Data Center Interconnect Market Size, Share, Growth Analysis, By Type (Hardware, Software), By Application (Disaster Recovery & Business Continuity, Shared Data & Resources), By End Use (Communications Service Providers (CSPs), Internet Content Providers & Carrier-Neutral Providers (ICPs/CNPs)), By Region -Industry Forecast 2025-2032


Report ID: SQMIG45H2076 | Region: Global | Published Date: December, 2024
Pages: 175 |Tables: 91 |Figures: 70

Data Center Interconnect Market Insights

Global Data Center Interconnect Market size was valued at USD 8.47 Billion in 2022 and is poised to grow from USD 9.53 Billion in 2023 to USD 24.64 Billion by 2031, growing at a CAGR of 12.6% in the forecast period (2024-2031).

A key constituent of modern data centers' architecture, the data center interconnect industry, supports high-speed, high-capacity communication across geographically dispersed facilities. Data-intensive applications such as cloud services, big data analytics, disaster recovery, and business data mobility require DCI technology. The leading DCI solutions that facilitate flexible and scalable data transfer across data centers include SDN and optical transport systems. The demand for DCI solutions is on the rise as more and more businesses, content providers, and telecom carriers are increasingly using multi-cloud and hybrid environments. The rate of innovation in the industry has been quite fast, and the leading companies now offer high-end DCI services that can cater to increasing demand for dependable, secure, and low-latency data connections. Due to an explosion of data, the growth in edge computing, and effective interconnection requirements, DCI today is a critical part of global digital transformation projects. Higher reliability in interconnection is because of the massive growth brought about by data traffic thanks to the Internet of Things and 5G, and streaming services. Continuity of business operations and disaster recovery, aided by redundancy of data and risk management, the replication of data across locations, are factors pushing demand for DCI. SDN and NFV have also made DCI solutions more scalable and effective, thus catching the interest of many industries. Moreover, DCI solutions are needed to handle high-speed large-scale data flow as hyperscale data centers, like those of IT giants, grow their networks.

Market snapshot - 2024-2031

Global Market Size

USD 8.47 Billion

Largest Segment

Hardware

Fastest Growth

Software

Growth Rate

12.6% CAGR

Global Data Center Interconnect Market ($ Bn)
Country Share for North America (%)

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Data Center Interconnect Market Segmental Analysis

The global data center interconnect market is segmented into type, application, end use, and region. By type, the market is classified into hardware, software, and services. Depending on the application, it is categorized into disaster recovery & business continuity, shared data & resources, and workload & data mobility. According to end use, the market is divided into communications service providers (CSPs), internet content providers & carrier-neutral providers (ICPs/CNPs), government/research & education, and others. Regionally, the market is studied across North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Analysis by Type

Based on the 2024 data center interconnect market forecast, the highest share was held by the hardware category, with more than 56%. 5G networks and edge computing are propelling the requirement for data center interconnect equipment to manage massive amounts of data that are not centralized. 5G enables extremely fast data rates and low-latency connections, most suitable for real-time applications in the consumer, healthcare, and automotive sectors. Edge computing reduces latency and bandwidth issues by processing data near to its source. For smooth integration of dispersed edge sites with central data centers though, reliable data center interconnect hardware is required. These are the switches, high-speed routers, and optical transceivers that form the backbone of current network infrastructure because they promise reliable, fast data transfer required for 5G and edge applications. Edge computing and 5G together fuel the growth of the hardware segment.

However, growing demands for network automation are projected to drive the steady rise of the software segment in the data center infrastructure, or data center interconnect market over the forecast period. Data center interconnect software becomes a crucial aspect as businesses look toward optimizing their data center operations, thus reducing human error. This program enables centralized control, routine job automation, and simplified management across networked data centers. Data center interconnect software ensures consistency in complicated situations by increasing efficiency and lowering operating expenses. This is very important to companies dealing with large amounts of data and are trying to keep their network architecture robust and efficient. Data center interconnect software will be essential in driving operational excellence and agility as businesses grow.

