Revenues for data center interconnect (DCI) continue to grow at a rapid pace according to a recently completed market study* by Ovum, a global analyst firm. 2014 revenues of US$2.5bn grew more than 16% from 2013. Nearly one-half of all DCI spending in 2014 was from communications service providers (CSPs) but the Internet content provider (ICP) segment grew 64% on the year.
According to the study, the DCI market is particularly strong in North America, where ICPs and carrier-neutral providers (CNPs) account for the majority of DCI spending. Here are some of the key findings:
- Enterprise IT evolution to cloud and the explosive growth of video is driving strong growth in data center builds and fundamentally changing how networks are constructed.
- The ongoing surge in DC build-outs has made DCI the fastest growing application for optical networking (ON) equipment. DCI revenues grew 16.2% in 2014, surpassing US$2.5bn.
- Most data center operators lease managed DCI services from CSPs, but a growing number of ICPs (e.g. Google, Facebook) and enterprises are securing fiber assets and building their own interconnect networks, increasing the opportunity for optical networking (ON) vendors.
- Growth in the number of data centers clustered in metro and campus environments is increasing the requirement for high-capacity, low-cost optical networking gear that is fundamentally different than traditional metro ON equipment.
- Ciena is the global market share leader for the total DCI market. By segment, Ciena also leads the Government/R&E and Enterprise end-user segments. Alcatel-Lucent leads the CSP market, while Infinera leads the ICP/CNP combined segment.
- The global DCI market is projected to grow at 10.5% CAGR in the 2014–19 period, surpassing US$4.2bn in 2019. DCI growth is strongest in the ICP segment, which is slated to grow at a 12% CAGR for 2014–19.
Ron Kline, Principal Analyst, Intelligent Networks at Ovum, said “2015 is shaping up to be a very exciting year as metro-optimized 100G and adaptable-rate flex-spectrum 200G/400G capabilities enter the DCI market. We see tremendous opportunity for specialists such as Adva Optical Networking, BTI Systems, and Infinera to challenge their much bigger rivals for a larger share of this booming market.”
NOTES TO EDITORS
*Opportunities for Optical Data Center Interconnect: market landscape, sales forecast, and competitive analysis
To arrange an interview with Ron Kline or for further details regarding this release, please contact Ovum press office on +44 (0) 20 7017 4994 / +613 9601 6723, or email email@example.com
Ovum is a leading global technology research and advisory firm. Through its 180 analysts worldwide it offers expert analysis and strategic insight across the IT, telecoms, and media industries. Founded in 1985, Ovum has one of the most experienced analyst teams in the industry and is a respected source of guidance for technology business leaders, CIOs, vendors, service providers, and regulators looking for comprehensive, accurate, and insightful market data, research, and consulting. With 23 offices across six continents, Ovum offers a truly global perspective on technology and media markets and provides thousands of clients with insight including workflow tools, forecasts, surveys, market assessments, technology audits, and opinion. In 2012, Ovum was jointly named Global Analyst Firm of the Year by the IIAR.
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