Healthcare Virtualization Markets to Grow by Billions to 2020

Healthcare virtualization is a growing trend across the industry as providers seek smarter data storage and infrastructure tools.

By Jennifer Bresnick

- The virtualization of the healthcare indsutry’s rapidly expanding data storage infrastructure will be a major driver for economic growth in the next few years, according to a series of new market reports. 

Healthcare virtualization

From data center colocation to infrastructure-as-a-service (IaaS) offerings, healthcare’s move to more compact, convenient, and lower-cost storage solutions will see a significant uptick over the next few years.

Growing demand for more nimble disaster recovery and data delivery will be a primary force behind the expansion of the IaaS industry, says a global, cross-industry ReportBuyer study.  The overall IaaS market is predicted to grow from $15.75 billion in 2015 to $56.05 billion in 2020, representing a compound annual growth rate (CAGR) of 29 percent.

Managed hosting solutions, including data security solutions, will provide a majority of the growth, the report states. 

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  • “As the roles of hybrid cloud, virtualization, and hosted services are evolving, the IaaS market is set to offer tremendous opportunities for growth in the next five years. The generation of huge data by the organizations is binding industries to adopt IaaS solutions and the organizations are also focusing more on their core operations, rather than being worried about the IT infrastructure maintenance.”

    Desktop virtualization is another area ripe with opportunity for vendors and providers.  As healthcare organizations look for less expensive ways to engage in big data analytics and easy storage and retrieval of massive volumes of electronic health record data, virtualization offers lower costs, easier maintenance, and improved data access capabilities.

    The desktop virtualization market is slated to grow at a 54.59 percent CAGR until the end of the decade, says Research and Markets, spurred on largely by North American clients, who will comprise 65 percent of the market.

    Healthcare will make up 12 percent of the growth, the report says, following in the footsteps of financial service industries like banking and insurance.

    Healthcare organizations will also be instrumental in the data center colocation space, helping to bring an estimated 16.1 percent CAGR to that market segment.  Colocation services will increase in value from $25.7 billion in 2015 to $54.13 billion in 2020, as organizations seek to ease the pressures of physical space constraints.

    “The major forces driving the data center colocation market are increasing adoption of cloud computing, reduction in capital expenditure, and improvement of disaster recovery capabilities. Increasing penetration of cloud has introduced the concept of hybrid platform, including cloud and traditional colocation that eases the storage and management of organizations' data,” the MarketsandMarkets report explains. “Moreover, colocation services help organizations in cost optimization and in effectively managing their processes, such as disaster recovery and safe backup system.”

    “Benefits of reduced power, cooling cost, and reduced total cost of ownership of large data facility are some of the benefits provided by the wholesale colocation, thereby, increasing its market growth during the forecast period. It also manages additional responsibilities for the management in terms of power needs, services, and support, which are increasing its popularity in the data center colocation market.”

    A previous MarketsandMarkets report also forecast significant growth in the data center power market.  Power needs gobble up half of the costs involved in running a data center, and the market for efficient power solutions is likely to increase from $12.30 billion in 2015 to $20.44 billion by 2020.