

  • PC Virtualization
  • Mobile Virtualization

• By Technology :

  • Network Function Virtualization
  • Desktop Virtualization
  • Software-defined Storage
  • Server Virtualization

• By Region :

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