COMPOSABLE INFRASTRUCTURE MARKET ANALYSIS

Market Size and Trends

The composable infrastructure market is estimated to be valued at US$ 5.39 Bn in 2024 and is expected to reach US$ 19.00 Bn by 2031, growing at a compound annual growth rate (CAGR) of 19.7% from 2024 to 2031.

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Enterprises are increasingly adopting composable infrastructure solutions to reduce capital expenditure and improve infrastructure utilization. Composable infrastructure allows dynamically assembling and disassembling infrastructure resources based on application demands. This enables optimized allocation of pooled resources and improves infrastructure efficiency. Further, composable infrastructure aids flexibility and agility by rapidly provisioning, re-provisioning and upgrading infrastructure. The ability to integrate existing hardware with software-defined infrastructure is also driving adoption. The market is expected to be positively impacted by the rapid growth in data volumes and infrastructure virtualization across industries.

Market Drivers: AI and Automation Spur Need for Composability

Over the past decade, organizations have invested heavily in adopting new technologies like artificial intelligence, machine learning, automation, and others to enhance their operations. While these technologies promise benefits, they have also created new challenges for businesses. As organizations deploy disparate systems and applications to gain specific capabilities, their existing IT infrastructure has become complex with many isolated silos housing different workloads. This makes the management of the infrastructure inefficient and costly. It also impacts the ability of businesses to leverage these new technologies together and extract further value.

Composable infrastructure is emerging as a solution to address these challenges. With a composable approach, organizations can break away from rigid, fixed hardware configurations. Instead, they get flexibility and agility to deploy the exact resources - compute, storage, and networking - that are required for different workloads on demand. This allows workloads and applications to be automated and orchestrated in a simple and automated manner. It enables new capabilities to be added without significant disruption to existing environments. The infrastructure can also adapt in real-time as business and technology needs change. This is especially useful considering how Artificial Intelligence and automation projects involve constant experimentation, testing and optimization. With composable infrastructure, resources can be incredibly responsive to these dynamic needs. IT teams have visibility into the entire infrastructure and can monitor, analyze, and improve resource utilization over time. This helps maximize investment in tools that drive modernization in a cost-effective way.

Market Concentration and Competitive Landscape

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It has become imperative today for enterprises of all types and sizes to digitally transform their business models and operations. This recognizes how digital technologies now underpin interactions with customers, business processes, product/service design, and overall competitiveness. Forward-looking organizations have drawn up aggressive strategies around cloud, mobility, Internet of Things, analytics, and others to remain relevant in disrupted industry landscapes. However, traditional IT infrastructure models have not kept pace with these dynamic digitalization goals. Legacy setups comprise fragmented, siloed, and inflexible environments that inhibit modern workloads and innovation. They are also expensive to scale up or reconfigure on demand.

Composable infrastructure offers an optimized approach purpose-built for enterprise digital transformation strategies. With resources that can be allocated and automated in software to changing needs, it allows IT teams to deliver the right infrastructure exactly when and where applications require it.

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Legacy infrastructure poses issues as organizations have sunk costs in traditional rigid systems that are difficult to replace. Additionally, integrating composable solutions can be complex and requires significant changes to workflows. Security is also a concern as this new, flexible approach may introduce vulnerabilities if not implemented carefully. Adoption requires IT teams to learn new skills to manage pools of dynamic resources rather than static systems. For many organizations, the upfront costs of migrating to composable infrastructure are seen as prohibitive despite longer term savings and benefits.

Market Opportunities: Edge & 5G network expansion

As organizations shift to scale applications up or down on demand, composable solutions allow for optimal resource utilization and efficiency. This improves capabilities for rapid application development and deployment. Composable infrastructure facilitates innovation through agility, enabling IT to keep pace with business needs.

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In terms of type, hardware is expected to contribute 61.4% of the market share in 2024 owing to rapid technological advancements making hardware solutions more powerful and cost-effective. Continued improvements to processor efficiency and data storage density have significantly increased the capabilities of servers, storage arrays, and networking equipment while driving down costs. Leveraging modern chip architectures and distributed computing approaches, today's hardware delivers unprecedented levels of scale, performance, and flexibility to organizations. Composable infrastructure in particular aggregates hardware building blocks into shared pools of resources that can be accessed on-demand. This innovative approach streamlines procurement and maintenance while enabling practically limitless experimentation and adaptation as business needs evolve. Hardware vendors also offer open, standards-based platforms that integrate seamlessly with popular orchestration software. Together, the enhanced features and interoperability of modern hardware solutions empower organizations with highly scalable digital infrastructure that fuels innovation.

Insights By, Enterprise size- Large Enterprises Lead Adoption Due to Complex IT Requirements

In terms of enterprise size, large enterprises is expected to contribute 67.2% of the market share in 2024 due to their complex and demanding IT infrastructure needs. Large multinational corporations operate at a massive global scale with thousands of users, petabytes of data, and mission-critical workloads. Traditional rigid infrastructure silos struggle to keep pace with the pace of business for large enterprises, hindering agility and elasticity. With composable infrastructure, large enterprises gain unprecedented operational flexibility through shared pools of disaggregated hardware and software resources. This approach streamlines procurement and maintenance activities while supporting continuous experimentation, rapid service provisioning, and round-the-clock availability required by global operations. Large enterprises also benefit from the cost-effectiveness of composable infrastructure which right-sizes resources utilization and lowers overall IT capital and operational expenses proportionately to demand. The dynamic scalability and advanced automation of composable solutions are particularly well-suited to address the escalating complexities faced by large enterprises.

