According to the latest 'Software-Defined Computing Software Market Semi-Annual Tracking Report' released by IDC, the market size of China's software-defined computing software market reached USD 1.95 billion in 2023, an increase of 12.7% year-on-year. Among them, the scale of virtualization software market, cloud system software market and container infrastructure software market reached USD 730 million, USD 760 million and USD 460 million respectively. IDC predicts that by 2025, China's software-defined computing market will become the world's second largest market after the United States.

Software-defined computing software market defined by IDC mainly includes three sub-markets: virtualization software, cloud system software (software that abstracts and controls server resources, builds cloud infrastructure represented by OpenStack and CloudStack) and container infrastructure software (including container engines, orchestration systems, and registries, etc.). They constitute the software-defined computing platform that supports traditional and cloud-native applications, and are irreplaceable and most important infrastructure software for building cloud computing platforms.

In 2023, the software-defined computing software market had a continuous slowing growth rate. From a global perspective, negative factors such as economic recession, inflation, geopolitical tensions and supply chain disruptions have affected the overall market recovery. From the domestic market point of view, the comprehensive recovery of the economy takes time, and some companies are still cautious about spending. With the continuous consolidation of China's economy's continuous recovery and improvement, international institutions have raised their expectations for China's economic growth. IDC predicts that the growth of the software-defined computing market will gradually recover in the next two years and rebound. IDC predicts that the compound growth rate of the Chinese software-defined market will reach 14.8% in the next five years, and the market size will reach USD 3.9 billion by 2028.

IDC believes that the main driving forces for the future development of this market are: 1) the continued digital transformation of traditional industries; 2) the demand for multiple computing infrastructures and the preference of local vendors; 3) the development of new technologies and scenarios based on cloud architecture, such as AI, IoT, edge computing, etc. The development of generative AI and large models will bring new opportunities to this market; 4) the cloud-native architecture is widely promoted and accepted.

In 2023, the development of generative AI and large models, which are the hottest topics, will bring new opportunities for the software-defined computing software market. Today, Kubernetes has become the default choice for AI applications due to its openness and modern feature set. IDC data shows that early adopters of AI plan to use AI in various locations and infrastructures. Managing Kubernetes with different scales and positions will be the key to integrating highly distributed AI ecosystems. In the next decade, enterprises will build a large number of generative AI applications, which will result in huge consumption of computing resources and the emergence of many new workloads and applications. As these are all new constructions, most of these new AI applications will be built on top of container and Kubernetes modern infrastructure. Generative AI will promote a significant increase in the number of container and Kubernetes clusters, thereby bringing new revenue to the software-defined computing market.

Market pattern:

The top five vendors have corresponding products in all three sub-markets:

Huawei maintains good growth based on its deep accumulation and influence in governments and large enterprises, and has also vigorously expanded into finance, energy and manufacturing industries in recent years. New intelligent computing centers across the country have also become a new driving force for Huawei's performance growth.

New H3C actively establishes and expands its channel and partner system, and has achieved some success in expanding small and medium-sized customers based on expanding industry clients.

VMware's growth in the Chinese market has continued to slow down in recent years. After being acquired by Broadcom, there will be major changes in its product portfolio, business model, and partner system, bringing more uncertain factors for future development.

Inspur helps governments and large enterprises carry out digital transformation, and continuously upgrades its capabilities in areas such as one-cloud-and-multi-core, multi-computing-power scheduling, and application modernization, expanding new industries and customers.

Alibaba (accounting only for Alibaba Cloud's proprietary cloud product computing module revenue) is deeply cultivating finance and government-enterprise, and has gained large projects in multiple industries.

In addition to large-scale vendors, there are some innovative vendors in each sub-market who have performed well. For example, in the virtualization market, Cloud Hong has achieved good growth in the financial industry; in the cloud system software market, ZStack has gained opportunities in large and small customers based on its product features and partner system; in the container infrastructure market, Boyun still maintains its customer accumulation and advantages in the financial sector, and is constantly expanding new industry customers through partners.

IDC's Assistant Research Director in China, Zhao Li, believes that although the development of the software-defined computing market will be significantly affected in 2023 due to the internal and external environment, the recovery of the Chinese economy and the development of the digital economy will bring new growth drivers for the construction of government and corporate digital infrastructure and cloud platforms. IDC predicts that the Chinese software-defined computing market will become the world's second largest market after the United States by 2025.