Data Center Interconnect Market Size & Growth Analysis to 2030

The global data center interconnects market size is anticipated to grow at a significant CAGR of around 13% during the forecast period from 2022 to 2028. The increasing adoption of OTT services around the world and the growing migration of cloud-based solutions are some major factors driving the market growth. Furthermore, the increasing focus of data center service providers on latency, throughput, streamlined operations, intelligence, and better security is further anticipated to fuel the market growth. Moreover, the increasing demand for higher bandwidth, growing penetration of IoT (Internet of Things), and the advent of 5G technology are projected to propel the market in the next upcoming years.

Market Drivers:

Increasing Demand for Data Storage and Processing: The exponential growth of data storage and processing requirements, driven by factors such as cloud computing, big data analytics, IoT (Internet of Things), and video streaming, fuels the demand for data centers. As data centers expand and multiply, the need for efficient and high-capacity interconnectivity solutions becomes crucial, driving the DCI market.

Growth of Cloud Computing Services: The rapid adoption of cloud computing services, including public, private, and hybrid clouds, is a significant driver for the DCI market. Cloud service providers require robust and scalable DCI solutions to connect and interoperate their data centers located in different geographical regions. The increasing reliance on cloud infrastructure and the need for seamless data movement between data centers stimulate the demand for DCI solutions.

Expansion of Internet Traffic and Content Distribution: The growth in internet traffic, fueled by the increasing number of internet users, mobile devices, and online content consumption, drives the need for efficient data center interconnectivity. Content providers and social media platforms require high-speed and reliable DCI solutions to ensure fast and seamless content distribution across multiple data centers and regions.

Data Center Consolidation and Migration: Organizations are constantly consolidating their data centers to improve operational efficiency, reduce costs, and simplify IT infrastructure. Data center consolidation involves the integration of multiple data centers into a centralized or regional data center. Data center migration involves transferring workloads and applications from one data center to another. Both consolidation and migration initiatives require robust DCI solutions to ensure smooth and secure data transfer between data centers.

Disaster Recovery and Business Continuity Requirements: Organizations increasingly prioritize disaster recovery and business continuity planning to safeguard their critical data and applications. DCI solutions play a crucial role in establishing data replication and backup mechanisms between geographically dispersed data centers, ensuring data availability and minimizing downtime in the event of a disaster or disruption.

Growing Demand for High-Speed Connectivity: The need for high-speed connectivity between data centers is driven by various factors, including real-time data processing, low-latency applications, video streaming, and emerging technologies like 5G and edge computing. DCI solutions that offer high bandwidth, low latency, and low jitter are essential to meet the requirements of these demanding applications.

Increasing Adoption of Virtualization and Software-Defined Networking (SDN): The adoption of virtualization technologies and software-defined networking (SDN) in data centers requires flexible and scalable DCI solutions. SDN enables centralized management and control of network resources, while virtualization allows for the efficient allocation of computing resources. DCI solutions that support virtualization and SDN technologies facilitate the seamless interconnectivity and efficient utilization of resources across distributed data centers.

Technological Advancements in Optical Networking: Technological advancements in optical networking, such as dense wavelength division multiplexing (DWDM) and coherent optical transmission, have significantly improved the capacity and performance of DCI solutions. These advancements enable higher data transmission rates, longer reach, and better signal quality, meeting the increasing demands of data center interconnectivity.

Government Initiatives and Regulations: Governments and regulatory bodies are implementing initiatives and regulations to promote digital infrastructure development and data security. These initiatives drive the need for robust and secure DCI solutions to ensure compliance, data privacy, and protection against cyber threats.

Market Drivers:

Market Insights:

By component, the hardware segment dominated the global data center interconnect market in 2021

The global data center interconnect market is bifurcated into component, application, end-use, and geography. On the basis of components, the market is further segmented into hardware, software, and services. The hardware segment is set to dominate the global market in 2021 and expected to hold the largest revenue share of over half of the market by 2028. The significant growth in big data is expected to increase the demand for better storage facilities which is a major factor driving the segment growth. Furthermore, the growing demand for servers, storage space, server racks, switches, routers, etc, is further anticipated to propel the segment growth over the forecast period. On the flip side, the software segment is estimated to grow at the highest CAGR over the forecast period.

