Software Defined Storage (SDS) Market Size, Share, Industry, Forecast and outlook (2024-2031)

Global Software Defined Storage (SDS) Market is segmented By Component (Software, Services, Hardware). By Service (Training and Consulting, Integration and Deployment, Support and Maintenance, Managed Services), By Organization Size (Small and Medium-Sized Enterprises, Large Enterprises), By End-User (Banking, Financial and Insurance, IT and Telecom, Healthcare, Education, Retail, Others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031.

Software Defined Storage Market Size

Global Software Defined Storage(SDS) Market reached US$ 31.1 billion in 2022 and is expected to reach US$ 645.2 billion by 2030, growing with a CAGR of 35.8% during the forecast period 2024-2031.

The exponential growth of data, driven by trends like IoT, big data and digital transformation, has created a demand for flexible and scalable storage solutions. SDS allows organizations to efficiently manage and scale their storage infrastructure to accommodate growing data volumes. SDS is frequently less expensive than traditional storage systems. With the advent of the digital economy, data has become an increasingly important component of the banking industry. 

Software-defined infrastructure and storage choices enable multinational banks to swiftly access, analyse and share on-premises data in the cloud, from front to back office operations. Approximately 85% of deposits at Bank of America are made via banking apps, ATMs and automated processes. Over 70 percent of Bank of America clients, comprising 72% of consumer and small business clients, will be actively utilising digital channels for all of their needs by the beginning of July 2021.

With less than 1/4th of the global software-defined data centre market in 2022, Asia-Pacific is expected to be the fastest growing region. With the increasing number of users of the internet, the region's adoption of cloud storage is expected to develop rapidly. According to an EY India 2022 analysis, 67% of large organisations have expanded cloud usage, 39% of medium-sized businesses have begun their cloud trip and 38% of small businesses have started their cloud journey.

Market Summary

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Market Dynamics

Advancement in Technologies 

The exponential growth of data generated by individuals and organizations necessitates more advanced storage solutions. SDS offers scalability to accommodate these increasing data volumes.The widespread adoption of virtualization technologies and cloud computing has driven the need for flexible and scalable storage solutions, which SDS provides and these factors boosts the market.

For instance, on 19 September 2023, Seagate Technology introduced its Exos Corvault 5U84 mass storage system, targeting media and entertainment (M&E) organizations and this solution aims to help reduce carbon emissions and operating costs by extending the service life of drives. It can reduce the overall power consumption of CPU, RAM and networking resources in software-defined data center architecture by up to 50%.

Rising Adoption of Online Payments 

As more consumers and businesses transition to online payment methods, there is a substantial increase in the volume of digital transactions and this growth necessitates robust data storage solutions capable of handling large datasets generated by online payments. Online payment transactions involve sensitive financial information. Regulatory bodies require strict data security and compliance measures. SDS offers flexibility in data encryption, access controls and compliance frameworks, making it an attractive choice for securing payment data.

The Reserve Bank of India's Digital Payments Index measures the extent of digitization of payments in the country. In September 2022, the RBI-DPI jumped to 377.46, up from 349.30 in March of the same year and this increase in the index reflects significant growth in payment infrastructure and payment performance across India. Financial institutions, payment service providers and the Reserve Bank of India itself rely on advanced data storage and analytics solutions to handle the growing digital payment ecosystem efficiently.

Complex Process and Infrastructure Compatibility Issues

Implementing software defined storage is a complex process, especially for organizations with limited IT expertise. Managing software-defined storage solutions requires a certain level of skill and knowledge. SDS solutions may introduce performance overhead due to the additional layer of abstraction and this can impact I/O latency and throughput, particularly in high-performance environments.

Not all legacy hardware and storage systems are compatible with SDS solutions. Organizations may need to invest in new hardware to fully leverage SDS benefits. SDS is designed to be scalable, there can still be practical limits based on the chosen SDS solution, hardware and network infrastructure. Some SDS solutions may create vendor lock-in, making it challenging to switch to different vendors or migrate data to other platforms.

Market Segmentation Analysis

The global software defined storage market is segmented based on component, service organization size, end-user and region.

Flexibility of Software to Add or Remove Capacity Drive Software Solutions Growth

Software solutions are expected to cover about 1/3rd of the global software defined storage market during the forecast period 2023-2030. SDS solutions offer scalability that can easily adapt to changing storage requirements. Organizations can add or remove storage capacity without significant disruptions, making it suitable for businesses of all sizes. SDS often utilizes commodity hardware and allows organizations to make the most of their existing infrastructure and this reduces the need for expensive, proprietary storage solutions.

For instance, on 22 August 2023, Tintri introduced a software-only version of its VMstore product, allowing customers more flexibility in storage solutions. The VMstore software, now called Tintri Cloud Engine (TCE), is decoupled from Tintri's hardware, making it available for use independently. Additionally, Tintri offers VMstore through a managed infrastructure service called Tintri Cloud Platform (TCP). 

