Data Center Automation Market Size, Share & COVID-19 Impact Analysis, By Component (Solutions, Services), By Enterprise Type (SMEs, Large Enterprises), By Data Center Type (Enterprise or On-premise Data Center, Colocation or Managed Data Center, Public Cloud Data Center), By End-user (BFSI, Retail & e-commerce, IT and Telecommunications, Government & Public sector, Energy & Utilities, Manufacturing, Healthcare, Others), and Regional Forecast, 2022-2029

The data center automation market size was USD 7.40 billion in 2021 and is projected to grow from USD 8.49 billion in 2022 to USD 27.35 billion by 2029, exhibiting a CAGR of 18.2%. North America accounted for a market value of USD 3.62 billion in 2021.

Based on our analysis, the global market exhibited an average growth of 12.87% in 2020 as compared to 2019. In our market study, we have considered various data center automation solutions offered by the market players, such as Microsoft Corporation’s Microsoft Focus Data Center Automation, Microsoft Azure Data Center, Cisco Systems Inc.’s Cisco UCS Manager, Cisco UCS Central, and Cisco UCS Performance Manager, among others. In addition, our study covers Dell Inc.’s Dell EMC (data center consolidation, migration) and SDDC (software-defined data center), among others.

The global data center automation market growth can be attributed to several factors such as the rising adoption of cloud, video streaming platforms, social media, and the Internet of Things (IoT) devices across enterprises. In addition, the emergence of the 5G network and increased demand for improved data center performance in response to the rising data volume create ample market growth opportunities.

COVID-19 IMPACT

Emergence of the COVID-19 Pandemic Increased the Investment in Development of Data Center Infrastructure

The COVID-19 pandemic accelerated the adoption of digital services, such as contactless payments, e-payment, online banking, e-commerce, and others, resulting in the generation of huge amounts of data. Similarly, work-from-home and social distancing increased internet traffic. They created huge demand for data center smooth connectivity, networking, and computing power for offering collaborative software for organizations and maintaining data safety and security. Thus, data center automation solutions gained traction during the crisis to manage the data centers during social distancing and lockdown periods.

A surge in demand for e-commerce services, consumer cloud services, and online collaboration tools sharply increased cloud infrastructure consumption, aiding all the major cloud providers. For instance –

•  In June 2020 - Microsoft Corporation announced an emergency plan to expand server capacity in its data centers across the most affected regions.

However, the COVID-19 pandemic surged data center investment led by Microsoft, AWS, and Google, extending up to USD 37 billion in the third quarter of 2020. Since the pandemic's start, cloud providers such as Amazon Web Services (AWS), Microsoft, Google Cloud, and Alicloud platforms have grown their revenues ranging from 25% to 100%.

The increasing investment by prominent market players to develop data centers worldwide in response to the COVID-19 pandemic is anticipated to drive the data center automation market in the coming years. For instance,

• October 2022 - Hiranandani Group announced a plan to develop the first hyper-scale data center in its Greater Noida Data Center Park to foster digital transformation in the region. 


• March 2022 - Alibaba Cloud introduced a data center in South Korea as part of an expansion plan in Asia Pacific. Further, the investment is driven by the strong need for digital transformation across the country.

Thus, such growing funding and spending are projected to create substantial market opportunities for data center automation solutions.

LATEST TRENDS

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Rising Number of Green Data Centers to Act as a Key Trend

Data centers consume around 1% of global electricity demand and contribute to around 0.3% of all carbon dioxide emissions, according to the Environmental Investigation Agency in 2020. Also, the data centers utilize more than 3 to 5 million gallons of water per-day. In addition, as per the Central Statistics Office of Ireland report in 2021, data centers consumed 32% more electricity than in 2020. This high electricity consumption reduction has propelled the demand for green data centers.

Several leading key players are investing in green data centers to reduce carbon emissions and maintain sustainability. For instance,

• In 2021, Microsoft Corporation planned to have all its data centers running on 100% renewable energy by 2025.


• Also, in 2021, Meta Inc. planned to build a green data center to minimize electricity usage.


• In October 2022, PhonePe launched a green data center in India that leverages technologies of NTT Corporation and Dell Technologies Inc.

DATA CENTER AUTOMATION MARKET DRIVING FACTORS

Surge in Volume of Data to Fuel Data Center Automation Market Growth

The rise in the adoption of the Internet of Things (IoT) devices, social media, and smartphones and growing internet penetration generate huge volumes of data per second. For instance,

As per the NASSCOM report, the number of IoT devices generating 79.4 zettabytes of data will reach approximately 75 billion in 2025. The massive volume of data creates demand for data center infrastructure worldwide, which is expected to drive the growth of automation solutions across the data center.