Analysis By Application

In 2024, the market was dominated by the disaster recovery & business continuity category. Since most organizations rely on cloud and hybrid infrastructures, it has now become important that there should be reliable disaster recovery of all the different data centers. Data center interconnect solutions make effective data redundancy and real-time backup possible as they provide seamless communication between on-premises systems and cloud settings. This integration supports business continuity by providing constant data availability and reduced data loss in case of an outage. Organizations may enhance disaster recovery procedures and capabilities due to the strong interconnection offered by DCI across diverse infrastructures.

As per the data center interconnect market analysis, the market share for the shared data & resources category is expected to rise gradually. As multi-cloud strategies grow among companies, they increase demand for data center interconnect solutions as this type of connection streamlines smooth interaction across many cloud providers and on-premises data centers, thus further sharing of resources between multiple setups enhance the flexibility and scalability for business operations. Using data center interconnect optimizes the business IT infrastructure and resources without suffering from vendor lock-in and with the possibility of choosing the best services available from multiple cloud providers.

Global Data Center Interconnect Market By Type

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Data Center Interconnect Market Regional Insights

During the year 2024, the data center interconnect industry is dominated by North America as the region represented more than 38 percent of the markets. The superiority emanates due to presence of several leading company’s telecommunication business in this region in addition to prominent vendors coming from an industry lineup with aggressive plan that comes at installing current and advanced technologies, aiming operational performance in efficiency. Highly developed ICT infrastructure in addition supports this development in the market by means of considerable data center clusters of the size of New York, Los Angeles, Chicago, and Washington, DC. This calls for an advanced solution for DCI with sustainability support because those cities have importance as centering hubs for data storage and movement.

The Asia-Pacific market is growing at a compound annual growth rate (CAGR) of 13.7% between 2024 and 2031. With businesses adopting cloud computing, big data analytics, and IoT technologies at an accelerating pace, the region is witnessing a rapid digital transformation. This change is driving the demand for efficient DCI solutions that ensure seamless data flow and communication between geographically dispersed systems. DCI solutions become inevitable for ensuring reliable, quick communications that enable companies to maximize their digitization, productivity, and performance to maintain operational efficiency. The requirement of rapid and safe data transfer will be critical while meeting the increasing needs of the region with more evolved digital capabilities.

Global Data Center Interconnect Market By Geography
  • Largest
  • Fastest

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Data Center Interconnect Market Dynamics

Drivers

Digital Transformation

  • More companies adopting digital transformation require new generation IT infrastructure for the handling of massive, dispersed volumes of data. DCI solutions allow organizations to have continued efficient access to applications, data, and services by maintaining easy interconnectivity between coupled data centers. This has accelerated the adoption of DCI technology. Especially in the sectors such as retail, health, and finance, sophisticated network infrastructures are vital to support digital business processes.

Requirements for Network Scalability

  • Since data consumption is growing exponentially along with the requirement of real-time communication, fast scaling for an effective network is much needed. With the DCI solutions, the capacity building of the data centers is extremely easy for the businesses and with that, it would also not compromise the performance scale. Businesses need to be competitive in the rapidly evolving digital landscape due to growing business needs and higher data volumes. This calls for strong, flexible DCI systems that enable high-speed data transfers.

Restraints

Data Security Issues

  • Businesses have significant concerns about the data transfer security issues that come with cross-linked data centers. A large number of links between these data centers increases the exposure to cyberattacks, data breach, and unauthorized access. Transferring sensitive information ensures privacy and security, even for businesses in regulated fields. This is a restrictive factor in the market size.

Operational Challenges

  • To ensure speed, security, and scalability, DCI infrastructure management calls for constant changes and monitoring. This is particularly true in the case of large organizations. These operational challenges can significantly burden internal IT staff to increase maintenance and troubleshooting costs. Organizations deploying DCI systems also face significant operational challenges in maintaining high uptime and resolving performance problems across multiple interconnected data centers.

