[Research Report] The data center automation market size is expected to grow from US$ 7.53 billion in 2022 to US$ 28.79 billion by 2030; it is estimated to grow at a CAGR of 18.3% from 2022 to 2030.
Data Center Automation Market Analyst Perspective:
Data center automation is expected to witness significant growth in the forecasted period as analytics, social networking, cloud computing, and mobile computing are growing continuously. Around 80% of the data produced worldwide is unstructured, which includes unprocessed audio, video, and text from different sources, such as blogs and social networking sites. This continuous production of data is raising the need for more data centers worldwide. However, manually handling of this enormous amount of data may lead to a high probability of error. Thus, to handle this large amount of data, the need for automation in data centers is increasing, driving the growth of the data center automation market during the forecast period.
Data Center Automation Market Overview:
Data center automation is the process through which routine workflows and processes of a data center, which includes scheduling, monitoring, maintenance, application delivery, and others, are managed and executed without human administration. Data center automation helps to increase agility and operational efficiency, further raising its demand in the market. In addition, it also helps to reduce the time IT needs to perform routine tasks, further enabling them to deliver services on demand in a repeatable, automated manner. Furthermore, it also helps to deliver insight into server nodes and configurations, automates routine procedures such as patching, updating, and reporting, produces and programs all data center scheduling and monitoring tasks, and enforces data center processes and controls according to government standards and policies.
Strategic Insights
Data Center Automation Market Driver:
Growing Cloud Computing is Fueling the Growth of Data Center Automation Market
The pandemic led to a huge cloud computing growth spurt, because of which the cloud has become the foundation for all emerging technology. According to IBM, around 2.5 quintillion bytes of data are created every day. In addition, approximately 90% of the data in the world today has been created in the last two years. Due to this regular increase in the amount of data generated, companies are moving to cloud storage to secure and utilize this data. Also, the massive data generation is raising the demand for low-cost data storage solutions across enterprises, which is expected to create a significant opportunity for the growth of the data center automation market during the forecast period.
Moreover, the growing digitization worldwide is leading to an increase in the volume and speed of data generation. This is further increasing the adoption of cloud across both large and small businesses due to the increasing need for agility and flexibility for accelerating innovation and disruptions from competitors. In addition, the continuous increase in data traffic is further raising the demand for cloud data storage, fueling the growth of the data center automation market. According to Ericsson, the mobile data traffic is expected to grow strongly in the coming years, particularly due to the growing adoption of 5G. At the end of 2022, the 5G’s share of mobile data traffic was 15%, which was an increase from 9% at the end of 2021. This share is further expected to grow to 66% in 2028.
Furthermore, large enterprises continue to invest their resources in IoT, as they are increasingly utilizing the technology as part of their business plans by rapidly revamping their IoT plans and executing long-term IoT deals. With this technology as part of their business plans by rapidly revamping their IoT plans and executing long-term IoT deals. With this continuous increase in the adoption of IoT worldwide, there will be an accumulation of vast piles of data, raising the demand for cloud data storage. Thus, all the above factors are leading to the production of large amounts of data, raising the demand for cloud computing, further propelling the growth of the data center automation market.
Data Center Automation Market Segmental Analysis:
Based on application, the data center automation market is segmented into IT and telecom, government, manufacturing, healthcare, energy and utilities, retail, and others. The IT and telecom segment held the largest data center automation market share in 2022 and is anticipated to register the highest CAGR during the forecast period. Telecommunications has become a universal and indispensable part of daily life, connecting people and businesses across the world. With the consequent increase in data consumption and innovative technologies, the IT & telecom industry demands an effective and efficient data storage and processing approach. Thus, the increasing amount of data is raising the demand for data centers worldwide, fueling the growth of the data center automation market. In addition, the IT industry is constantly developing new data center automation software to enable businesses to adopt digital solutions for seamless operations. Also, telecommunication service providers are experiencing a huge amount of data generation due to the rise in internet access, which is fueling the need to adopt data center automation software for data management and storage. Thus, the continuous production of large amounts of data in data center automation software is fueling the growth of the data center automation market.
Data Center Automation Market Regional Analysis:
North America is expected to witness significant growth in the data center automation market in the forecasted period. This is due to the growing technological advancements and continuous production of large amounts of data, which is raising the need for more data centers in the region. The US has over 5x more data centers than any other country. It has around 2,701 data centers, which is continuously growing due to the construction of new data centers. In Q1 of 2023, the construction of the Elk Grove Village Data Center Campus project started in Illinois, US. The aim of the project is to become a worldwide destination for high-tech companies and manufacturers. The project is expected to be completed in Q3 of 2026. Similarly, the construction of the Atlanta Data Centre project has started in Q1 of 2023 in Georgia, US. It is expected to finish in Q1 2024. Thus, such a growing number of data centers in the region is expected to propel the growth of the data center automation market in the forecasted period.
Furthermore, the availability of high-speed connectivity, an increase in cloud adoption, and a surge in connected devices are driving the growth of IoT in the region. Also, the rapidly emerging 5G technology is raising the demand for edge computing in North America. According to the IoT—Spring 2022 report, released in May 2022, the market for the Internet of Things is expected to grow by 18% to reach 14.4 billion active connections. Further, the number of connected IoT devices is expected to reach 27 billion by 2025. With more IoT devices connected, the adoption of edge computing solutions will also grow in North America in the coming years, which will further propel the growth of the North American data center automation market.
Data Center Automation Market Key Player Analysis:
ABB, BMC Software, Inc., Cisco Systems, Inc., Dell Inc., FUJITSU, Hewlett Packard Enterprise Development LP, Juniper Networks, Inc., Microsoft, Micro Focus, and VMware, Inc. are among the key data center automation market players. This data center automation market is focused on continuous product development and innovation.
Data Center Automation Market Recent Developments:
Inorganic and organic strategies such as product launches, partnerships, collaboration, and mergers and acquisitions are highly adopted by companies in the data center automation market. A few recent key market developments by these data automation companies are listed below:
- In August 2022, ABB announced that they had signed a Memorandum of Understanding (MoU) agreement with ATS Global to extend the reach of their ABB Ability Data Center Automation (DCA) business. Under this agreement, ATS will work with ABB to combine expertise and resources, testing the advantages and effectiveness of potential collaborations for data center customers and growing their respective businesses. This will also help the companies to strengthen their distribution channels, improve industry knowledge and increase lead generation.
- In October 2022, Augtera Networks announced that they are collaborating with AMD Pensando DPUs to bring purpose-built Network AI to next generation data centers. This collaboration will further help the company to expand its market reach.
- In January 2023, Micro Focus announced the opening of a new data center in the UK. With this, the UK customers will be able to access IT Operations Management (ITOM) software as a service (SaaS) solutions from their local data center, which complies with local data residency regulations, including data security, privacy, storage and transfer.
- In May 2023, NVIDIA announced its collaboration with SoftBank Corp. to power SoftBank’s Next-Gen Data Centers using Grace Hopper Superchip for Generative AI and 5G/6G. Thus, with this collaboration, SoftBank plans to roll out new, distributed AI data centers across Japan.