Data Center Interconnect Market Size
| Study Period | 2019 - 2029 |
| Market Size (2024) | USD 14.12 Billion |
| Market Size (2029) | USD 28.38 Billion |
| CAGR (2024 - 2029) | 14.98 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Data Center Interconnect Market Analysis
The Data Center Interconnect Market size is estimated at USD 14.12 billion in 2024, and is expected to reach USD 28.38 billion by 2029, growing at a CAGR of 14.98% during the forecast period (2024-2029).
With the proliferation of data and expansion of technologies like AI and High-Performance Computing (HPC), the need to connect data center assets quickly, reliably, and cost-effectively is growing significantly.
- Factors such as throughput, latency, simplified operations and maintenance, intelligence, and security are becoming significant priorities for data center vendors. This is one of the major factors driving the adoption of Data Center Interconnect (DCI) technology. This is because they can increase bandwidth between data centers, cut down on latency, and stop packet loss.
- The market being studied is getting bigger because of the growing cloud computing industry and the recent rise in OTT service use due to a nationwide lockdown.Moreover, the increasing commercialization of 5G services may further expand the scope of interconnected data center solutions. Autonomous vehicles, smart cities, digital twins, virtual reality, AI virtual assistants, video surveillance and monitoring, and gaming can drive the market's demand.
- The data center interconnection market is growing because more and more people are becoming aware of its many benefits, such as easy access, more convenience, highly encrypted data, connecting with other data segments, and so on.
- The edge computing trend, essential in the 2020 nationwide lockdown scenario, further expands the studied market scope. About 10-15 percent of data is created and processed outside a centralized data center or cloud, but it is expected to reach 60-70 percent by 2025. The hyperscale data centers of Amazon, Google, Equinix, and DRT, are interconnected and stream data and applications over the network to end users. The edge cloud may be a unique ecosystem of open and interconnected data centers.
- The major challenge, especially for small and medium-sized businesses, is the cost of data center connectivity services. A new data center necessitates a significant investment in both construction and maintenance. Furthermore, the distance between data centers is important since it might reduce a data center's efficiency, limiting the growth of the data center interconnect industry.
The COVID-19 outbreak sparked a surge in demand for cloud computing globally. It also expanded the scope of the data center market. Although the data center construction projects witnessed a supply chain disruption due to the labor shortage, it was not expected to delay the completion of several projects. This was only seen in the initial phases. Video streaming and conferencing usage surged beyond expectations, particularly during the nationwide lockdown period, driving up bandwidth demands for networks globally. After the pandemic, the market is currently growing due to rapid digitization and increased 5G services.
Data Center Interconnect Market Trends
This section covers the major market trends shaping the Data Center Interconnect Market according to our research experts:
Increasing Number of Data Centers to Drive the Market Growth
- According to the US-based market vendor, Ciena Corporation, the number of data centers has increased in recent years, as there are now more than 7,500 around the globe, with 2,600 packed into the top 20 global cities alone. According to Huawei, global data produced annually may reach 180 ZB in 2025. The proportion of unstructured data (such as raw voice, video, and image data) may also continue to increase, reaching more than 95% shortly, boosting the growth of data centers globally.
- Data Communication Network (DCN) and Data Center Interconnect (DCI) solutions are increasingly concerned with quickly increasing DCN and DCI bandwidth to ensure zero packet loss, low latency, and high throughput of lossless networks, meeting the requirements of rapid service development. The DCI network connecting data centers has evolved into a 10 Tbit/s Wavelength Division Multiplexing (WDM) interconnection network.
- Further, data center service providers are investing in expanding their colocation and cloud capabilities. End-user enterprises (like telecom and financial organizations) opting to build their own data centers are mainly making the interconnected market for data centers a global investment hotspot. Industries, mainly OTT, ISPs, the financial sector, and the public sector, are developing their use cases for DCI networks due to data center growth and distribution, improved fiber utilization, and low-cost pluggable modules.
- The growth of data centers is also driving an increase in DCI, which allows enterprises to connect their data centers, cloud providers, and other data center operators to enable simpler data and resource sharing. According to CloudScene, India has 29 internet users for every 100 people, and its connectivity ecosystem is made up of 122 colocation data centers, 348 cloud service providers, and eight network fabrics.
