January 21, 2015
Rapidly growing demand to interconnect data centres will help the optical network (ON) equipment market to grow by 3% per year to reach US$17 billion by 2019, according to new research from Ovum, the global market analysis firm.
Revenues for data centre interconnect (DCI) equipment have surpassed US$3 billion globally on an annualized basis, with Internet content and cloud providers emerging as an important new market segment.
“Spending on DCI is having a material effect on the market, particularly in North America where many of the Internet and cloud providers have large networks connecting hyper-scale data centers,” said Ian Redpath, principal analyst at Ovum. “Our capex research indicates that Internet content providers (ICPs), whose primary business is the creation, storage, and dissemination of digital information, and carrier-neutral providers are spending heavily on data center infrastructure, including optical transmission for DCI. Shipments of 100GbE equipment in particular are growing strongly in the Internet content and carrier-neutral markets.”
According to Redpath, a number of vendors are jostling for market leadership in the DCI market in North America including Adva Optical Networking, Alcatel-Lucent, BTI Systems, Ciena, Cisco, and Infinera.
While Alcatel-Lucent and Ciena have been traditionally strong players in the carrier-neutral and Internet content provider (CN/ICP) market in North America, preliminary data through 3Q14 indicates that Infinera is the fastest growing company in this sector.
Other companies with strong growth in the region include Adva Optical Networking and BTI Systems. Ovum kicked off a DCI spending study in September 2014 with expected completion in April 2015.
North America is expected to be the biggest region for DCI in 2015 due, in part, to the rapid emergence of CN/ICP as an important segment, particularly for 100GbE, the firm said.