The Virtualization Market in 2022

Virtualization is the use of software to create a virtual layer of computer hardware that mimics all the elements of the device, such as processors, memory, and storage capacity.

Using virtualization technology, a single computer can be divided into multiple, virtual computers that interact as separate devices with one another, commonly known as virtual machines (VMs). The virtual layer can mimic the original device or create an alternate version of a different device.

See below to learn all about the global virtualization market:

See examples of How Virtualization is Used by Nasdaq, Bowmicro, Nilkamal, Isala, University of Pisa, and AeC: Case Studies.

Virtualization market

The virtualization software market’s value was estimated at $38.7 billion in 2020. Expected to maintain a compound annual growth rate (CAGR) of 25.4% over the analysis period from 2020 to 2026, it is forecast to reach $149.4 billion by the end of it.

Regionally, the global virtualization software market is divided as follows:

  • The U.S. market had an estimated value of $17.6 billion in 2021
  • The Chinese market is forecast to reach $165 billion by 2026, with a CAGR of 27.2%
  • Japan and Canada are each forecast to grow at 19.4% and 24.1% over the period from 2020 to 2026
  • Within Europe, Germany has one of the highest CAGRs at about 21.4%

By industry vertical, the banking, financial services, and insurance (BFSI), IT, and telecommunications industries are expected to help drive virtualization demand.

Other notable industry verticals for virtualization include:

  • Education
  • Public safety
  • Health care
  • Manufacturing
  • Retail
  • Government

The shift from running applications directly on physical servers to using various virtualization techniques was gradual, but it helped boost IT efficiency and cut down on maintenance and costs. As more types of virtualization technologies are introduced to the market, the use of virtualization is expected to grow.

A survey by Spiceworks predicted an increase in application virtualization from 39% to 56% by 2021. Similar growth patterns were also predicted in data, server, and storage virtualization technologies.

“You can bet that organizations weighing the pros and cons of moving virtual workloads to a public cloud will search online for advice or reach out to trusted advisors who can lead the way,” writes Spiceworks in its 2020 “State of Virtualization Technology” report.

The market is seeing an “increasing adoption of many types of virtualization and a shift to software-defined and cloud-based technologies,” Spiceworks says.

See all about the Storage Virtualization Market.

Virtualization features

The concept of virtualization can be applied to many types of hardware and devices, creating a virtual version of them without needing the actual device present.

Here several key types of virtualization technology:

Storage virtualization

Storage virtualization makes a number of servers used for data storage appear as a single pool of storage for the software and systems accessing the storage. Virtualizing storage allows for more control and flexibility compared to physical storage.

It enables companies and enterprises to use whatever hardware resources they have for storage, without worrying about upgrading their servers when scaling.

Desktop virtualization

Desktop virtualization allows for the separation of the desktop environment and its applications from the physical device that end users access it through.

Virtual desktops enable users to access their desktops remotely, relying on the resources of centralized or outsourced hardware. Compared to traditional desktops, virtualized desktops are easier to deploy at a scale, while reducing overall costs and improving security.

Network virtualization

Network virtualization combines the hardware of multiple networks into one optimized virtual network, allowing for more efficient use of resources.

Application virtualization

Application virtualization separates computer applications from the hardware and operating system they are run on. Full virtualization of an app allows users to access it without the need to install it on their device.

This enables enterprises to centralize and optimize RAM and CPU on servers that host the applications, rather than optimizing every device individually.

Server virtualization

Server virtualization divides a physical server into a number of virtual servers that work independently from another in isolation. Each virtual server accesses different parts of the machine and can run a different operating system.

Server virtualization technology can drastically minimize costs, reducing the amount of hardware needed, by enabling the use of the same server for numerous applications.