Market Geographical Share

Rising Growth and Evolution of Data Solutions in Various Industries in North America

North America is the largest region in the global software defined storage market covering about 1/3rd of the market. The exponential growth of data in various industries necessitates more flexible and scalable storage solutions, which SDS can provide. North American enterprises are increasingly adopting hybrid and multi-cloud strategies. SDS facilitates seamless data management across on-premises and cloud environments.

For instance, on 22 August 2023, Veritas Technologies announced the evolution of its InfoScale solution, a software-defined infrastructure availability solution, for container environments and this development enables customers to deploy InfoScale as containers in native Kubernetes platforms like Red Hat OpenShift. The evolution will start with InfoScale 8, which will include features like software-defined persistent volume storage classes and static persistent storage provisioning container lifecycle management.

Market Players

The major global players in the market include IBM Corporation, NetApp Inc., Dell Technologies Inc., Citrix Systems, Inc., Fujitsu Limited, Seagate Technology PLC, International Business Machines Corporation, Hewlett Packard Enterprise Co, Redapt and Scality.

COVID-19 Impact on Market 

The shift to remote work and the need for secure, accessible data storage and sharing, the demand for flexible SDS solutions has surged. Organizations have sought SDS to ensure that remote employees can access critical data and applications seamlessly. Many organizations experienced a significant increase in data volume during the pandemic and this growth was driven by remote collaboration tools, video conferencing and online transactions. SDS solutions needed to scale rapidly to accommodate this data influx.

The pandemic underscored the importance of data protection and disaster recovery. SDS solutions with robust backup, replication and recovery capabilities became essential as organizations aimed to ensure business continuity and data resilience. Some organizations accelerated their adoption of hybrid and multi-cloud strategies to enhance flexibility and resilience. SDS solutions that could seamlessly extend across on-premises and cloud environments gained traction.

Economic uncertainties prompted organizations to focus on cost optimization. SDS, with its ability to optimize storage resources and reduce hardware costs, became an attractive option for organizations looking to cut IT expenses. As remote work introduced new security challenges, SDS solutions that incorporated robust security features, such as encryption and access controls, gained importance. 

AI Impact

AI can monitor and analyze storage performance in real time, making adjustments to optimize performance for specific workloads automatically and this ensures that critical applications receive the necessary storage resources. AI can help manage the scalability of SDS solutions by predicting future storage needs based on historical data growth patterns, this allows organizations to plan for capacity expansion proactively.

AI-driven auto-tiering systems can automatically move data between different storage tiers based on usage patterns and performance requirements, this ensures that critical data is stored on the fastest storage media while less critical data is moved to slower, more cost-effective storage. AI-powered search and analytics capabilities enable users to find specific data within vast storage repositories quickly and this is especially valuable in scenarios where organizations deal with massive volumes of unstructured data.

For instance, on 21 May 2022, IBM introduced the Spectrum Scale Enterprise Storage Server (ESS) 3500, a software-defined storage device designed to work with Nvidia's DGX dense compute servers for AI training. The ESS 3500 boasts a 2U design with 24 drive bays, a maximum raw capacity of 368TB and can achieve up to 1PB through LZ4 compression. According to IBM, Continental used the ESS 3500 to improve AI training times for self-driving vehicles by up to 70%.

Russia- Ukraine War Impact 

The ongoing conflict has created geopolitical uncertainty in the region and this uncertainty can affect the supply chain and the availability of hardware components, including servers and storage devices, which are essential for deploying SDS solutions. Organizations may face challenges in sourcing hardware from the region or may seek alternative suppliers. Many international organizations operate data centers and IT infrastructure in Eastern Europe, including Ukraine.

Geopolitical conflicts can lead to changes in data security and compliance regulations. Organizations using SDS solutions to store sensitive data may need to reassess their compliance strategies and ensure that data remains secure and compliant with evolving regulations. The war may disrupt the availability of IT talent in the region. Organizations relying on local IT expertise for managing and maintaining SDS solutions may face challenges in retaining skilled professionals or may need to consider alternative talent sources.

Key Developments

• In 18 November 2021, DataCore Software's acquisition of MayaData, the original developer of OpenEBS and MayaStor is a significant move in the software-defined storage (SDS) space. OpenEBS is a Kubernetes-native CAS solution, making it well-suited for cloud-native applications and microservices architectures.
• In March 2022, Nvidia plans to integrate Excelero's technology into its enterprise software stack. This integration will likely enhance Nvidia's data storage and processing capabilities, aligning with its focus on high-performance computing (HPC), AI and data analytics solutions.
• In October 2021, Exxact Corporation and SoftIron announced their partnership to provide software-defined storage solutions with a focus on making SDS simple and accessible for modern enterprises. SoftIron's flagship HyperDrive enterprise storage solution is designed to optimize the performance of Ceph, a leading open-source SDS platform known for its durability, resilience and scalability.

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• To visualize the global software defined storage market segmentation based on component, service organization size, end-user and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development. 
• Excel data sheet with numerous data points of software defined storage market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
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The global software defined storage market report would provide approximately 69 tables, 70 figures and 204 pages.

Target Audience 2024

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