The Global Data Center Interconnect Market size is expected to reach $18.3 billion by 2027, rising at a market growth of 13.9% CAGR during the forecast period.
Data centers interconnect creates a network of two or more data centers with the aim of achieving business or IT goals. They can collaborate; pass tasks between one another, and share information and resources due to this interconnectedness. Data center interconnection allows customers to connect to a variety of internet service providers, which is critical if they are in a different area. Businesses can use this to establish a strong presence both domestically and internationally, allowing them to extend their consumer base and operations. To facilitate simple data, resource sharing, and disaster recovery needs, some major enterprises utilize data center interconnect to connect their own data centers with their extended infrastructure, while others connect to partners, cloud providers, or data center operators.
The Data Center Interconnect (DCI) technology uses high-speed packet-optical communication to connect two or more data centers over short, medium, or long distances. DCI is used by some large enterprises to connect their own data centers inside their extended business infrastructures, while others connect to stakeholders to make data and resource sharing easier or to handle disaster recovery.
The requirement to connect data center assets rapidly, reliably, and cost-effectively is expanding due to the explosion of data and the rise of technologies such as AI and High-Performance Computing (HPC). Data center providers are prioritizing factors such as throughput, latency, streamlined operations and maintenance, intelligence, and security. This is because they can increase inter-data center bandwidth, lower latency, and eliminate packet loss.
In some areas, data center construction came to a halt, but this was not the case in other regions. For the interest of worker safety, construction projects in some parts of Europe have been entirely halted. In addition, pre-construction activities like permitting have been put on hold for the time being. In Southeast Asia, the impact was mixed. Singapore had imposed a temporary building halt, but Thailand was allowing projects to go, though with shortened workdays to allow workers to return home during curfews. Project management, service providers, and suppliers were all monitored for delivery capacity within the scope of construction. This allowed bottlenecks to be identified early and alternate solutions to be chosen.
The demand for colocation data center space appears to be high in the current scenario. Cloud adoption is predicted to be highest in industries such as over-the-top, video streaming, and gaming. Demand for educational access to cloud platforms has also increased dramatically.
The app architecture became so simple with the advent of web-based applications that several apps could be readily hosted on a shared server. This was accomplished without sacrificing considerable performance. However, as the number of users and the complexity of apps increased, shared hosting became obsolete. Businesses moved their apps to dedicated VPS hosting options, which were unsuitable for long periods of time and began to fail users. Owners of small businesses had little choice but to buy an entire dedicated server. The migration of the programme to the new VPS server was the first challenge they faced.
On the other hand, Businesses quickly discovered that the server's exorbitant price was not justified. Mostly, a large amount of the server's resources was not useful. The dedicated server proved to be a bad business decision because firms were paying for the full server regardless of resource consumption.
Users of data centers all throughout the world are concerned about disaster recovery. Disasters such as earthquakes, security assaults, fire outages, and other unanticipated events can all affect IT infrastructure facilities. Proper disaster recovery strategies must be in place for businesses to avoid suffering significant losses as a result of such calamities. Data center interconnection facilities are situated away from users' premises, making them less vulnerable to disasters. These facilities can be controlled remotely, enhancing their disaster recovery capabilities.
As a result, interconnection facilities are expected to become a popular backup and recovery option for enterprises since they allow them to store critical data in a remote place. Hence, the presence of a durable and secure DCI solution can ensure business continuity.
Applications use data centers to store and transport data. The size of information entering or departing a data center can vary dramatically, ranging from hundreds of Gigabits to Terabits. Data center operators face major capacity planning and network engineering issues as video, social media, and distributed application traffic explodes. New types of workloads, such as analytics, machine learning, and the Internet of Things, are putting major capacity constraints on data centers.
As a result, the networking equipment used to connect data centers must be capable of providing dependable, high-capacity connections that can be scaled to meet data center traffic's massive expansion requirements. In addition, many companies are not willing to update their existing equipment which may bring friction in connected ecosystem. Moreover, upgrading equipment requires high financial costs which are not feasible for some companies.
Based on Type, the market is segmented into Products (Packet-Switching Networking and Optical DCI), Software, and Services. The Services segment held a promising revenue share of the Data Center Interconnect Market in 2020. This is because of the various benefits of services such as accomplishing important targets and creating skillsets for strengthening their internal planning and control process to remotely manage end users' IT infrastructure/systems. The segment is expected to growth further because of the benefits of services, such as remote administration of clients' IT infrastructure and end-user systems on a proactive basis.
