Global Data Center Interconnect Market

The global Data Center Interconnect Market was calculated at USD 6.46 Billion in 2021 and is estimated to reach USD 10.19 Billion by 2028, growing at a CAGR of 12.21% from 2022 to 2028. The global Data Center Interconnect Market has noticed strong augmentation due to the growing demand for high-speed Ethernet and enhanced data connectivity across devices and applications. The growing cloud computing and the current surge in OTT services consumption due to national lockdown also extend the studied market size. Moreover, the growing commercialization of 5G services may further extend the scope of data center interconnected solutions.

What is Data Center Interconnect?

Datacenter interconnects (DCI) refer to networking various data centers to achieve business or IT purposes. DCI incorporates routers and servers or multi-tenant data centers to get users and data to the proper cloud applications and services. It’s a whole idea that includes connectivity solutions over several network layers. DCI can be created from the optical layer, packet-optical technology, or the packet layer with controls and routers. It can be a period of completed service rendered by an operator, or it can be a solution. DCI is also an effective tool for sharing data with third-party providers and financial exchanges in a bank’s digital services ecosystem. Businesses are just beginning to move their IT resources to multi-tenant and public clouds. As this trend accelerates, DCI connectivity between the company and cloud data centers will increase in lockstep.

Growth Drivers

Increasing migration to cloud-based explanations

With the onset of web-based applications, the app architecture was so effortless that it could efficiently host multiple apps on a transmitted server. It took place without any substantial settlements on implementation. However, with the increase in users and the sophistication of apps, shared hosting became ineffective. Businesses emigrated their apps to devoted VPS hosting solutions that were unsuitable for long and began to fail the users. Business proprietors had no choice but to purchase an exclusive reliable server. The first challenge they faced was migrating the application to the new VPS server. However, businesses soon discovered that the massive cost of the server was not worth it. A significant portion of server resources was left idle most of the time. Since the businesses were expanding for the whole server regardless of resource utilization, they established that reliable servers were an incorrect business judgment. It pushed businesses to opt for cloud-based solutions.

Opportunities

Growing disaster recovery and business continuity conditions

Disaster recovery is a significant trouble for data centers users across the world. IT infrastructure facilities are inclined to earthquakes, security aggression, fire outages, and other unexpected events. Proper disaster recovery efforts must be in place for businesses to avoid severe failures due to such disasters. Datacenter interconnection structures are located away from the users’ premises and are less prone to disasters. These aptitudes can be managed remotely, increasing their reliability in disaster recovery measures. Therefore, interconnection facilities will become an ideal backup and recovery option because they enable businesses to house key data remotely. Thus, it can achieve business continuity due to resilient and safe Data Center Interconnect solutions, which is why they are predicted to notice a growing market.

Restraints

The high initial investment needed in setting up data centers

Several factors require to be considered while arranging up a data center. These elements include engineering, access and approvals, power methods, generators with enclosures, conduit and cabling, data center lighting, lighting security, HVAC, fire suppression, etc. These expenses can add up quickly to the capital investments.

Pre Covid-19 Impact on Global Data Center Interconnect Market

Before the covid-19 outbreak, the demand for colocation data center space emerges strong. Sectors such as over-the-top, video streaming, and gaming are predicted to operate the cloud at the highest rate. There has also been aggressive growth in demand for educational access to cloud platforms. The increase in migration toward the cloud across the globe acts as one of the major factors driving the growth of the data center to interconnect the market.

Covid-19 Impact on Global Data Center Interconnect Market

During the COVID-19 outbreak, the pandemic has affected the data center interconnect market. Halted grounded Construction of data centers in some locations, but this was not the case everywhere. The Halted the construction projects in Europe completely for worker safety. Further, they had temporarily suspended pre-construction activities like permitting. The response in Southeast Asia had been mixed. Singapore had instituted a temporary moratorium on construction activities, but Thailand allowed construction projects, albeit with decreased workdays, to enable workers to return home during curfews. Within the scope of Construction, monitored project management, service providers and suppliers for delivery capability. It ensured the early identification of bottlenecks and the selection of alternative solutions. The supply chains underwent some major disruptions.

Post Covid-19 Impact on Global Data Center Interconnect Market

After the Covid-19 explosion, the industry is encountering supply deficiencies or stopped shipments of data center equipment around the globe as workforces are decreased, and non-essential industries stop operations. The effect is noticed in the Asia-Pacific region, where most data center hardware components are produced and then trickled out to North America and Europe. Further, in the long run, this problem is predicted to cause many networks to bolster their colocation deployments as they prepare for full-service delivery in a world increasingly reliant on network connectedness.

