Data Center Interconnect Market Size Worth USD 38.28 Billion in 2032 | Emergen Research

Vancouver, Jan. 29, 2024 (GLOBE NEWSWIRE) -- The global data center interconnect(DCI) market size was USD 9.83 Billion in 2022 and is expected to register a revenue CAGR of 14.5% during the forecast period. Changing preferences among individuals and organizations to shift toward cloud-based solutions and growing trend of increased consumption of Over-The-Top (OTT) services is expected to drive market revenue growth. Over-The-Top (OTT) services have transformed from a specialized streaming option to one of the most widely used methods of watching Television (TV) in only a few short years. In reality, broadcast TV lost ground to streaming video in terms of audience share and income this year.

Globally, there are around 6.64 billion smartphones that can run apps, and 83.72% of individuals have one. Rather than using browsers, mobile, and TV, apps are where individuals view videos 65% of the time. With a 37% share of TV viewing time across North America in Q1 2021, Roku was the most widely used OTT TV app. According to the number of downloads globally in 2021, Netflix (16.4 million), Amazon Prime Video (11.34 million), and iQiyi (5.5 million) were the three most widely used video streaming apps. Rising use for various OTT platforms is creating a high demand for data center interconnect, thus is expected to drive market revenue growth globally.

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Recently, organizations are generating huge volumes of data and for storing data cloud-based solutions are increasingly used for various reasons such as increasing agility and flexibility, ability to innovate faster, easing of increasing resource demands, and better management of increased customer expectations are creating a high demand for data center interconnect, thus is expected to drive market revenue growth. By 2025, almost 95% of data workloads are expected to be hosted on the cloud, up from 30% in 2021, according to research.

However, latency issues owing to long distances between data centers and high initial costs for setting up data centers and are major factors restraining revenue growth of the global data center interconnect market.

Segment Insights

Application Insights:

On the basis of application, the global data center interconnect market is segmented into real-time disaster recovery and business continuity, shared data and resources/server high-availability clusters, and workload and data mobility. The real-time disaster recovery and business continuity segment accounted for a comparatively larger revenue share in 2022. Critical data replication is typically done using Data Center Interconnects (DCI) to satisfy company compliance and continuity needs.

To increase resource efficiency and accessibility, IT can now move computing pools with Data Center Interconnect due to recent advancements in virtualization technology. The dependence on services running in Data Center Interconnects environments is increasing the need for IT and service providers to have visibility into performance and events that can affect end-user and business operations. To prevent interfering with most crucial services being delivered across these crucial links, managing the success of these services and essential Wide-Area Network (WAN) links requires an analysis solution that can identify baseline behavior and isolate performance degradation.

Type Insights:

On the basis of type, the global data center interconnect market is segmented into products, software, and services. The products segment is further sub-segmented into packet-switching networking and optical DCI. The services segment is sub-segmented into professional services and managed services. The optical DCI segment is expected to register highest revenue growth rate over the forecast period. A widely used architecture called Optical Data Centre Interconnect (DCI) offers high-density, layer 1 communication between two physically separate locations.

High bandwidth, quick scaling, and cost-effective solutions are offered by optical DCI networks for multi-site data center systems. DCI also gives businesses the ability to implement Quality of Service (QoS) and other performance-related policies. DCI allows businesses more choice in the way this service distributes workloads because it supports a variety of connection types. These factors are creating a high demand for data center interconnect services, thus is expected to drive revenue growth of this segment.

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Regional Insights:

Based on regional analysis, the market in North America accounted for a significantly large revenue share in 2022 owing to growing preference of individuals to adopt cloud-computing solutions. Technological advancements and rising investments in the Research and Development (R&D) process of major companies are expected to drive revenue growth of the market in this region. For instance, on 24 May 2023, Molex announced the launch of its first chip-to-chip 224G interconnects system for high-performance computing in data centers.

The system supports board-to-board connectors, backplanes, near-ASIC connector-to-cable solutions, and next-generation cables that can operate at up to 224 Gbps-PAM4 in speed. Up to 224 Gbps-PAM4 is an essential yet challenging technological inflection point and will necessitate entirely new system architectures with different chip-to-chip communication techniques. Molex used simulations and predictive analytics with client systems for full channel development of individual modules to guarantee highest levels of electrical, mechanical, physical, and signal integrity owing to the demanding electrical specifications.