Based on End User, the market is segmented into Internet Content Providers/ Carrier-Neutral Providers, Communication Service Providers, Enterprises, and Government. In 2020, the Internet Content Providers/Carrier-Neutral Providers segment obtained the largest revenue share of the overall Data Center Interconnect market. This is due to the fact that the majority of data centres and thousands of servers are operated by carrier-neutral/internet content providers. These data centres need terabits of optical transport capacity over metro, regional, and long-haul distances, which can be accomplished by employing DCI to link and transmit traffic between data centres.
Based on Application, the market is segmented into Real-time Disaster Recovery & Business Continuity, Shared Data & Resources/Server High-availability Clusters (Geoclustering), and Workload (VM) & Data (Storage) Mobility. In 2020, Real-time Disaster Recovery & Business Continuity segment garnered the largest revenue share of the market. The DCI solutions make it simple for data centres located around the globe to participate in any type of business continuity and disaster recovery (BCDR) strategy. When physical barriers between data centres are removed, vital business data may be backed up, replicated, or accessed in real time, and active-active and active-standby methods can be adopted more easily. Workloads can be readily shifted or recovered in any place in the event of breakdowns or IT repair schedules. It reduces the impact of outages and disruptions on the business. It lowers the danger of data loss and reputational damage while also improving operations and reducing the likelihood of emergencies.
Based on Regions, the market is segmented into North America, Europe, Asia Pacific, and Latin America, Middle East & Africa. In 2020, North America emerged as the leading region in the overall Data Center Interconnect market. This is because of the high penetration of 5G technologies, enterprise preference for server-based services, and others. In addition, the growth of the regional market is expected to be driven by an increase in the number of secure internet servers in the United States and Canada.
The major strategies followed by the market participants are Product Launches. Based on the Analysis presented in the Cardinal matrix; Huawei Technologies Co., Ltd. and Cisco Systems, Inc. are the forerunners in the Data Center Interconnect Market. Companies such as Ciena Corporation Fujitsu Limited, Colt Technology Services Limited are some of the key innovators in Data Center Interconnect Market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Huawei Technologies Co., Ltd., Cisco Systems, Inc., Ciena Corporation, Infinera Corporation, ADVA Optical Networking SE, Nokia Corporation, Juniper Networks, Inc., Fujitsu Limited, Colt Technology Services Group Limited, and Extreme Networks, Inc.
By Type
By End User
By Application
Data centers interconnect creates a network of two or more data centers with the aim of achieving business or IT goals. They can collaborate; pass tasks between one another, and share information and resources due to this interconnectedness. Data center interconnection allows customers to connect to a variety of internet service providers, which is critical if they are in a different area. Businesses can use this to establish a strong presence both domestically and internationally, allowing them to extend their consumer base and operations. To facilitate simple data, resource sharing, and disaster recovery needs, some major enterprises utilize data center interconnect to connect their own data centers with their extended infrastructure, while others connect to partners, cloud providers, or data center operators.
The Data Center Interconnect (DCI) technology uses high-speed packet-optical communication to connect two or more data centers over short, medium, or long distances. DCI is used by some large enterprises to connect their own data centers inside their extended business infrastructures, while others connect to stakeholders to make data and resource sharing easier or to handle disaster recovery.
The requirement to connect data center assets rapidly, reliably, and cost-effectively is expanding due to the explosion of data and the rise of technologies such as AI and High-Performance Computing (HPC). Data center providers are prioritizing factors such as throughput, latency, streamlined operations and maintenance, intelligence, and security. This is because they can increase inter-data center bandwidth, lower latency, and eliminate packet loss.
COVID-19 Impact Analysis
In some areas, data center construction came to a halt, but this was not the case in other regions. For the interest of worker safety, construction projects in some parts of Europe have been entirely halted. In addition, pre-construction activities like permitting have been put on hold for the time being. In Southeast Asia, the impact was mixed. Singapore had imposed a temporary building halt, but Thailand was allowing projects to go, though with shortened workdays to allow workers to return home during curfews. Project management, service providers, and suppliers were all monitored for delivery capacity within the scope of construction. This allowed bottlenecks to be identified early and alternate solutions to be chosen.
The demand for colocation data center space appears to be high in the current scenario. Cloud adoption is predicted to be highest in industries such as over-the-top, video streaming, and gaming. Demand for educational access to cloud platforms has also increased dramatically.