Similarly, the pandemic highlighted the importance of automation in the data center's day-to-day operations. In response, companies invest more in automation and robotics than ever. Automation solutions enable the data center operators to deliver IT services faster and boost their productivity by eliminating manual tasks. For instance,

• October 2022 - Augtera Networks partnered with AMD Pensando DPU to automate the data center. The partnership aims to implement network AI in AMD's fourth-generation data center.

The constant data generation and use of advanced digital technologies across all industries, including healthcare, BFSI, manufacturing, and retail & e-commerce increase the need to develop sustainable and hyperscale data centers and servers. For instance,

• May 2021 - according to the U.S. International Trade Commission (USITC), the number of data centers in the U.S. reached 2,600. In addition, as of January 2021, there were around 8,000 data centers globally.

RESTRAINING FACTORS

Lack of Skilled Professionals Hinder the Market Growth 

With innovations flooding the market, having employees skilled in maintaining and programming advanced technologies is essential. When addressing skill shortage, the data center skills gap is broadening.

According to an Uptime Institute report, as of April 2021, more than half of data center operators are struggling to recruit staff. In addition, the number of employees required to operate global data centers is expected to increase from 2 million in 2019 to about 2.3 million in 2025, so that number is expected to increase further.

Similarly, as per AFCOM’s study, 76% of data center professionals actively try to entice young employees into their organizations. In addition, they are offering free education, remote working options, gym memberships, and meal accounts.

The increased demand for skilled professionals is driven by the projected growth of cloud or internet giants and the increasing capacity of colocation data centers in Southeast Asia, China, Australia, and other APAC countries.

According to AFCOM’s 2021 State of the Data Center Report, most respondents faced difficulties in hiring or recruiting at least some types of skilled professionals. According to the survey, 29% of respondents faced challenges recruiting cloud professionals, and 26% respondents stated they faced difficulties recruiting data center facilities, engineering, and technicians. Besides, 25% of respondents reported difficulties finding the right talent for network security, IT and data center management, and DevOps.

Thus, lack of skilled professionals restricts the market growth.

SEGMENTATION

By Component Analysis

Solutions Segment to Lead Backed by the Introduction of Data Centers

In terms of component, the data center automation market is classified into solutions and services.

The solutions segment held the largest share in 2021 and are anticipated to grow with a remarkable CAGR during the projection period. The services segment is expected to grow with maximum CAR during the projection period owing to the rising demand for managed services and technological advancement with the growing technology. New product launches and product enhancements surge the demand for automation solutions among enterprises.

• October 2020 – Cisco launched a software-delivered solution built to streamline IT operations across multi-cloud environments and on-premise data centers. Thus, the introduction of solutions is expected to fuel market growth.

By Enterprise Type Analysis 

Large Enterprises to Hold Major Market Share Owing to Deployment of Automation Solutions to Monitor Hyper Scale Data Centers

Based on enterprise type, the market is divided across SMEs and large enterprises. The large enterprises segment is expected to hold a major market share during the projection period due to the rising adoption of automation solutions to manage and monitor complex and hyper-scale data centers. SMEs segment is expected to grow with maximum CAGR during the forecast period owing to the increased adoption of data center automation technology.

As per Zapier’s 2021 State of Business Automation Report, 90% of respondents stated that automation improved employees’ lives in enterprises or workplaces. 88% of small enterprises stated automation helps them to compete with large organizations. This factor indicates that SMEs are expected to fuel the adoption of automation solutions across the data center.

By Data Center Type Analysis

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Public Cloud Data Center Segment to Grow Backed by Robust Investments in Development of Data Centers

Based on data center type, the market is divided into enterprise or on-premise data center, colocation or managed data center, and public cloud data center.

Among these, the public cloud data center segment is expected to grow with maximum growth rate owing to a surge in demand for cloud computing technology and its capabilities, such as cost-effectiveness, ease of installation, and remote access to data.

The growing investment to build cloud data centers is expected to fuel market growth. For instance,

• April 2022 –  Google announced spending of USD 9.5 billion on building a cloud data center.

By End-user Analysis

Healthcare Segment to Lead Backed by Rising Adoption of Emerging Technologies

Based on end-user, the data center automation market is divided into BFSI, retail & e-commerce, IT & telecommunications, government & public sector, energy & utilities, manufacturing, healthcare, and others.

The adoption of technologies such as virtual reality, the Internet of Things, and wearable technologies across healthcare spurred the demand for better data center networking capacity, computation power, and storage space.

Further, the rising adoption of online payments, contactless payments, and net banking increased the demand for secure data center infrastructure across the BFSI industry. The rapid adoption of industry 4.0 emergence of autonomous vehicles and self-driving cars generates huge volumes of data every second, which creates demand for data center automation solutions in the manufacturing industry.

• November 2021 - Daimler, A German Car Maker, selected Norway-based Green Data Center, Lefdal Mine. The shift to green data centers aims to transfer high-performance computing workloads for automated driving technologies and designing vehicles.

