The Global Data Center Interconnect (DCI) market is influenced by several crucial market factors that significantly impact its development and expansion. One of the primary drivers of this market is the escalating demand for efficient, high-capacity connectivity between geographically dispersed data centers. As organizations increasingly adopt cloud computing, big data analytics, and distributed applications, there is a growing need for robust DCI solutions to facilitate seamless data exchange and workload migration across data center locations. This emphasis on reliable and high-speed interconnectivity has propelled the growth of the DCI market, particularly in response to the evolving requirements of modern digital infrastructures.
Moreover, the rapid proliferation of data-intensive applications, edge computing, and content delivery networks has significantly impacted the DCI market. With the surge in data traffic and the need to deliver low-latency, high-performance services, there is a heightened demand for DCI solutions that can support large data transfers, real-time analytics, and distributed computing workloads. The market has witnessed a surge in demand for DCI technologies offering high-speed optical networking, low-latency transmission, and network virtualization capabilities, driven by the need to enable seamless data exchange and content delivery across distributed data center environments, thus contributing to the expansion of the market.
Furthermore, the evolution of hybrid and multi-cloud architectures has played a crucial role in shaping the DCI market. As organizations embrace hybrid cloud deployments, multi-cloud strategies, and distributed IT environments, there is a growing need for DCI solutions that can interconnect disparate cloud platforms, private data centers, and edge computing nodes. The demand for DCI technologies offering secure connectivity, multi-cloud orchestration, and application-aware routing has surged, driven by the imperative to support diverse cloud environments and ensure seamless data transfer and workload mobility across hybrid and multi-cloud infrastructures, thereby influencing the growth of the market.
Additionally, the increasing focus on digital transformation, disaster recovery, and business continuity planning has driven the demand for resilient and scalable DCI solutions. Organizations are prioritizing DCI technologies that can provide disaster recovery connectivity, data replication, and backup synchronization between geographically dispersed data centers. The market has experienced heightened interest in DCI solutions offering redundant connectivity, automated failover, and geo-diverse replication capabilities, driven by the need to fortify business resilience and ensure continuous data availability across distributed data center facilities, contributing to the expansion of the market.
Moreover, the convergence of DCI with software-defined networking (SDN) and network functions virtualization (NFV) has been pivotal in shaping the DCI market. Organizations are seeking integrated DCI solutions that leverage SDN-based orchestration, dynamic bandwidth allocation, and virtualized network functions to optimize interconnectivity and traffic management between data centers. This convergence of technologies has led to the development of advanced DCI platforms that offer agile network provisioning, on-demand scalability, and network automation, driving market expansion and fostering innovation in DCI solutions.
Furthermore, the growing emphasis on interconnecting edge data centers, 5G networks, and IoT (Internet of Things) infrastructure has influenced the DCI market. As edge computing and IoT deployments become prevalent, there is an increasing demand for DCI solutions that can enable seamless connectivity and data exchange between centralized data centers and distributed edge computing nodes. The market has seen a rise in demand for DCI technologies offering edge-optimized connectivity, IoT traffic aggregation, and distributed workload orchestration, driven by the need to support edge computing initiatives and IoT data processing, thus contributing to the growth of the market.
Report Attribute/Metric | Details |
---|---|
Market Size Value In 2022 | USD 8.52 Billion |
Market Size Value In 2023 | USD 9.78 Billion |
Growth Rate | 14.80% (2023-2032) |
Data Center Interconnect Market Overview
The Data Center Interconnect Market is projected to grow from USD 11.22 billion in 2024 to USD 29.5 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 12.83% during the forecast period (2024 - 2032). Additionally, the market size for data center interconnect was valued at USD 9.78 billion in 2023.
The increase in migration toward the cloud across the globe, high demand for cloud infrastructure for flexibility, and increasing demand for higher bandwidth in line with the continued advancement in the latest technologies, including the Internet of Things (IoT), are the key market drivers enhancing the market growth.
Figure 1: Data Center Interconnect Market Size, 2023-2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Data Center Interconnect Market Trends
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.
Data Center Interconnect Market Segment Insights
Data Center Interconnect Type Insights
The global data center interconnect market segmentation, based on type, includes service, software, and hardware. The hardware segment dominated the market, accounting for 35% of market revenue (3.42 Billion). In developing economies, category growth is driven by rising volumes of big data, prompting cloud service providers to demand greater storage facilities. However, the software is the fastest-growing category as it helps balance and share resources when network traffic, and subsequently, the requirement for adequate bandwidth increases.
Figure 2: Data Center Interconnect Market, by Type, 2022 & 2032 (USD Billion)
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Data Center Interconnect Application Insights
The global data center interconnect market segmentation, based on application, includes workload & data storage mobility, real-time disaster recovery & business continuity, and shared data & resources/server high-availability clusters. The real-time disaster recovery & business continuity category generated the most income (70.4%). This is due to increased resource efficiency and accessibility; IT can now move computing pools with data center interconnect due to recent advancements in virtualization technology. However, shared data & resources/server high-availability clusters are the fastest-growing due to the growing need to deploy data center interconnect for the shared data and resources/server high-availability clusters application.
Data Center Interconnect End-Users Insights
The global data center interconnect market segmentation, based on end-users, includes enterprises, CSPs, CNPs/ICPs, government, and others. The CSPs segment dominated the market, accounting for major market revenue. This is the increasing demand for an increased capacity for facilitating managed services. However, CNPs/ICPs are the fastest-growing category over the forecast period. Some of the major ICPs, including Facebook (Meta), Google, and Microsoft, are generating large volumes of internet traffic.
Data Center Interconnect Regional Insights
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, MRFR 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.
Data Center Interconnect Key Market Players & Competitive Insights
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.
Key Companies in the Data Center Interconnect market include
Data Center Interconnect Industry Developments
June 2023: Equinix launched digital interconnection services for amplifying digital transformation in India to meet the country's quickly expanding demand for digital infrastructure. These services include Equinix Fabric, Equinix Internet Exchange, and Equinix Internet Access.
April 2022: Nokia announced that it would deliver a data center-changing portfolio for the data center networks of Microsoft. This will permit the scaling of networks and enhance the capacity that Microsoft requires for the data center environments to assist the expansion in bandwidth needed for Azure, developed by Microsoft.
Data Center Interconnect Market Segmentation
Data Center Interconnect Type Outlook
Software
Hardware
Data Center Interconnect Application Outlook
Real-Time Disaster Recovery & Business Continuity
Shared Data & Resources/Server High-Availability Clusters
Data Center Interconnect End-Users Outlook
CSPs
CNPs/ICPs
Government
Others
Data Center Interconnect Regional Outlook
o US
o Canada
o Germany
o France
o UK
o Italy
o Spain
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