Insights By, Industry Vertical- IT & Telecom Drives Adoption Due to Data Explosion

In terms of industry vertical, IT & telecom is expected to contribute 29.4% of the market share in 2024 driven by the exponential growth of digital services and data volumes. As the backbone of the digital economy, the IT & telecom industry generates massive amounts of data each day from sources such as mobile network traffic, streaming content, cloud workloads, internet-of-things sensors, and others. Traditional datacenter architectures struggle to scale elastically enough to process this deluge near real-time. Leveraging composable infrastructure, IT & telecom organizations gain unprecedented flexibility to quickly increase compute and storage resources wherever and whenever demand spikes occur. They can also rapidly launch innovative edge services across fragmented infrastructure stacks. Composable solutions further enhance efficiency by optimizing resource utilization through hardware and software disaggregation. With cost pressures intensifying in competitive industries, composable infrastructure delivers an agile pay-as-you-grow model to IT & telecom that lowers CAPEX and OPEX significantly compared to fixed infrastructure stacks. These benefits make composable solutions particularly well-suited to fuel continued growth and innovation in the data-intensive IT & telecom vertical.

Regional Insights

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North America has established itself as the dominant region in the global composable infrastructure market. This region is expected to account for 47.3% market share in 2024. The presence of major tech giants and cloud service providers has propelled composable adoption in the region. The U.S. accounts for the largest share due to growing infrastructure modernization projects among enterprises. The demand for efficient management of rapidly increasing data workloads is fueling the need for composable infrastructure. Moreover, organizations across domains are implementing composable platforms to build agile, cost-effective solutions. The segment of hyper-scalers continues to invest heavily in building private cloud infrastructure with composability at the core. This is enabling them to respond faster to dynamic business demands. The increased focus towards optimizing resource utilization and reducing wastage has made North American enterprises proactively evaluate composable options.

Asia Pacific, on the other hand, has emerged as the fastest growing regional market for composable infrastructure. The digital shift across industries has accelerated infrastructure investments. Countries such as China, India, South Korea, and Australia are actively engaged in large-scale digital initiatives that involve modernizing legacy systems. This presents a huge opportunity for composable infrastructure providers.

In addition, both global as well as domestic cloud players have significantly expanded their hyperscale data center footprints across APAC. Their vision of supporting the region's burgeoning data workloads with agile infrastructure sits well with the promise of composability. The availability of favorable government policies in select nations is also advocating the adoption of new-age infrastructure methodologies like composable. Organizations of all sizes are looking to match the operational efficiency gains witnessed in mature markets through composability.

The openness to new technologies, growing emphasis on digital services industry and higher infrastructure investments collectively make APAC a natural next hotspot for the composable infrastructure market. The uptake is expected to accelerate extensively in the coming years as both technical parity and commercial maturity are achieved within regional supplier ecosystems.

Market Report Scope

Key Developments

• In March 2022, P Infusion, known for network simplification solutions for telecom and datacom companies, and Jabil Photonics, a provider of tailored design, manufacturing, and testing services for optical communication products, are introducing a new idea for Open Line Systems - the 400G ZR OLS
• In March 2022, Liqid, a company specializing in data center software, partnered with MemVerge is a software company specializing in memory-centric infrastructure solutions for data-intensive workloads. and Intel to introduce composable memory solutions for large-scale computing. This collaboration allowed MemVerge and Liqid to efficiently manage and coordinate both DRAM and Storage Class Memory (SCM).
• In June 2021, Petrobras unveiled the largest supercomputer in Latin America as part of its goal to achieve 40 petaflops of computing power by the end of 2021. Geophysicists and analysts use specially crafted algorithms for exploration projects, particularly in oil and gas development areas, to streamline production processes and significantly cut down on processing time.
• In December 2021, Liqid secured a USD 100 million Series C funding round led by Lightrock and DH Capital. The funding supports Liqid's Liqid Matrix software, which is utilized in building a USD 5 million supercomputer for the US National Science Foundation (NSF) and USD 52 million worth of supercomputers for the Department of Defense.
• In August 2021, Patrick Terminals, an operator of container terminals in Australia, enlisted the services of Vectec, a managed services provider based in Sydney, to enhance its IT infrastructure. Vectec implemented various solutions from Hewlett Packard Enterprise through the GreenLake edge-to-cloud platform to modernize Patrick Terminals' private cloud, storage, backup, and networking capabilities.

*Definition: The composable infrastructure market allows customers to build and modify infrastructure on demand through software. It provides the flexibility to dynamically compose optimal IT infrastructure by pooling together different compute, storage, and network resources. This enables organizations to respond faster to changing business needs through infrastructure that can be effortlessly automated, scaled up or down, and reconfigured through APIs and tools. Resources are pooled and allocated on-the-fly versus utilizing fixed-configuration servers, storage, and networking devices.

Market Segmentation

•  Type Insights (Revenue, US$ BN, 2019 - 2031)
  • Software
  • Hardware
•  Enterprise Size Insights (Revenue, US$ BN, 2019 - 2031)
  • Large Enterprises
  • Small & Medium Enterprises
•  Industry Vertical Insights (Revenue, US$ BN, 2019 - 2031)
  • BFSI
  • IT & Telecom
  • Retail & Consumer Goods
  • Healthcare
  • Manufacturing
  • Others
• Regional Insights (Revenue, US$ BN, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • South Africa
    • Rest of Middle East & Africa
• Key Players
  • Cloudistics
  • Dell EMC
  • Drivescale
  • HGST
  • HPE
  • Lenovo
  • Liqid
  • One Stop Systems
  • QCT
  • Tidalscale
  • DriveScale
  • TidalScale
  • OSS
  • Dolphin ICS
  • Inspur
  • Western Digital Corporation
  • Hewlett Packard Enterprise Development LP
  • Quanta Computer Inc.
  • Kaminario Flex.