Data Center Interconnect Market

The growing obese population is driving the market growth

Market CAGR for data center interconnect is driven as the major players are focusing on enhancing their product delivering and pursuing joint ventures to better cater to the changing requirements of the end-users and remain competitive. For instance, in November 2020, Ciena Corp. declared that NTT Communications Corp. elevated its DCI network by deploying a solitary-wave 800G line speed solution to adjust the growing demand for cloud and gaming services in line with the resumed rollout of 5G networks.

Additionally, an increase in the utilization of cloud storage drives market growth. The most practical and effective way to save data online nowadays is through cloud-based storage apps. In the world of cloud computing, there are numerous cloud-based solutions providers. Since this market is so big, every major tech company now has its data center facility, which helps to increase user revenue significantly. Eventually, the evolution to cloud-based solutions and the rise in organizational data traffic and big data analytics are also anticipated to flourish the growth of the data center interconnect market.

There is a rising need for backup and storage as the data generated increases.

Connectivity has become incredibly important for any business user due to the massive development in Software-as-a-Service (SaaS), the popularity of work-from-home, cloud computing, and others. Enhancing the latency and reaction times between users and data centers is urgently needed. Traffic between data centers has drastically expanded due to hybrid IT systems. The significance of providing connectivity between data centers is increasing as a result. In a connected age, many-to-many connectivity possibilities are extremely valuable and are made possible by interconnection. Businesses can reduce latency owing to shorter distances. This enhances both cost and overall user experience, which drives market growth.

Moreover, the increasing commercialization of 5G services may further enhance the scope of data center interconnected solutions. They urgently required ultra-broadband, simplified, and intelligent DCI networks to cope with various data flows in the cloud era, which is further fueling innovation in the studied market. The launch of automatic planning, automatic configuration, and intelligent alarm analysis systems is shown in the market. Companies deliver intelligent data center services, which may assist in designing, building, and operating efficient facilities that use AI to decrease power usage, driving the data center interconnect market revenue.

The Global Data Center Interconnect Market Industry is significantly influenced by the exponential growth of data traffic. With the proliferation of IoT devices and the expansion of digital services, data centers are tasked with managing vast amounts of information. This surge in data necessitates robust interconnectivity solutions to ensure reliable and fast data transmission. As a result, the market is projected to grow at a compound annual growth rate of 12.84% from 2025 to 2035, reaching an estimated 42.4 USD Billion by 2035. This growth underscores the critical role of data center interconnects in facilitating the efficient flow of information across networks.

The Global Data Center Interconnect Market Industry is projected to experience substantial growth over the coming years. The market is expected to reach 11.2 USD Billion in 2024 and is forecasted to expand to 42.4 USD Billion by 2035. This growth trajectory indicates a compound annual growth rate of 12.84% from 2025 to 2035. Such projections highlight the increasing importance of data center interconnectivity in supporting the evolving needs of businesses and the digital economy. The anticipated market expansion reflects the ongoing investments in infrastructure and technology aimed at enhancing data transfer capabilities across interconnected data centers.

The advent of 5G technology is poised to reshape the Global Data Center Interconnect Market Industry by enabling faster and more reliable connections. The deployment of 5G networks facilitates enhanced data transfer speeds and reduced latency, which are essential for applications such as real-time analytics and edge computing. As businesses leverage 5G capabilities, the demand for interconnected data centers is likely to rise, supporting the seamless exchange of data across various platforms. This technological evolution may further drive market growth, as organizations seek to capitalize on the benefits of 5G to improve operational efficiency and customer experiences.

The Global Data Center Interconnect Market Industry experiences a notable surge in demand for cloud services, driven by enterprises seeking scalable and flexible IT solutions. As organizations increasingly migrate to cloud environments, the need for efficient data transfer between data centers becomes paramount. This trend is evidenced by projections indicating that the market is expected to reach 11.2 USD Billion in 2024, reflecting a growing reliance on interconnected data centers to support cloud-based applications. The integration of data centers facilitates seamless access to cloud resources, enhancing operational efficiency and reducing latency, which is crucial for businesses aiming to remain competitive in a digital landscape.