By end-use, the CSPs segment is expected to dominate the global data center interconnect market bt 2028

On the basis of end-use, the market is segmented into CSPs, ICPs/CNPs, Government/R&E, Enterprises, and Others. The communication service providers (CSPs) segment dominated the global data center interconnect market and expected to hold a significant market share of around 1/3 market share by the end of the analysis period. The increasing investment by CSPs coupled with the growing demand for higher data storage capacity is a major factor driving the segment growth. On the flip side, the ICPs/CNPs segment is estimated to grow at the highest growth rate over the forecast period. The increasing volume of internet traffic is one of the prominent factor fueling the segment’s growth. For instance, some of the major ICPs such as Facebook (Meta), Google, etc, are generating a large volume of internet traffic.

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The data center interconnect comprehensive study analyzes industry trends, market size, competitive analysis, and market forecast – 2022 to 2028. Research Corridor report provides detailed premium insight into the global market and reveals the potential revenue streams, commercial prospects, market drivers, challenges, opportunities, issues, and events affecting the industry. In addition, the report has a dedicated section covering market forecasts and analysis for leading geographies, profiles of major companies operating in the market and expert opinion obtained from interviews with industry executives and experts from prominent companies.

The data center interconnect market research report presents the analysis of each segment from 2019 to 2028 considering 2021 as the base year for the research. The compounded annual growth rate (CAGR) for each respective segment is calculated for the forecast period from 2022 to 2028.

Historical & Forecast Period

• 2019-20 – Historical Year
• 2021 – Base Year
• 2022-2028 – Forecast Period

Market Segmentation:

By Component:

• Hardware
• Software
• Services

By Application:

• Real-time Disaster Recovery and Business Continuity
• Shared Data and Resources/Server High-availability Clusters (Geoclustering)
• Workload (VM) and Data (Storage) Mobility

By End-Use:

• Communications Service Providers (CSPs)
• Internet Content Providers and Carrier-Neutral Providers (ICPs/CNPs)
• Government/Research and Education (Government/R&E)
• Enterprises
• Others

By Region:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

Regional Analysis:

By region, North America is expected to dominate the global market by the end of the analysis period

On the basis of region, North America held the largest revenue share of over 1/3 market share in 2021 and expected to maintain its dominance over the forecast period. The increasing adoption of the latest technologies by various end-use industries and the growing focus on better work efficiency are some major factors driving the market growth. Furthermore, the presence of some major market players and the growing investment by data center service providers are further anticipated to fuel the market growth over the forecast period. On the flip side, the Asia Pacific is expected to register the fastest growth rate over the forecast period.

Geographically, the data center interconnect market report comprises dedicated sections centering on the regional market revenue and trends. The data center interconnect market has been segmented on the basis of geographic regions into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. The data center interconnect market has been extensively analyzed on the basis of various regional factors such as demographics, gross domestic product (GDP), inflation rate, acceptance, and others. Data center interconnect market estimates have also been provided for the historical years 2019 & 2020 along with forecasts for the period from 2022 – 2028.

Competitive Assessment:

Some of the major market players operating in the global data center interconnect market are Ciena Corp., NOKIA, Huawei Technologies Co., Ltd., Juniper Networks, Inc., and Infinera Corporation. Companies are exploring markets through expansion, new investment, the introduction of new services, and collaboration as their preferred strategies. Players are exploring new geography through expansion and acquisition to gain a competitive advantage through joint synergy.

Key Companies:

• Ciena Corp.
• NOKIA
• Huawei Technologies Co., Ltd.
• Juniper Networks, Inc.
• Infinera Corporation
• ADVA Optical Networking
• Cisco Systems, Inc.
• Extreme Networks
• Fujitsu
• Colt Technology Services Group Ltd.
• Brocade Communication Systems Inc. (Broadcom)

Key Questions Answered by Data Center Interconnect Market Report

• Global data center interconnect market forecasts from 2022-2028
• Regional market forecasts from 2022-2028 covering Asia-Pacific, North America, Europe, Middle East & Africa, and Latin America
• Country-level forecasts from 2022-2028 covering 15 major countries from the regions as mentioned above
• Data center interconnect submarket forecasts from 2022-2028 covering the market by component, application, end-use, and geography
• Various industry models such as SWOT analysis, Value Chain Analysis about the market
• Analysis of the key factors driving and restraining the growth of the global, regional, and country-level data center interconnect markets from 2022-2028
• Competitive Landscape and market positioning of top 10 players operating in the market