The market in Europe is expected to register a moderately fast revenue growth rate over the forecast period. Factors such as growing emphasis on increasing data volumes, cloud computing adoption, big data analytics, disaster recovery, business continuity, Content Delivery Networks (CDNs), video streaming, and online gaming is creating a high demand for data center interconnect which is expected to drive revenue growth of the market in this region. Presence of key companies and increasing investments resulting in various product launches, and innovations, forming mergers and acquisitions, and entering into partnership agreements is also a major factor.

For instance, on 6 September 2022, Nokia announced that it is supplying DCspine, a division of Eurofiber Cloud Infra that offers digital infrastructure and interconnection services across data centers in Europe, with its 7220 IXR data center hardware solutions running SR Linux. Through automation, this solution will improve network operations and network scalability while expanding DCspine's connectivity and cloud offerings. As part of its interconnection platform, which offers connectivity to an increasing number of 80+ data centers in the Netherlands, Belgium, and Germany, DCspine will deploy the 7220 IXR and SR Linux.

Scope of Research

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Major Companies and Competitive Landscape

The global data center interconnect market is moderately fragmented, with many large and medium-sized players accounting for the majority of market revenue. Major players are deploying various strategies, entering into mergers & acquisitions, strategic agreements & contracts, developing, testing, and introducing more effective data center interconnect solutions. Some major players included in the global data center interconnect market report are:

• Ciena Corporation
• Nokia
• Huawei Technologies Co., Ltd.
• Juniper Networks, Inc
• Infinera Corporation
• Adtran Networks
• Cisco Systems, Inc.
• Extreme Networks
• Fujitsu
• Equinix, Inc.

Strategic Development

• On 15 June 2023, the largest carrier and data center-neutral interconnection network and the top Internet Exchange (IX) operator across the globe, DE-CIX announced its expansion forward with its newest Internet Exchanges in Esbjerg and Copenhagen (Denmark). With the advent of one access, all clouds, and every network, DE-CIX is introducing its InterconnectionFLEX service to Denmark. This service offers businesses a full interconnection package as a comprehensive solution for peering, cloud connectivity, and Private Network Interconnects (PNIs).

• On 15 June 2023, Equinix announced its launch of digital interconnection services for amplifying digital transformation in India. Equinix, Inc., the global leader in digital infrastructure, recently announced the opening of its digital interconnection services in India to meet the country's quickly expanding demand for digital infrastructure. Equinix wants to enable digital leaders in India to create the secure and adaptable digital infrastructure necessary to respond to today's increasingly dynamic business environments and succeed in the digital economy. These services include Equinix Fabric, Equinix Internet Exchange, and Equinix Internet Access.

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Segments Covered in Report

For the purpose of this report, Emergen Research has segmented the global data center interconnect market on the basis of type, application, end-use, and region:

• Type Outlook (Revenue, USD Billion; 2019-2032)
  • Products
    1. Packet-Switching Networking
    2. Optical DCI
  • Software
  • Services
    1. Professional Services
    2. Managed Services
• Application Outlook (Revenue, USD Billion; 2019-2032)
  • Real-time Disaster Recovery and Business Continuity
  • Shared Data and Resources/Server High-availability Clusters
  • Workload (VM) and Data (Storage) Mobility
• End-Use Outlook (Revenue, USD Billion; 2019-2032)
  • Communication Service Providers
  • Internet Content Providers
  • Governments
  • Enterprises
    1. Banking and Finance
    2. Healthcare
    3. Utility and Power
    4. Media and Entertainment
    5. Retail & E-Commerce
    6. Others
• Regional Outlook (Revenue, USD Billion; 2019–2032)
  • North America
    1. U.S.
    2. Canada
    3. Mexico
  • Europe
    1. Germany
    2. France
    3. U.K.
    4. Italy
    5. Spain
    6. Benelux
    7. Rest of Europe
  • Asia Pacific
    1. China
    2. India
    3. Japan
    4. South Korea
    5. Rest of APAC
  • Latin America
    1. Brazil
    2. Rest of LATAM
  • Middle East & Africa
    1. Saudi Arabia
    2. UAE
    3. South Africa
    4. Turkey
    5. Rest of MEA

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