REGIONAL INSIGHTS

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Geographically, the market is divided into five major regions, North America, South America, Europe, the Middle East & Africa, and Asia Pacific.

North America dominated the Data Center Automation Market with a share of 48.92% and was valued at USD 3.62 billion in 2021. North America held the maximum market share due to the presence of largest data centers and rapid adoption of automation technology across organizations. For instance, according to Statista, North America had 3,009 data centers as of January 2022. The U.S. and Canada had 2,701 and 308 data centers, respectively. The increased adoption of IoT devices, smart home devices, and wearable technology across the U.S. generates a huge volume of data and creates demand for data center automation to eliminate manual tasks and accelerate operations.

• August 2022 – Jazz selected Juniper Networks to deploy Juniper Apstra System to deliver Intent-based Networking (IBN) abilities. The company aims to upgrade its existing architectural approach using data-driven insights, automation, and assurance to simplify operations and advance user experience.

Europe is expected to hold a significant market share during the forecast period due to the presence of major data centers across Germany, the U.K., the Netherlands, and France. The government's efforts to build green data centers and achieve sustainability create new market opportunities in the region. The European Union’s Climate Neutral Data Centre Pact aims to make the region the first climate-neutral continent globally by 2050.

• March 2022 – Cisco launched Secure Access Service Edge (SASE) data centers in Sweden and Denmark (Northern Europe) for security customers. Further, in March 2021- Cisco launched a data center in Germany to help customers using its platform, Webex, in the European Union (EU) and Russia region.

Asia Pacific is expected to hold the maximum CAGR during the projection period. The surge in investment by key market players to develop cloud and colocation data centers is anticipated to create new market opportunities for growth. For instance,

• October 2021 – Alibaba Cloud launched two new data centers in Thailand and South Korea. The new data centers aim to assist local businesses in their digital transformation journey.

The Middle East & Africa is anticipated to show potential market growth in the coming years.

• September 2022 - Google Cloud collaborated with Saudi Aramco to introduce a data center in Saudi Arabia. The partnership aims to distribute cloud services across the country.

Similarly, the Digital Oman 2030 strategy, Qatar National E-Health & Data Program, Saudi Arabia’s e-Health strategy, Qatar's Smart educational platform, and Kuwait's First Virtual Clinic, among others are expected to fuel rapid digital transformation across the region. This factor is projected to boost the growth of corporate, government, healthcare, and education industries across the region.

South America is projected to exhibit steady growth during the forecast period. However, the COVID-19 pandemic accelerated foreign direct investment across the region. The emergence of new data centers across Brazil and Argentina is expected to propel the demand for data center automation solutions in the region. For instance,

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November 2021 - Tencent Cloud launched a data center campus in Brazil to provide reliable, secure, and high-performance cloud services for clients in Brazil.

KEY INDUSTRY PLAYERS

Market Players to Drive Merger and Acquisition Strategies to Expand their Shares

Prominent players operating in the global market focus on expanding their global presence and market share through merger and acquisition strategies. These companies aim to acquire small and local firms to expand their business presence.

List of the Key Companies Profiled in Data Center Automation Market:

• Microsoft Corporation (U.S.)


• Cisco Systems Inc.(U.S.)


• Micro Focus (U.K.)


• IBM Corporation (U.S.)


• Fujitsu (Japan)


• Broadcom (U.S.)


• BMC Software, Inc. (U.S.)


• Dell Inc. (U.S.)


• Arista Networks, Inc. (U.S.)


• ABB (Switzerland)

KEY INDUSTRY DEVELOPMENTS:

• October 2022: Cisco invested in a dedicated India Webex infrastructure that included a new data center and necessary regulatory licenses to accelerate Webex adoption.


• October 2022: Kyndryl, the IT infrastructure services provider, Microsoft Corporation, and Dell Technologies launched a hybrid cloud solution built to support customers in mainframes, data centers, and remote environments.


• September 2022: Juniper Networks introduced the Apstra extension for enhanced adaptive data center management and automation. Alongside this launch, Juniper also revealed a revamped Apstra licensing model, presenting clients with a choice of three licensing tiers and the flexibility to upgrade as needed.


• August 2022: ABB collaborated with ATS Global, a solution provider for smart digital transformation, to extend its reach for the data center automation business. Both companies will work together to combine resources, test the effectiveness and advantages of potential collaborations for data center customers with ABB Ability and grow their respective businesses.


• August 2022: Arista acquired software-defined networking provider Pluribus Technology. Through this acquisition, Arista aims to enhance the next phase of the Converged Cloud Fabric offering for next-generation, telco/cloud, and smart edge applications.

REPORT COVERAGE

An Infographic Representation of Data Center Automation Market

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The data center automation market report provides a detailed market analysis. It focuses on key aspects such as leading companies, software types, and leading software and services applications. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.

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