Component Type Segmental Analysis

Based on Component Type segment. The market is bifurcated into Products, Software and Services. The services segment is calculated to notice the highest CAGR for the forecast period. Service allows obtaining critical targets, developing a talent set for developing the internal planning & control method, and remotely maintaining customers, IT infrastructure, and end-user systems.

Application Segmental Analysis

Based on the application segment, the Data Center Interconnect market is segmented into Workload and data mobility, Real-time disaster recovery, Workload Mobility, Data Storage Mobility, Shared Data Cluster and others. The Shared data clusters segment is estimated to witness the highest CAGR for the forecast period. Shared data clusters detect hardware/software faults and immediately provide a path to the application on the different systems without requiring administrative intervention.

Industry Vertical Segmental Analysis

Based on the Industry Verticals segment, the market is segmented into Government, Healthcare, BFSI, Retail, Media & Entertainment, IT & Telecom and others. The Retail segment is estimated to notice the highest CAGR for the forecast period. Increased employee versatility, choice of bring-your-own-device, and bring-your-own-application and big data explosion influence future needs and demands for enterprise data center interconnect solutions. These incorporate high performance, low latency, and secure optical WDM solutions.

Regional Segmental Analysis

Based on region segment, the market is classified into North America, Europe, Asia-Pacific, South America and The Middle East & Africa. The market in Asia-Pacific is expected to grow at the highest share during the forecast period. The Asia Pacific Data Center Interconnect market carries massive growth prospects due to the existence of different developing countries in the region, such as China, Japan, South Korea, and others, which are noticing growing adoption of DCI networks due to rising investments and latest developments with context to DCI offerings. For instance, In March 2019, Huawei Technologies established a new data center interconnect (DCI) offering. The medium combines 600-Gbps optical transmission with optical cross-connect (OCX) capabilities, along with the company’s Network Cloud Engine technology.

Competitors Analysis

The companies include Nokia Corp., Huawei Technologies Co., Cisco Systems, Inc., Fujistu Inc., Ciena Corp., Juniper Network Inc., Infinera Corp., Adava Optical Networking, Extreme Networks Inc., Brocade Communication Systems Inc., and other prominent players in the global data center interconnected market. Key Stakeholders

• Market research and consulting firms
• Data Centre Interconnect Market Associations
• Local Governments
• Regulatory bodies
• Data Centre Interconnect Market providers
• Suppliers
• Retailers
• Service Providers

Recent Developments

• In September 2021, Nokia Corporation and Infradata partnered to create an integrated IP/optical data center interconnect solution for NorthC Datacenters (NorthC), the biggest regional data center provider in the Netherlands. The solution forms a single virtual data center that connects 10 NorthC data centers. The high-speed Region Connect Ring enables NorthC to deliver its consumers fast, scalable and dedicated data center interconnection and cloud connectivity.
• In March 2021, Cisco Systems satisfied the accession of Acacia Communications, Inc. Acacia plans and manufactured high-speed, optical interconnect technologies that authorize webscale companies, service providers and data center operators to satisfy the fast-growing consumer demand for data.
• In November 2020, Ciena Corporation marked a contract with NTT Communications Corporation, the ICT solutions and international communications industry within the NTT Group, that deployed a single-wave 800G line speed solution for Data Center Interconnect (DCI) delivered by the Ciena Corporation.

Scope of the Report

Report Attribute	Details
Market Size Value in 2021	USD 6.46 Billion
The revenue forecast in 2028	USD 10.19 Billion
Growth Rate	CAGR of 12.21 % from 2022 to 2028.
Historical data	2018 – 2021
Forecast period	2022 – 2028
Region covered	North America, Europe, Asia-Pacific, South America, and Middle East & Africa
Key companies Profiled	The Companies include Nokia Corp., Huawei Technologies Co., Cisco Systems, Inc., Fujistu Inc., Ciena Corp., Juniper Network Inc., Infinera Corp., Adava Optical Networking, Extreme Networks Inc., and Brocade Communication Systems Inc. are the key players.

Market Modelling

By Component Type

• Product
• Software
• Services

By Deployment Type

• Small & Medium Enterprises
• Large Enterprises

By Application

• Real-Time
• Disaster Recovery
• Work Load Mobility
• Data Storage Mobility
• Shared Data Clusters
• Others

By Industry Vertical

• Government
• Healthcare
• BFSI
• Retail
• Media & Entertainment
• IT and Telecom
• Others

By Region

• North America
• Europe
• Asia-Pacific
• South America
• The Middle East & Africa

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