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Data Center Interconnect Market Size (2024 - 2029)

The data center interconnect market is experiencing significant growth, driven by the increasing demand for rapid and reliable connectivity among data center assets, fueled by advancements in technologies such as AI and High-Performance Computing. The expansion of cloud computing and the rise in over-the-top services have further contributed to the market's growth. Additionally, the commercialization of 5G services and the trend towards edge computing are expanding the market's scope. Despite challenges such as high connectivity costs and efficiency concerns due to distance, the market continues to expand as awareness of the benefits of data center interconnect solutions increases. The COVID-19 pandemic accelerated the demand for cloud services, further propelling the market's expansion.

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Market Size of Data Center Interconnect Industry

Data Center Interconnect Market Summary
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
Market Concentration Low

Major Players

Data Center Interconnect Market Major Players

*Disclaimer: Major Players sorted in no particular order

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 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
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Data Center Interconnect Market Size Summary

The Data Center Interconnect (DCI) market is experiencing significant growth, driven by the increasing demand for rapid and reliable connectivity between data centers. This demand is fueled by the proliferation of data, advancements in technologies such as AI and High-Performance Computing, and the expansion of cloud computing and OTT services. The market is further bolstered by the commercialization of 5G services and the rise of edge computing, which necessitates efficient data processing and sharing across distributed networks. Key players in the industry, including major hyperscale data centers like Amazon, Google, and Equinix, are investing in advanced interconnection solutions to enhance bandwidth, reduce latency, and improve data security. The market's expansion is also supported by the growing awareness of the benefits of DCI, such as enhanced accessibility, convenience, and data encryption.

In Europe, the DCI market is witnessing substantial investments due to the increasing adoption of cloud technologies and the need for compliance with regional data protection regulations. Countries like Germany, the United Kingdom, the Netherlands, and France are leading the charge in adopting and investing in DCI solutions. The market is characterized by a fragmented landscape with both global players and SMEs offering a range of interconnection services. Strategic partnerships, mergers, and product innovations are common as companies strive to enhance their service offerings and expand their market reach. Notable developments include Nokia's provision of advanced interconnect hardware in Europe and Africa, and collaborations between companies like Cologix and Console Connect to enhance digital edge linkages. These efforts are aimed at meeting the growing demand for interconnected digital infrastructure and supporting the rapid digitization and data traffic growth observed globally.

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Data Center Interconnect Market Size - Table of Contents

  1. 1. MARKET INSIGHTS

    1. 1.1 Market Overview

    2. 1.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 1.2.1 Bargaining Power of Suppliers

      2. 1.2.2 Bargaining Power of Consumers

      3. 1.2.3 Threat of New Entrants

      4. 1.2.4 Threat of Substitutes

      5. 1.2.5 Intensity of Competitive Rivalry

    3. 1.3 Industry Value Chain Analysis

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Application

      1. 2.1.1 Disaster Recovery and Business Continuity

      2. 2.1.2 Shared Data and Resources

      3. 2.1.3 Data (Storage) Mobility

      4. 2.1.4 Other Applications

    2. 2.2 By End-user Industry

      1. 2.2.1 Communications Service Providers (CSPs)

      2. 2.2.2 Internet Content and Carrier- neutral Providers (ICPs/CNPs)

      3. 2.2.3 Government/Research and Education (Government/R&E)

      4. 2.2.4 Other End-user Verticals

    3. 2.3 By Geography

      1. 2.3.1 North America

      2. 2.3.2 Europe

      3. 2.3.3 Asia Pacific

      4. 2.3.4 Rest of the World

Data Center Interconnect Market Size FAQs

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.

In 2024, the Data Center Interconnect Market size is expected to reach USD 14.12 billion.

Data Center Interconnect Solution Market Report Snapshots

Data Center Interconnect Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)