Global Disaster Recovery as a Service (DRaaS) Market - Growth, Trends, and Forecasts (2022 - 2027)

The Disaster Recovery as a Service (DRaaS) Market has registered a CAGR of 12.32% over the forecast period. Disaster Recovery as a Service (DRaaS) is generally utilized by organizations facing an event where recovery capabilities are quickly needed. Time-to-value concerns and ongoing care and feeding are essential considerations. The services typically include an on-demand recovery cloud for planned tests, exercises, and declarations; server image and production data replication to the cloud; automated failover and failback between production and the target cloud environment and recovery time service-level agreements (SLAs).

Key Highlights

• Initially, DRaaS solutions were considerably implemented by small businesses that didn't have secondary sites or were eliminating data centers to reduce costs. However, DRaaS is also preferred by larger organizations in the modern landscape, as providers have reported an increase in large and complex environments and the volume of servers per client. The drivers in the studied market include increasing data breaches and ransomware attacks, creating a need for robust data protection solutions, and reducing the operational cost of DRaaS solutions compared to traditional solutions.
• The players in the market are expected to increase market capture and reduce customer friction by offering enhanced onboarding options and additional capabilities in support of various recovery targets, platforms supported (i.e., beyond VMware and physical x86), and international aid and bolster DRaaS solutions with built-in add-ons like automated recovery testing and change management assurance.
• The DRaaS market consists of multiple players with varying abilities to support requirements. These can relate to workload types, geographies, scale, onboarding, ongoing support levels, the number of recovery point objective (RPO) and recovery time objective (RTO) options, and target recovery locations. The provider may deliver services as a fully managed, assisted-recovery, or self-service offering.
• On the other hand, customers may face problems if they are unaware of what they have in their data centers. They must be aware of their various IT assets and how their criticality translates into the service tiers of a DRaaS provider. The service provider's replication method generally gives different recovery periods at other price points. The most costly tier may offer workload recovery in seconds or minutes. In contrast, the mid-tier may offer a 4-to-8-hour enterprise workload recovery time, and the least expensive tier may offer a 24-to-48-hour recovery.
• A nationwide lockdown across the globe marked the pandemic, and the company employees have begun to work remotely. The increased dependency on the security of data measures was brought to light by several data breaches and an increase in cyberattacks. Furthermore, ransomware attacks have increased significantly during the pandemic, which has underlined the need for disaster recovery solutions to prevent downtime of systems that could result in severe losses for organizations.

Key Market Trends

BFSI Sector is Driving the Market

• The BFSI sector is poised to significantly adopt DRaaS solutions because financial institutions such as commercial banks and credit unions build their reputations around an ability to provide consistent and uninterrupted service to their customers. Any system downtime could damage these reputations and potentially lead to lost customers. The usage of DRaaS solutions could provide instant recovery of data, applications, and systems.
• Critical sectors, like banking, are expected to adopt cloud-based deployment of services increasingly. This is due to the IT sector's continuing quest for optimized infrastructure and the ability of solution builders to source application and infrastructure components from multiple providers to construct a hybrid cloud-based solution, thereby augmenting the studied market growth.
• Most financial institution-specific cloud recovery vendors will inspect and upgrade their cloud infrastructure to meet compliance, auditing, and financial sector standards. These regulatory modifications benefit smaller institutions that lack the resources to commit employee time to meet compliance criteria.
• To secure their IT processes and systems, secure customer critical data, and comply with government regulations, private and public organizations are increasingly focused on implementing the latest technologies to prevent cyber attacks. Also, with greater customer expectations, growing technological capabilities, and regulatory requirements, banking institutions are being pushed to adopt a proactive approach to security.
• Some of the most common malware attacks that the banking industry faces include signature-less and file-less malware, which does not behave like other malicious programs but can instead exploit native processes to hide their activities.

North America is Expected to Register the Fastest Growth

• The United States is one of the largest markets for DRaaS solutions globally. The country is the early adopter of digital transformation strategies that have led multiple end-users to become more vulnerable to cyber-attacks, creating a demand for a secure storage and recovery network. The country houses prominent players in the market, such as IBM, Recovery Point, Sungard Availability Services, etc.
• With such an increasing number of data breaches in the country, the public and private sectors are inclined to spend more on cyber solutions to study these attacks and take preventive measures. The recent US budget has endorsed USD 19 billion for cybersecurity-related initiatives. End-users in the region are refocusing on organizational resiliency and minimizing downtime; enterprises of all sizes are looking for off-premise ways to implement disaster recovery.
• Multiple ransomware attacks are being centered around the United States. In July 2021, between 800 and 1,500 businesses worldwide were affected by a ransomware attack centered on the United States information technology firm Kaseya. The US Department of Justice recently announced to elevate investigations of ransomware attacks to a similar priority as terrorism, which showcases the severity of ransomware attacks in the country.
• Zerto is a vendor for over 350 Managed Service Providers and 9,000 customers to provide disaster recovery, ransomware protection, and data and application mobility across hybrid, multi-cloud environments. The addition of Zerto is expected to accelerate HPE's R&D talent roadmap and HPE's transformation to become a central data management and protection provider to customers. Zerto will benefit by utilizing HPE's distribution channel, global presence, and installed base.
• Companies based out of the United States engage in multiple acquisition activities. For instance, in July 2021, Hewlett Packard Enterprise entered into a definitive agreement to acquire Zerto, a prominent cloud data management, and protection player, in a transaction valued at USD 374 million.

Competitive Landscape

The DRaaS market is highly competitive and consists of several major players. However, major companies like iLand Internet Solutions, Microsoft Corporation, Recovery Point Systems Evolve IP LLC, TierPoint LLC, and IBM Corporation are introducing innovations in data storage and security systems, and the companies are increasing their market presence by securing new partnerships and tapping the emerging markets.

• May 2022 - FalconStor Software, Inc., the trusted data protection software provider modernizing disaster recovery and backup operations for the hybrid cloud world, announced a new strategic partnership with IBM Corporation to provide jointly-validated solutions for IBM Power Systems, designed to assist enterprise customers and managed services providers (MSPs) with their cloud migration and cloud-enabled backup needs.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support