Market Growth Factors:
Cloud-based solutions are becoming more popular
The app architecture became so simple with the advent of web-based applications that several apps could be readily hosted on a shared server. This was accomplished without sacrificing considerable performance. However, as the number of users and the complexity of apps increased, shared hosting became obsolete. Businesses moved their apps to dedicated VPS hosting options, which were unsuitable for long periods of time and began to fail users. Owners of small businesses had little choice but to buy an entire dedicated server. The migration of the programme to the new VPS server was the first challenge they faced.
On the other hand, Businesses quickly discovered that the server's exorbitant price was not justified. Mostly, a large amount of the server's resources was not useful. The dedicated server proved to be a bad business decision because firms were paying for the full server regardless of resource consumption.
Rise in need for disaster recovery and business continuity
Users of data centers all throughout the world are concerned about disaster recovery. Disasters such as earthquakes, security assaults, fire outages, and other unanticipated events can all affect IT infrastructure facilities. Proper disaster recovery strategies must be in place for businesses to avoid suffering significant losses as a result of such calamities. Data center interconnection facilities are situated away from users' premises, making them less vulnerable to disasters. These facilities can be controlled remotely, enhancing their disaster recovery capabilities.
As a result, interconnection facilities are expected to become a popular backup and recovery option for enterprises since they allow them to store critical data in a remote place. Hence, the presence of a durable and secure DCI solution can ensure business continuity.
Market Restraining Factors
Capacity constraints
Applications use data centers to store and transport data. The size of information entering or departing a data center can vary dramatically, ranging from hundreds of Gigabits to Terabits. Data center operators face major capacity planning and network engineering issues as video, social media, and distributed application traffic explodes. New types of workloads, such as analytics, machine learning, and the Internet of Things, are putting major capacity constraints on data centers.
As a result, the networking equipment used to connect data centers must be capable of providing dependable, high-capacity connections that can be scaled to meet data center traffic's massive expansion requirements. In addition, many companies are not willing to update their existing equipment which may bring friction in connected ecosystem. Moreover, upgrading equipment requires high financial costs which are not feasible for some companies.
Type Outlook
Based on Type, the market is segmented into Products (Packet-Switching Networking and Optical DCI), Software, and Services. The Services segment held a promising revenue share of the Data Center Interconnect Market in 2020. This is because of the various benefits of services such as accomplishing important targets and creating skillsets for strengthening their internal planning and control process to remotely manage end users' IT infrastructure/systems. The segment is expected to growth further because of the benefits of services, such as remote administration of clients' IT infrastructure and end-user systems on a proactive basis.
End User Outlook
Based on End User, the market is segmented into Internet Content Providers/ Carrier-Neutral Providers, Communication Service Providers, Enterprises, and Government. In 2020, the Internet Content Providers/Carrier-Neutral Providers segment obtained the largest revenue share of the overall Data Center Interconnect market. This is due to the fact that the majority of data centres and thousands of servers are operated by carrier-neutral/internet content providers. These data centres need terabits of optical transport capacity over metro, regional, and long-haul distances, which can be accomplished by employing DCI to link and transmit traffic between data centres.
Applications Outlook
Based on Application, the market is segmented into Real-time Disaster Recovery & Business Continuity, Shared Data & Resources/Server High-availability Clusters (Geoclustering), and Workload (VM) & Data (Storage) Mobility. In 2020, Real-time Disaster Recovery & Business Continuity segment garnered the largest revenue share of the market. The DCI solutions make it simple for data centres located around the globe to participate in any type of business continuity and disaster recovery (BCDR) strategy. When physical barriers between data centres are removed, vital business data may be backed up, replicated, or accessed in real time, and active-active and active-standby methods can be adopted more easily. Workloads can be readily shifted or recovered in any place in the event of breakdowns or IT repair schedules. It reduces the impact of outages and disruptions on the business. It lowers the danger of data loss and reputational damage while also improving operations and reducing the likelihood of emergencies.
Regional Outlook
Based on Regions, the market is segmented into North America, Europe, Asia Pacific, and Latin America, Middle East & Africa. In 2020, North America emerged as the leading region in the overall Data Center Interconnect market. This is because of the high penetration of 5G technologies, enterprise preference for server-based services, and others. In addition, the growth of the regional market is expected to be driven by an increase in the number of secure internet servers in the United States and Canada.
