The software defined data center (SDDC) market (which combines software defined networking (SDN), software defined storage and software defined servers)) will grow from $396.1 million in 2013 to $5.41 billion in 2018, predicts MarketsAndMarkets, a research firm. That’s a compound annual growth rate (CAGR) of nearly 70 percent. But is that figure too optimistic?

According to the report:

“Major Tier 1 companies and numerous start-ups are getting into this escalating market for SDDC. The major forces driving this market are the innovations in processing power and memory, high demand for resource pooling, manual/custom networking configurations. There has also been a shift in the pricing models from hardware-based to software-based pricing along with the requirement for multi-tenancy support and vendor lock-in break downs. Companies providing virtualization and software defined solutions are looking forward to gain a better competitive advantage in this growing market, thereby creating new solutions and intelligent and integrated management platforms for the overall and integrated SDDCs.”

That’s a fancy way of saying customers want less-expensive, more flexible software to help manage converged data centers — servers, storage and networking blended together.

So what’s next? VMware (VMW), for one, is expected to more fully discuss its SDDC products and strategy during VMworld 2013 in late August. At the same time, VMware will launch its vCloud Hybrid Service at the conference, The VAR Guy has heard.

Still, dozens of companies are competing in the emerging SDN and SDDC markets. But it’s unclear how many channel partners are ramping up to focus on the new software management platforms and underlying hardware. 

MarketsAndMarkets sees big opportunities ahead. Now, it’s up to somebody to make SDN and SDDC a profit center for channel partners.