Numerous factors, including the growth of virtualization and cloud computing, mobile data expansion, video consumption, and on-demand services, are driving a greater need for DCI in India and globally. Other key drivers include a significant increase in data and digital intelligent devices (such as Amazon's Alexa and Google Home) and the government's ambitious Digital India initiative.
Europe to Hold Significant Market Share
- The growing number of data centers, increasing investment in cloud technologies, and the expansion of end-user markets are some of the major factors driving the European data center's investment in the interconnect market. The stringent regional laws, like GDPR and the Personal Data Protection Initiative (Gaia-X), further boost the region's local data center construction and development.
- Germany, the United Kingdom, the Netherlands, and France are some of the major investors and adopters in the market studied. Investment and growth in the data center sector in the region have been increasing. This is mainly due to the high rate of adoption of cloud technologies. For instance, Microsoft alone has doubled its European data center capacity recently.
- Data traffic growth is expected to contribute to the market's growth significantly. For instance, according to Equinix, London is expected to remain the most important European market for data. Furthermore, an increasing number of European data compliance regulations serve as a catalyst, which is expected to grow 48% per year, accounting for 23% of global interconnection bandwidth.
- Furthermore, Nokia announced the availability of its 7220 IXR data center hardware platforms running SR Linux to DCspine, a subsidiary of Eurofiber Cloud Infra that provides digital infrastructure and connectivity services across European data centers, in November of this year.With this solution, DCspine will be able to offer more cloud and interconnection services, make the network easier to scale, and automate network operations.
- The building would be renamed the Equinix HH1 International Business Exchange (IBX) data center. It would add a fourth market in Germany to the company's global interconnection platform, Platform Equinix, and help meet the growing demand for connecting digital infrastructure across Europe.
Data Center Interconnect Industry Overview
The Data Center Interconnect Market is fragmented due to the presence of both global players and small and medium-sized enterprises. Lately, the vendors offering data centers are also combining data center interconnect solutions. Market players are adopting strategies such as product innovation, mergers, acquisitions, and partnerships.
In November 2022, Nokia announced that it will provide 400-gigabit-enabled interfaces for its 7250 IXR (interconnect router) systems to Africa Data Centers, the continent's largest provider of interconnected, carrier- and cloud-neutral data center facilities. Africa Data Centres, a business of Cassava Technologies, a pan-African technology company, would be able to offer its clients in many African countries low-cost, high-capacity interconnection services.
Data Center Interconnect Market Leaders
Ciena Corp
Cisco Systems Inc
Juniper Networks Inc
Fujitsu Ltd
Microsemi Corporation
*Disclaimer: Major Players sorted in no particular order
Data Center Interconnect Market News
- June 2022: Cologix, one of North America's leading network-neutral interconnection and hyperscale edge data center providers, announced that it had extended its strategic partnership with Console Connect by PCCW Global by deploying the Console Connect Software-Defined Interconnection platform at its TOR1 data center in Toronto. Cologix, in conjunction with Console Connect, now provides Canadian customers with extra fast and reliable digital edge linkages to connect with their customers, partners, and workers globally. Furthermore, Cologix offers clients choice and flexibility through an interconnection ecosystem of 600+ networks, 300+ cloud providers, and 30+ onramps across the United States and Canada. Cologix is looking forward to future business opportunities with Console Connect.
- November 2022: Equinix, Inc., the digital infrastructure company, and VMware, Inc., the cloud computing company, announced an extended partnership to provide innovative digital infrastructure and multi-cloud services. The companies collaborated to launch VMware Cloud on Equinix Metal, a new distributed cloud service providing a more performant, secure, and cost-effective cloud solution for enterprise applications. The service will integrate VMware-managed and supported cloud infrastructure with Equinix's global interconnected Bare Metal as a Service offering. Customers' cloud environments will be extended into scattered metro areas to meet business-critical performance demands at the edge while preserving the integrity of enterprise workloads.