Cardinal Matrix - Data Center Interconnect Market Competition Analysis
The major strategies followed by the market participants are Product Launches. Based on the Analysis presented in the Cardinal matrix; Huawei Technologies Co., Ltd. and Cisco Systems, Inc. are the forerunners in the Data Center Interconnect Market. Companies such as Ciena Corporation Fujitsu Limited, Colt Technology Services Limited are some of the key innovators in Data Center Interconnect Market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Huawei Technologies Co., Ltd., Cisco Systems, Inc., Ciena Corporation, Infinera Corporation, ADVA Optical Networking SE, Nokia Corporation, Juniper Networks, Inc., Fujitsu Limited, Colt Technology Services Group Limited, and Extreme Networks, Inc.
Recent Strategy Deployed in Data Center Interconnect Market
Partnerships, Collaborations and Agreements:
- Jan-2022: Nokia formed a partnership with IP Telecom, Ireland's most competitive SME & Enterprise VoIP provider. Following the partnership, Nokia is expected to provide optical networking equipment to IP Telecom to expand the operator’s data center cloud connectivity infrastructure among metro areas in Portugal. This expansion is expected to enable IP Telcom to reach companies and government end-users through an extremely safe, encrypted 100Gbps optical data center interconnect (DCI) solution.
- Nov-2021: Ciena signed an agreement with Digital Realty, the largest global provider of carrier- and cloud-neutral data center, colocation, and interconnection solutions. Following the agreement, the two companies is expected to together provide an open, safe, and dynamic cloud-based interconnectivity to customers across the Asia Pacific. Moreover, the new connectivity options further allow connected data communities on PlatformDIGITAL with the integration of Ciena’s DCI solution.
- Jul-2021: Ciena joined hands with Lumea, a market leader in digital pathology solutions. Through this collaboration, the companies is expected to together transform the telecom services of Lumea to provide customers high-speed 100G+ Wavelength services. The update provides regional connectivity for bandwidth-intensive applications utilized for medical imaging, telemedicine, and remote surgery support, as well as high-definition telepresence and real-time data backup.
- Jun-2021: Colt Technology Services came into a partnership with NorthC, the largest independent regional data center provider in the Spain. Following the partnership, customers can now get direct access to 100+ Gbps optimized connections and the whole Colt portfolio, including SDN-based services like Colt's On Demand services. NorthC's customers can connect their infrastructure directly to the network from NorthC's ten data centers in the Spain, providing organizations with rapid and flexible access to several top cloud providers to support their hybrid and multi-cloud setups. In addition, NorthC data centers provide connectivity to Colt's IQ Network, allowing businesses to execute their activities there.
- Nov-2020: Ciena teamed up with NTT Communications, a Japanese telecommunications company. Following the collaboration, NTT is expected to install a single-wave 800G line speed solution for Data Centre Interconnect (DCI). Moreover, the implementation is expected to support the company's vision of providing superior products and services rapidly and effectively.
- Nov-2020: Fujitsu Network Communications joined hands with EdgeUno, a company that is revolutionizing the way people experience the internet in LATAM. Following the collaboration, EdgeUno successfully installed the Fujitsu 1FINITY platform, rapidly expanding capacity in a high-speed, high-performance data center interconnect (DCI) network in Colombia to fulfill the tight timeline of a new enterprise service level agreement (SLA).
- Aug-2020: Ciena collaborated with NEXTDC, an Australian data center operator. Under this collaboration, Ciena Data Centre Interconnect (DCI) was selected by NEXTDC to assist in enhancing network scalability, specifically to enable cloud-based services and on-demand content. Moreover, NEXTDC is expected to install its DCI platform to connect its data centers and offer cloud and computing services to support NEXTDC’s customers existing across the company’s rising footprint across Australia.
Product Launches and Product Expansions:
- Sep-2021: Huawei introduced new updates in its CloudCampus 3.0 Solution. These updates include all-new Wi-Fi 6 APs, enterprise-class "cloud on-ramp" converged gateways, "Solar System" campus switches, and intelligent operations and maintenance (O&M) practices. In addition, Huawei's continued commitment to experience-centric university networks is supported by these advancements. In a variety of situations, including intelligent workspaces, intelligent buildings, and intelligent production, organizations is expected to benefit from premium totally wireless connectivity and excellent cloud access with such networks.
- Mar-2021: ADVA introduced its latest FSP 3000 data center interconnect (DCI) open line system (OLS) particularly developed for 400ZR technologies. By allowing commercial deployments of DCI infrastructure based on 400ZR, the new DCI OLS addresses the most pressing concerns for network operators. These high-density, low-cost, open technologies, which are intended for point-to-point applications up to 120 kilometers, is expected to be critical in rapidly expanding DCI capacity to meet soaring data demand.