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Data Center Interconnect Market Competitive Landscape

The companies that drive competitiveness in the industry include Cisco Systems, Juniper Networks, Huawei Technologies, Arista Networks, and Mellanox Technologies. Such companies provide high-performance interconnect solutions through different Ethernet and optical technologies to ensure scalable, secure, and effective connectivity in the data center. In response to industrial and market demands, large companies of the economy focused on continuous innovation, strategic alliances, and diversification of their products.

Top Player’s Company Profile

  • Cisco Systems, Inc.
  • Juniper Networks, Inc.
  • Broadcom Inc.
  • Arista Networks, Inc.
  • Nokia Corporation
  • Huawei Technologies Co., Ltd.
  • Mellanox Technologies (now part of NVIDIA)
  • Ciena Corporation
  • Extreme Networks, Inc.
  • Fujitsu Limited
  • IBM Corporation
  • Infinera Corporation
  • Adtran
  • ZTE Corporation

Recent Developments

  • Launched during March 2024, these new ICE-D intra-data center optics from Infinera Corporation offer high-speed connections of up to 1.6 Tb/s. This method makes savings of up to 75% on power usage per bit by using indium phosphide photonic integrated circuits. It expects more than tenfold market growth by 2027 to fill the increasing bandwidth demand by AI applications.
  • At MWC Barcelona in February 2024, Huawei Technologies Co., Ltd. announced the OptiXtrans DC908 Pro-the latest Data Center Interconnect platform. Some of its revolutionary innovations include single-wavelength transmission at 1.2 Tbit/s over 240 km, better intelligence for easier deployment, and increased dependability of 99.999%.
  • The largest web hosting provider in Europe, IONOS, deployed Infinera's GX Series Compact Modular Platform in September 2023 to strengthen its network infrastructure and create reliable, high-capacity, high-performance connectivity services, enabling interconnections between data centers throughout Europe.

Data Center Interconnect Key Market Trends

  • Cloud-Based DCI Solutions: The reason for their increasing popularity is that cloud-based DCI solutions do not incur significant expenditures in physical infrastructure. The cloud-based solution offers enterprises the opportunity to make the most of interconnectivity without having to spend money on expensive conventional on-premises systems by offering network resources that are scalable and adaptive. Solutions for businesses, growing the need for efficiency and agility in the digital space, provide for faster deployment, cost cuts, and easy management.
  • AI-Powered DCI Solutions: The conventional methodology of functioning with the application of artificial intelligence in DCI solutions has transformed the data center completely. Artificial intelligence (AI) solutions improve operational performance and efficiency by automating network management chores, optimizing data routing, and predicting traffic patterns. AI-driven DCI solutions could reduce downtime and increase security; it detects possible network problems before becoming serious ones. AI integration in DCI would be the prime differentiator for performance with cost savings in a quest by organizations to optimize infrastructures.

Data Center Interconnect Market SkyQuest Analysis

SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected using Primary Exploratory Research backed by robust Secondary Desk research.

As per SkyQuest analysis, the strong expansion in the data center interconnect market is driven by increasing data traffic, growing popularity of cloud computing, and growing needs for smooth, fast communication across dispersed data centers. Increasing companies' need for effective, scalable, and secure DCI solutions continues to grow. Although there are still challenges such as high startup costs, integration complexities, and data security threats, these are mitigated by new technology and a strong focus on automation and software-defined networking. The market is well-positioned to further grow, with major growth areas such as cloud services, IoT, and AI-driven solutions, due to key players who are innovating to meet changing demands.

