Server Virtualization Market Size, Share, Growth & Forecast [2031]

Report Description

Server Virtualization Market Outlook 2031

The global server virtualization market size was around USD 8.37 Billion in 2022 and is anticipated to surpass USD 13.83 Billion by 2031, accelerating at a CAGR of 5.74% during the forecast period, 2023–2031. The market growth is attributed to the rising demand for high-speed data centers and the rapid shift to a cloud computing system for effective virtual server results.

Server virtualization refers to the process of creating more virtual servers from a single physical server, a place where several files of organizations are hosted on networks. The process involves the division of a physical server into multiple virtual servers using a specialized server virtualization software called a hypervisor. Each virtual server also called instances and virtual environments have its own operating system that runs independently.

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This way, the performance capacity of physical servers can be enhanced and the requirement for additional virtual machines installation for more effective processing power is also eliminated. As a result, server virtualization offers various benefits including cost savings, reduced hardware footprints, and effective utilization of resources in the IT infrastructure of organizations.

Server virtualization is an ideal option and is widely used for web hosting services. VMware vSphere, Microsoft Hyper-V, and Oracle VM VirtualBox are major software products widely used across business organizations.

COVID-19 Impact on Server Virtualization Market

The market report finds that the COVID-19 pandemic opened up immense growth opportunities for the market. The rising spending of enterprises on digital platforms to continue their business operation during the widespread lockdown restrictions across the globe had positively impacted the overall market revenue. As largely influenced by digitalization during the pandemic, the adoption of cloud-based services and access to data center services among business organizations increased substantially.

Server Virtualization Market Dynamics

The global server virtualization market report presents a complete overview by providing detailed information about market trends and scenarios that can shape the overall market performance and output during the forecast period, 2022 to 2030.

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Major Drivers

Growing demand for flexible server solutions in handling complex computer networks 

With the expansion of business operations, many organizations have to integrate a large volume of computer networks for their effective functioning and performance. This results in creating a more complex environment for organizations to handle the overall workload of their existing networks.

Server virtualization offers flexible solutions that help organizations in tackling complex computer networks and maximize the space processing power of their physical servers. The rising demand for flexible service solutions such as virtual private server among business enterprises is a key factor driving the market.

Existing Restraints

High upfront costs and security concerns for users

The upfront costs for using server virtualization software are very high and users need software licensing to access the advanced facilities of the product. With the existing price ranges, many small & medium businesses cannot get access to the facilities, which acts as a key challenge to the market. Moreover, the rising security concerns of users and the requirement for experienced IT experts for handling the software are major factors hampering the market expansion.

Emerging Opportunities

Rising demand for server virtualization from data center service providers

The rising adoption of server virtualization by data center service providers to enhance high-speed data access for clients is likely to create lucrative opportunities for market players. The use of a traditional server usually results in idleness of processing power as it uses a fraction of the server’s processing capacities, which leads to workload overcrowding in data centers. The issues related to unutilized servers, waste of resources, and slow workload process are effectively tackled by using server virtualization.

Scope of Server Virtualization Market Report

The global server virtualization market research report includes an assessment of the market trends, market segments, and regional markets. Overview and dynamics have also been included in the report.

Server Virtualization Market Segment Insights 

OS-level virtualization segment to expand at a significant growth rate

Based on type, the global server virtualization market is divided into OS-level virtualization, para virtualization, and full virtualization. The OS-level virtualization segment held a major share of the market in 2021 and is expected to expand at a CAGR of 5.1% during the projected period owing to the wide use of the virtualization type in cloud computing.

This advanced server virtualization technology can support different applications from multiple users at a time on a single physical server. Moreover, it is relative a cost-saving technology for users as it does not require a hypervisor and can operate in a standard operating system. 

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Increasing shift toward cloud computing and technology boosts the cloud segment

On the basis of deployment, the global market is bifurcated into cloud and on-premise. The cloud segment is the fastest-growing segment and is anticipated to register a high CAGR during the forecast period. The segment growth is attributed to the wide adoption of server virtualization in cloud computing to enhance easy access to cloud platforms and allow multiple applications by users.

The rapid introduction of advanced cloud technology and the increasing shift of enterprises toward cloud-based services such as Google Cloud, Azure, and Amazon Web Services present key factors fueling the segment. The growing demand for private cloud server is expected to further boost the segment.   

Large enterprises segment to hold a sizeable market share

In terms of organization, the global server virtualization market is bifurcated into small & medium enterprises and large enterprises. The large enterprises segment accounted for a large market share in 2021 and is expected to hold a sizeable market share in the coming years. The segment growth is attributed to the wide use of server virtualization among large business organizations as it helps in handling massive computing networks and easy backup processes for disaster recovery.   

IT & telecommunication segment to register a considerable CAGR

On the basis of end-user, the global market is segmented into BFSI, healthcare, IT & telecommunication, government & public sector, transportation & logistics, manufacturing, and others.

The IT & telecommunication segment is projected to register a considerable CAGR during the forecast period due to the rapid expansion of the IT & telecom industry, especially in developing countries such as China and India. Using server virtualization helps organizations to enhance their IT operational efficiency, reduce energy consumption, and minimize overall operational costs.

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North America to dominate the market

In terms of region, the global server virtualization market share is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America constituted a sizeable market share in 2021 and is expected to dominate the market during the projected period.

The regional market growth is largely attributed to the early acceptance of advanced technology among businesses and the presence of key global players in the region. The rising demand for software-defined data centers and increasing adoption of Software as a Service (SaaS) among large-sized businesses in the region further boosts the regional market.  

The market size of Asia Pacific is projected to register a substantial CAGR during the forecast period owing to the increasing adoption of advanced server solutions to mitigate cyber threats in organizational networks. The massive increase in enterprise investment to strengthen their IT infrastructure and rising access to data centers among business clients is another key driver propelling the regional market.   

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