Data Centre connectivity market is booming, says Ovum

Revenues for data centre interconnect (DCI) grew 16% to $2.5bn says Ovum, with half coming from CSPs (communications service providers) though with the fastest growth, at 64%, coming from ICPs (internet content providers).

Ovum’s Ron Kline

“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,” says Ovum’s Ron Kline, “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.”

The surge in data centre build-outs has made DCI the fastest growing application for optical networking (ON) equipment.

Most data centre operators lease managed DCI services from CSPs, but a growing number of ICPs (e.g. Google, Facebook) and enterprises are securing fibre assets and building their own interconnect networks, increasing the opportunity for optical networking (ON) vendors.

Growth in the number of data centres 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, to more than$4.2 billion in 2019.

DCI growth is strongest in the ICP segment, which is slated to grow at a 12% CAGR for 2014–19.