The Global Data Center Interconnect Market Industry is increasingly characterized by a heightened focus on disaster recovery solutions. Organizations recognize the importance of maintaining business continuity in the face of potential disruptions. Interconnected data centers provide a robust framework for backup and recovery processes, enabling businesses to safeguard critical data and applications. This emphasis on resilience is likely to propel market growth, as companies invest in interconnectivity solutions that enhance their disaster recovery capabilities. The ability to swiftly recover from unforeseen events is becoming a strategic priority, further driving the demand for advanced data center interconnect solutions.

The Global Data Center Interconnect Market Industry is also shaped by regulatory compliance and data sovereignty requirements. As governments implement stricter data protection regulations, organizations must ensure that their data management practices align with legal standards. Interconnected data centers facilitate compliance by enabling businesses to manage data across multiple jurisdictions while adhering to local regulations. This need for compliance is likely to drive investments in data center interconnect solutions, as organizations seek to mitigate risks associated with data breaches and non-compliance. The evolving regulatory landscape underscores the importance of robust interconnectivity in maintaining data integrity and security.

By region, the study provides market insights into North America, Europe, Asia-Pacific and the Rest of the World. The North American data center interconnect market will dominate this market, owing to the growing preference of individuals to adopt cloud-computing solutions. Technological betterment and growing investments in the R&D process of major companies will boost market growth in this region. Further, the US data center interconnect market held the largest market share, and the Canada data center interconnect market was the fastest growing market in the North American region.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3: DATA CENTER INTERCONNECT MARKET SHARE BY REGION 2022 (USD Billion)

Source: Primary Research, Secondary Research, Market Research Future Database and Analyst Review

Europe's data center interconnect market accounts for the second-largest market share due to the increasing number of data centers and increased investment in cloud technologies. Further, the German data center interconnect market held the largest market share, and the UK data center interconnect market was the fastest-growing market in the European region.

The Asia-Pacific data center interconnect market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to the growing usage of data in various industries. Many countries have set ambitious targets and launched products owing to technological advancements, which drive market growth in this region. Moreover, China’s data center interconnect market held the largest market share, and the Indian data center interconnect market was the fastest-growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development to expand their product lines, which will help the data center interconnect market grow even more. Market participants are also undertaking numerous strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the data center interconnect industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the global data center interconnect industry to benefit clients and increase the market sector. Major players in the data center interconnect market, including Ciena Corporation (US), Nokia Corporation (Finland), Huawei Technologies (China), Juniper Networks, Inc. (US), Infinera Corporation (US), and others, are attempting to increase market demand by investing in research and development operations.

Cisco Systems Inc integrates intent-based technologies across networking, security, collaboration, applications and cloud. The company offers switches, modules, wireless products, controllers, access points, routers, and interfaces. The company's products and technologies help the clients manage more users, devices and things connecting to their networks. Cisco serves various industries, including oil and gas, education, financial services, government, healthcare, mining, sports, media, entertainment, retail, utilities, and transportation. It markets solutions via a direct sales force and channel partners, including service providers, distributors, and resellers. In March 2021, Cisco Systems completed the acquisition of Acacia Communications, Inc.

Acacia designs and manufactures high-speed, optical interconnect technologies that allow webscale firms, service delivers, and data center operators to meet the fast-growing consumer demand for data.

Ciena Corp provides communications networking solutions. The companies offer networking equipment, software and services that support the transport, switching, service delivery, video and data traffic on communications networks. Its products allow network operators to increase transmission speed, scale capacity, allocate traffic and adapt to user's changing service demands. Its solutions include networking platforms and converged packet optical routing and switching portfolios. The company serves telecommunications service providers, government, electric utilities, enterprises, research and education institutions, submarine network operators and cable operators.

In November 2020, Ciena Corporation signed a contract with NTT Communications Corporation, the ICT solutions and international communications business within the NTT Group, that deployed a single-wave 800G line speed solution for Data Center Interconnect (DCI) offered by the Ciena Corporation.