Report Metric Details
Market size value in 2022 USD 8.47 Billion
Market size value in 2031 USD 24.64 Billion
Growth Rate 12.6%
Base year 2023
Forecast period 2024-2031
Forecast Unit (Value) USD Billion
Segments covered
  • Type
    • Hardware, Software, and Services
  • Application
    • Disaster Recovery & Business Continuity, Shared Data & Resources, and Workload & Data Mobility
  • End Use
    • Communications Service Providers (CSPs), Internet Content Providers & Carrier-Neutral Providers (ICPs/CNPs), Government/Research & Education, and Others
Regions covered North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA)
Companies covered
  • Cisco Systems, Inc.
  • Juniper Networks, Inc.
  • Broadcom Inc.
  • Arista Networks, Inc.
  • Nokia Corporation
  • Huawei Technologies Co., Ltd.
  • Mellanox Technologies (now part of NVIDIA)
  • Ciena Corporation
  • Extreme Networks, Inc.
  • Fujitsu Limited
  • IBM Corporation
  • Infinera Corporation
  • Adtran
  • ZTE Corporation
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Table Of Content

Executive Summary

Market overview

  • Exhibit: Executive Summary – Chart on Market Overview
  • Exhibit: Executive Summary – Data Table on Market Overview
  • Exhibit: Executive Summary – Chart on Data Center Interconnect Market Characteristics
  • Exhibit: Executive Summary – Chart on Market by Geography
  • Exhibit: Executive Summary – Chart on Market Segmentation
  • Exhibit: Executive Summary – Chart on Incremental Growth
  • Exhibit: Executive Summary – Data Table on Incremental Growth
  • Exhibit: Executive Summary – Chart on Vendor Market Positioning

Parent Market Analysis

Market overview

Market size

  • Market Dynamics
    • Exhibit: Impact analysis of DROC, 2021
      • Drivers
      • Opportunities
      • Restraints
      • Challenges
  • SWOT Analysis

KEY MARKET INSIGHTS

  • Technology Analysis
    • (Exhibit: Data Table: Name of technology and details)
  • Pricing Analysis
    • (Exhibit: Data Table: Name of technology and pricing details)
  • Supply Chain Analysis
    • (Exhibit: Detailed Supply Chain Presentation)
  • Value Chain Analysis
    • (Exhibit: Detailed Value Chain Presentation)
  • Ecosystem Of the Market
    • Exhibit: Parent Market Ecosystem Market Analysis
    • Exhibit: Market Characteristics of Parent Market
  • IP Analysis
    • (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
  • Trade Analysis
    • (Exhibit: Data Table: Import and Export data details)
  • Startup Analysis
    • (Exhibit: Data Table: Emerging startups details)
  • Raw Material Analysis
    • (Exhibit: Data Table: Mapping of key raw materials)
  • Innovation Matrix
    • (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
  • Pipeline product Analysis
    • (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
  • Macroeconomic Indicators

COVID IMPACT

  • Introduction
  • Impact On Economy—scenario Assessment
    • Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
  • Revised Market Size
    • Exhibit: Data Table on Data Center Interconnect Market size and forecast 2021-2027 ($ million)
  • Impact Of COVID On Key Segments
    • Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
  • COVID Strategies By Company
    • Exhibit: Analysis on key strategies adopted by companies

MARKET DYNAMICS & OUTLOOK

  • Market Dynamics
    • Exhibit: Impact analysis of DROC, 2021
      • Drivers
      • Opportunities
      • Restraints
      • Challenges
  • Regulatory Landscape
    • Exhibit: Data Table on regulation from different region
  • SWOT Analysis
  • Porters Analysis
    • Competitive rivalry
      • Exhibit: Competitive rivalry Impact of key factors, 2021
    • Threat of substitute products
      • Exhibit: Threat of Substitute Products Impact of key factors, 2021
    • Bargaining power of buyers
      • Exhibit: buyers bargaining power Impact of key factors, 2021
    • Threat of new entrants
      • Exhibit: Threat of new entrants Impact of key factors, 2021
    • Bargaining power of suppliers
      • Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
  • Skyquest special insights on future disruptions
    • Political Impact
    • Economic impact
    • Social Impact
    • Technical Impact
    • Environmental Impact
    • Legal Impact