Data Center Interconnect Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitutes
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Value Chain Analysis
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Increasing Number of Data Centers (Edge and Hyperscale)
5.1.2 Increasing Need for Ultra- broadband, Simplified, and Intelligent DCI Networks due to Applications, like AI and HPC
5.2 Market Challenges
5.3 Market Opportunities
5.3.1 Rising Commercialization of 5G
5.3.2 Growth in Markets, Such as Autonomous Vehicle, Smart City
6. ASSESSMENT OF COVID-19 IMPACT ON THE INDUSTRY
7. TECHNOLOGY SNAPSHOT
8. MARKET SEGMENTATION
8.1 By Application
8.1.1 Disaster Recovery and Business Continuity
8.1.2 Shared Data and Resources
8.1.3 Data (Storage) Mobility
8.1.4 Other Applications
8.2 By End-user Industry
8.2.1 Communications Service Providers (CSPs)
8.2.2 Internet Content and Carrier- neutral Providers (ICPs/CNPs)
8.2.3 Government/Research and Education (Government/R&E)
8.2.4 Other End-user Verticals
8.3 By Geography
8.3.1 North America
8.3.2 Europe
8.3.3 Asia Pacific
8.3.4 Rest of the World
9. COMPETITIVE LANDSCAPE
9.1 Company Profiles
9.1.1 Ciena Corp.
9.1.2 Cisco Systems Inc.
9.1.3 Juniper Networks Inc.
9.1.4 Fujitsu Ltd.
9.1.5 Microsemi Corp.
9.1.6 Pluribus Networks Inc.
9.1.7 Huawei Technologies Co. Ltd.
9.1.8 ADVA Optical Networking SE
9.1.9 Infinera Corp.
9.1.10 Nokia Oyj
- *List Not Exhaustive
10. INVESTMENT ANALYSIS
11. FUTURE OF THE MARKET
Data Center Interconnect Industry Segmentation
The Data Center Interconnect (DCI) technology connects two or more data centers together over short, medium or long distances using high-speed packet-optical connectivity. Some large operations use DCI to connect their own data centers within their extended enterprise infrastructures, while others connect to partners, cloud providers or data center operators to enable simpler data and resource sharing or handle disaster recovery needs. The market studied focuses on end-user industries utilizing DCI to address space and power challenges.
The data center interconnect market is segmented by Application (Disaster Recovery and Business Continuity, Shared Data and Resources, Data (Storage) Mobility), by End-user Vertical (Communications Service Providers (CSPs), Internet Content and Carrier- neutral Providers (ICPs/CNPs), Government/Research and Education (Government/R&E)), by Geography.
The market sizes and forecasts are provided in terms of value (USD million) for all the above segments.
| By Application | |
| Disaster Recovery and Business Continuity | |
| Shared Data and Resources | |
| Data (Storage) Mobility | |
| Other Applications |
| By End-user Industry | |
| Communications Service Providers (CSPs) | |
| Internet Content and Carrier- neutral Providers (ICPs/CNPs) | |
| Government/Research and Education (Government/R&E) | |
| Other End-user Verticals |
| By Geography | |
| North America | |
| Europe | |
| Asia Pacific | |
| Rest of the World |
Data Center Interconnect Market Research FAQs
How big is the Data Center Interconnect Market?
The Data Center Interconnect Market size is expected to reach USD 14.12 billion in 2024 and grow at a CAGR of 14.98% to reach USD 28.38 billion by 2029.
What is the current Data Center Interconnect Market size?
In 2024, the Data Center Interconnect Market size is expected to reach USD 14.12 billion.
Who are the key players in Data Center Interconnect Market?
Ciena Corp, Cisco Systems Inc, Juniper Networks Inc, Fujitsu Ltd and Microsemi Corporation are the major companies operating in the Data Center Interconnect Market.
Which is the fastest growing region in Data Center Interconnect Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Data Center Interconnect Market?
In 2024, the North America accounts for the largest market share in Data Center Interconnect Market.
What years does this Data Center Interconnect Market cover, and what was the market size in 2023?
In 2023, the Data Center Interconnect Market size was estimated at USD 12.28 billion. The report covers the Data Center Interconnect Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Data Center Interconnect Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Data Center Interconnect Solution Industry Report
Statistics for the 2024 Data Center Interconnect Solution market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Data Center Interconnect Solution analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
