The global data center VOD market is projected to witness significant growth over the forecast period growing at a CAGR of over 12% by 2022. This surge in demand can be attributed to rising demand for on-demand content and HD programming. Several innovations in server technology are expected to boost market growth.
The global data center VOD market is estimated to reach over USD 6 billion by 2016. VOD service providers use data centers that are used to deliver, store, encode, and decode video content through broadcast, cable or telecom networks. Low-priced offers by several service providers to attract customers may drive the market over the next seven years.
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Increasing number of smart devices along with technological advancements in business models is expected to drive the industry. Further, several innovations in the connected TVs, smartphones, and tablets have led to a substantial increase in the demand for VOD. These factors have increased the data traffic volume along with increasing on-demand content including music, TV shows, videos, and movies.
The service providers offer content through service channels including iPTV, Direct To Home (DTH) and cable TV, which can be connected to several viewing systems such as portable devices, computers, and TVs. It offers flexibility and convenience to customers, allowing viewers to access content through various channels. It offers a high level of security along with reduced costs, which is projected to drive demand.
This technology offers scalability and redundancy, protecting against application and equipment failures as well as protection against data loss and corruption. It offers wide-area bandwidth savings, which is expected to offer significant avenues for enhanced end-user experience. Data centers have emerged significantly over the past few years, adopting technologies including virtualization for optimizing resource utilization along with increasing IT flexibility. Organizations are shifting their focus towards on-demand services, which is anticipated to accentuate the industry demand.
Video servers offer high processing power with real-time streaming capabilities along with networking abilities with other equipment. Further, they provide application features such as integrating graphics, inserting live inputs, advertisements, and branding, which are expected to trigger the data center VOD market demand over the forecast period.
Cloud computing is redefining the way many internet services are provided. Instead of building private data centers and buying several servers, it is feasible for the providers to use bandwidth and computing resources of cloud service providers. Several initiatives have been undertaken to reduce energy consumption by incorporating more efficient practices and technologies for minimizing environmental impacts. For instance, NetFlix offers unlimited online streaming videos for a monthly subscription at subsidized rates. Additionally, game-on-demand has a very strong growth potential and the service providers are expected to incorporate these features in their packages over the next few years.
However, inefficiency in streaming video content owing to limited bandwidth is expected hamper market growth over the next seven years. Further, privacy concerns and limited rights of content can act as a challenge for the industry growth.
The industry can be segmented into three main categories including VOD server, video server, and Storage Area Network (SAN). SAN uses the concept of combined shared and compute storage, thereby eliminating the requirement of separate storage array. It replaces the traditional storage form, offering higher performance and lower cost advantage.
North America is projected to be the dominant region owing to the availability of advanced technologies offering server virtualization for data-generation and business operations. Asia Pacific is expected to witness significant growth over the forecast period owing to the infrastructural advancements. Additionally, growing number of data warehouses and center retrofits in countries such as India and China are also expected to generate high-growth prospects
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Notable players in the industry include EMC Corp., Dell Inc., ARRIS Group Inc., NetFlix, LoveFilm, Google Inc., Huawei Technologies Co. Ltd., SeaChange International Inc., NetApp Inc., DirecTV, HP Co., Harris Corp., Cisco Systems Inc, Apple Inc., and Alcatel-Lucent SA.
In 2013, NetFLIX added streaming TV network to compete with network and cable television service. DirecTV released their online service platform called Play, which offers more than 5,000 on-demand content selection along with live streams of sports programming.