A significant driver for innovation in the optical market, data center interconnect (DCI) is the fastest-growing application for optical networking equipment, according to a new study from business information provider IHS Markit. Eighty-six percent of service providers polled for the Optical Network Applications Survey have plans to support DCI applications in their networks.
“Data center interconnect is enjoying a meteoric rise as the hottest segment in the optical networking applications space,” said Heidi Adams, senior research director for transport networks at IHS Markit. “Service providers are becoming increasingly invested in the DCI market, both for providing interconnect between their own data centers and for offering DCI services to internet content providers and enterprises. We estimate that service providers will account for around half of all DCI equipment spending in 2018.”
The optical data center equipment market reached $1.4 billion in sales in the first half of 2018, posting 19 percent year-over-year growth, according to IHS Markit. A key driver of the market is the compact DCI sub segment, which notched a 173 percent growth rate during this same time period.
“‘Compact’ DCI equipment is designed to fit within a data center environment from the form factor, power consumption and operational perspectives,” Adams said. “It’s optimized to meet the requirements of internet content providers like Google, AWS, Facebook, Microsoft and Apple.”
The top three vendors in the compact DCI sub segment are Ciena, Infinera and Cisco, who collectively account for three-quarters of the market.
Additional DCI highlights
- Cost per port is the leading criterion among survey respondents for the selection of equipment for DCI applications.
- 100G is the main currency for line-side DCI interfaces in 2018, declining in favor of 400G by 2021.
- IHS Markit forecasts the total DCI market to grow at a 15 percent compound annual growth rate (CAGR) from 2017 to 2022, representing a higher rate of growth than the overall WDM market.
This survey analyzes the trends and assesses the needs of service providers using emerging optical networking architectures. It covers data center interconnect, packet-optical equipment and software-defined networking for transport networks. For the survey, IHS Markit interviewed 22 service providers who have deployed packet-optical transport, optical DCI and/or transport SDNs or will do so in the future.
This biannual report provides worldwide and regional vendor market share, market size, forecasts through 2022, analysis and trends for data center interconnect equipment, packet-optical transport systems, and OTN transport and switching hardware.