- Jul-2021: Colt Technology Services introduced SD-WAN Remote Access, a function developed to fulfill the safe remote access requirements of its SD-WAN customers, as they shift towards a hybrid way of working. SD-WAN Remote Access provides users with safe access to the data and applications they require, independent of their physical location, based on their role or profile. Moreover, companies get end-to-end protection across their networks that can be easily managed through a ‘single pane of glass along with integrated security functions of Colt SD-WAN.
- Jul-2020: Nokia introduced Data Center Fabric Solution which includes a scaleable range of routers, the latest Network Operating System (NOS), and an Automation and Operations toolkit. Moreover, the solution also includes the Nokia 7250 Interconnect Routers (IXR), Nokia 7220 IXR-H series, and Nokia 7220 IXR-D series routers. Through this launch, the company aimed to automate and streamline data center operations. Moreover, the switching offering supports 400GE, 100GE, 50G, 40GE, 25GE, 10GE, and 1GE interfaces, as well as IP routing, layer two switchings, QoS, scalable telemetry, security, and model-driven management.
Acquisitions and Mergers:
- Sep-2021: Adva formed a merger with ADTRAN named ADTRAN Holdings. Following the merger, ADTRAN Holdings is expected to be formed that acts as a vendor for end-to-end fiber networking solutions for the communications service providers, government customers, and enterprise. The new company is expected to integrate ADTRAN's worldwide presence in fiber extension, fiber access, and subscriber connectivity solutions with ADVA's portfolio focus on metro wavelength division multiplexing, data center interconnect business Ethernet, and network synchronization solutions.
- Mar-2021: Cisco took over Acacia Communications, an optical networking strategy, and technology company. Following the acquisition, Cisco is expected to enhance its vision to optics as a crucial step that is expected to improve its 'Internet for the Future' vision with best-in-class coherent optical solutions for customers, further allowing them to manage the unparalleled scale of modern IT. Moreover, Cisco is dedicated to assisting Acacia's current clients as well as future customers who require industry-leading coherent optics, digital signal processing/photonic integrated circuit modules, and transceivers for usage in networking products and data centers.
Scope of the Study
Market Segments Covered in the Report:
By Type
- Products
- Packet-Switching Networking
- Optical DCI
- Software
- Services
By End User
- Internet Content Providers/ Carrier-Neutral Providers
- Communication Service Providers
- Enterprises
- Government
By Application
- Real-time Disaster Recovery & Business Continuity
- Shared Data & Resources/Server High-availability Clusters (Geoclustering)
- Workload (VM) & Data (Storage) Mobility
By Geography
- North America
- US
- Canada
- Mexico
- Rest of North America
- Europe
- Germany
- UK
- France
- Russia
- Spain
- Italy
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- South Korea
- Singapore
- Malaysia
- Rest of Asia Pacific
- LAMEA
- Brazil
- Argentina
- UAE
- Saudi Arabia
- South Africa
- Nigeria
- Rest of LAMEA
Key Market Players
List of Companies Profiled in the Report:
- Huawei Technologies Co., Ltd.
- Cisco Systems, Inc.
- Ciena Corporation
- Infinera Corporation
- ADVA Optical Networking SE
- Nokia Corporation
- Juniper Networks, Inc.
- Fujitsu Limited
- Colt Technology Services Group Limited
- Extreme Networks, Inc.
Unique Offerings from the Publisher
- Exhaustive coverage
- The highest number of market tables and figures
- Subscription-based model available
- Guaranteed best price
- Assured post sales research support with 10% customization free
Table of Contents
Chapter 1. Market Scope & Methodology
Chapter 2. Market Overview
Chapter 3. Competition Analysis - Global
Chapter 4. Global Data Center Interconnect Market by Type
Chapter 5. Global Data Center Interconnect Market by End-User
Chapter 6. Global Data Center Interconnect Market by Application
Chapter 7. Global Data Center Interconnect Market by Region
Chapter 8. Company Profiles
Companies Mentioned
- Huawei Technologies Co., Ltd.
- Cisco Systems, Inc.
- Ciena Corporation
- Infinera Corporation
- ADVA Optical Networking SE
- Nokia Corporation
- Juniper Networks, Inc.
- Fujitsu Limited
- Colt Technology Services Group Limited
- Extreme Networks, Inc.
Methodology
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