Market Size by Region

  • Chart on Market share by geography 2021-2027 (%)
  • Data Table on Market share by geography 2021-2027(%)
  • North America
    • Chart on Market share by country 2021-2027 (%)
    • Data Table on Market share by country 2021-2027(%)
    • USA
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Canada
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
  • Europe
    • Chart on Market share by country 2021-2027 (%)
    • Data Table on Market share by country 2021-2027(%)
    • Germany
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Spain
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • France
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • UK
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Rest of Europe
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
  • Asia Pacific
    • Chart on Market share by country 2021-2027 (%)
    • Data Table on Market share by country 2021-2027(%)
    • China
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • India
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Japan
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • South Korea
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Rest of Asia Pacific
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
  • Latin America
    • Chart on Market share by country 2021-2027 (%)
    • Data Table on Market share by country 2021-2027(%)
    • Brazil
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Rest of South America
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
  • Middle East & Africa (MEA)
    • Chart on Market share by country 2021-2027 (%)
    • Data Table on Market share by country 2021-2027(%)
    • GCC Countries
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • South Africa
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)
    • Rest of MEA
      • Exhibit: Chart on Market share 2021-2027 (%)
      • Exhibit: Market size and forecast 2021-2027 ($ million)

KEY COMPANY PROFILES

  • Competitive Landscape
    • Total number of companies covered
      • Exhibit: companies covered in the report, 2021
    • Top companies market positioning
      • Exhibit: company positioning matrix, 2021
    • Top companies market Share
      • Exhibit: Pie chart analysis on company market share, 2021(%)

Methodology

For the Data Center Interconnect Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:

1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.

2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Data Center Interconnect Market.

3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.

4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.

Analyst Support

Customization Options

With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Data Center Interconnect Market:

Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.

Regional Analysis: Further analysis of the Data Center Interconnect Market for additional countries.

Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.

Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.

Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.

Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.

Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.

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FAQs

Global Data Center Interconnect Market size was valued at USD 8.47 Billion in 2022 and is poised to grow from USD 9.53 Billion in 2023 to USD 24.64 Billion by 2031, growing at a CAGR of 12.6% in the forecast period (2024-2031).

The companies that drive competitiveness in the industry include Cisco Systems, Juniper Networks, Huawei Technologies, Arista Networks, and Mellanox Technologies. Such companies provide high-performance interconnect solutions through different Ethernet and optical technologies to ensure scalable, secure, and effective connectivity in the data center. In response to industrial and market demands, large companies of the economy focused on continuous innovation, strategic alliances, and diversification of their products. 'Cisco Systems, Inc.', 'Juniper Networks, Inc.', 'Broadcom Inc.', 'Arista Networks, Inc.', 'Nokia Corporation', 'Huawei Technologies Co., Ltd.', 'Mellanox Technologies (now part of NVIDIA)', 'Ciena Corporation', 'Extreme Networks, Inc.', 'Fujitsu Limited', 'IBM Corporation', 'Infinera Corporation', 'Adtran', 'ZTE Corporation'

More companies adopting digital transformation require new generation IT infrastructure for the handling of massive, dispersed volumes of data. DCI solutions allow organizations to have continued efficient access to applications, data, and services by maintaining easy interconnectivity between coupled data centers. This has accelerated the adoption of DCI technology. Especially in the sectors such as retail, health, and finance, sophisticated network infrastructures are vital to support digital business processes.

Cloud-Based DCI Solutions: The reason for their increasing popularity is that cloud-based DCI solutions do not incur significant expenditures in physical infrastructure. The cloud-based solution offers enterprises the opportunity to make the most of interconnectivity without having to spend money on expensive conventional on-premises systems by offering network resources that are scalable and adaptive. Solutions for businesses, growing the need for efficiency and agility in the digital space, provide for faster deployment, cost cuts, and easy management.

During the year 2024, the data center interconnect industry is dominated by North America as the region represented more than 38 percent of the markets. The superiority emanates due to presence of several leading company’s telecommunication business in this region in addition to prominent vendors coming from an industry lineup with aggressive plan that comes at installing current and advanced technologies, aiming operational performance in efficiency. Highly developed ICT infrastructure in addition supports this development in the market by means of considerable data center clusters of the size of New York, Los Angeles, Chicago, and Washington, DC. This calls for an advanced solution for DCI with sustainability support because those cities have importance as centering hubs for data storage and movement.

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