Benefits of virtualization

Some notable benefits of virtualization technology include:

  • IT cost reduction
  • Efficient use of hardware resources
  • Minimized or eliminated service downtime
  • Supported business continuity
  • More effective disaster recovery (DR) response
  • Improved ecosystem responsiveness
  • High availability and resiliency

“Now, organizations can centralize data and applications in the data center, delivering virtual workspaces with improved manageability, security, and performance to every user in their organization, while reducing downtime and support costs,” says Anne Hecht for Forbes.

“IT can also easily manage large-scale virtualization deployments with end-to-end visibility of the organization’s infrastructure and proactive monitoring.”

Virtualization use cases

Here are several examples of how organizations in different industries are using virtualization:

Hall AG and Citynet

Hall AG is the primary provider of electricity, heating, and water services for the 13,000 residents of Hall, Austria. It relies on Citynet as the IT service provider to manage its internet connectivity and communications.

To support Hall AG in the data flood from its numerous digital systems and services, Citynet decided to use IBM Spectrum Virtualize HyperSwap in creating mirrored datastores, a high-availability storage platform.

“Using IBM FlashSystem built with IBM Spectrum Virtualize, we can run critical infrastructure services, including power plant control systems, reliably with unmatched performance and availability,” says Christian Vojak, project lead, Hall AG.

“With FlashSystem, we’ve got the flexibility to explore new technologies and configurations, including hybrid and multicloud deployments if we want.”

With IBM, Hall AG and Citynet were able to achieve a 40% reduction in power, cut management efforts by half, and triple the capacity of citizen services.

Department of Polytechnic and Community College Education

The Department of Polytechnic and Community College Education (DPCCE) is part of Malaysia’s Ministry of Higher Education (MOHE) that’s responsible for developing education systems for the country. DPCCE manages the education and training of 36 government polytechnics and over 100 community colleges in Malaysia.

DPCCE’s Learning Management System (LMS) handles traffic from over 100,000 students and 7,300 lectures across its educational facilities. In order to keep up with the increased demand, the department decided to move its LMS fully to the AWS cloud.

“Moving the CIDOS LMS to the AWS cloud is not just about virtualization of system resources for scalability. The key benefit is that you can have a fully managed system that gives you the attendant management and maintenance services to run and scale all of your workloads, services, and applications securely, 24/7,” says Tajul Azhar Mohd Tajul Ariffin, senior assistant director, MOHE.

Making the move to AWS, DPCCE was able to reduce costs by 30%, eliminate downtime in its various services, and optimize its resources toward education.

eSilicon

eSilicon is an application-specific integrated circuit (ASIC) developer that specializes in designing and manufacturing high-end semiconductors. It provides the materials used for 5G infrastructures, artificial intelligence (AI) applications, and networking projects.

Setting the goal to migrate its IC and engineering workflows to the cloud, it sought the help of Google Cloud and its partners, Citrix and Wipro. eSilicon was able to set up a virtual desktop application framework for its engineers’ development work.

“One of the great benefits of Google Cloud Platform is that we can co-locate our data centers in optimized settings, from Vietnam and Singapore to Belgium and Italy. We are using that footprint to improve latency management across our apps and engineering workflows,” says Naidu Annamaneni, CIO and VP of Global IT, eSilicon.

“Because we now only pay for the compute power and VMs we use, we know we’re not overspending. We have also removed traditional IT restraints with this new Google Cloud stack and the compute power. With Google Cloud, we can scale as needed to address the demands of our growing customer base.”

By collaborating with Google, eSilicon reduced VM management costs by up to 60% and was able to optimize workload management to simplify complex engineering tasks.

Virtualization providers

Some of the leading providers of virtualization software in the market include:

  • VMware
  • Citrix
  • Microsoft
  • Red Hat
  • Oracle
  • Dell Technologies
  • Datadog
  • AWS
  • Solarwinds Corporation
  • Google

Looking for a server virtualization product?: VMware: vSphere Review.

Anina Ot
Anina Ot
Anina is a writer who has been writing about security, privacy, cloud computing, and data science for the past three years. She believes technology exists to make lives easier, but many people are intimidated by highly technical topics. She started writing to make tech and privacy more accessible.

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