Data Center Interconnect Market Size To Reach USD 29.78 Billion In 2032

2025-10-08 10:06:10

(MENAFN- Market Press Release) October 8, 2025 3:52 am - The Data Center Interconnect market was valued at USD 11.56 billion in 2024 and is expected to register a revenue CAGR of 12.8%.

September 08, 2025 - Increasing adoption of cloud services is a major driver of revenue growth in the data center interconnect market. Enterprises are now shifting their operations and workloads to cloud environments. It is fueling the demand for fast, secure, and scalable interconnections between data centers. This growing reliance on cloud-based infrastructure requires seamless data transfer, low latency, and high availability across geographically dispersed facilities. This trend has accelerated investments in optical networking technologies and software-defined networking (SDN) solutions that enhance data center connectivity.

In addition, rising investment by major telecom operators to expand data center infrastructure is driving revenue growth of the market. In October 2025, for instance, Telecom Italia Enterprise (TIM) announced plans to invest €1 billion (US$1.1 billion) over the next three years to strengthen its data center operations in Italy. The investment includes €105 million (US$122 million) dedicated to developing Edge cloud infrastructure aimed at providing low-latency services, constructing a new AI-ready data center, and upgrading its two existing facilities. Additionally, TIM Group has formed strategic alliances with major global cloud providers, including Google, Oracle, and Microsoft. The development of Edge and AI-ready data centers increases the need for robust data transfer and synchronization capabilities, directly driving revenue growth of the market.

However, complexity in network management is a significant factor restraining revenue growth of the market. The rapid expansion of data center footprints and the growing adoption of hybrid or multi-cloud environments are making it increasingly difficult for organizations to manage network configurations, bandwidth allocation, and real-time data flows. The integration of diverse hardware, protocols, and software-defined components leads to interoperability issues and operational inefficiencies. These challenges slow down deployment and optimization efforts, limiting the pace of DCI market expansion.

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Segments Market Overview and Growth Insights:
Based on end-use, the data center interconnect market is segmented into Communications Service Providers (CSPs), Internet Content Providers (ICPs), government, and enterprises. Enterprises segment is further sub-segmented in banking and finance, healthcare, utility and power, media and entertainment, retail & e-commerce and others.

The Communications Service Providers (CSPs) segment held the largest market share in 2024, driven by growing demand for high-bandwidth, low-latency connectivity to enable cloud services, video streaming, and data-intensive applications. The surge in mobile data usage, continued rollout of 5G networks, and increasing adoption of edge computing are encouraging CSPs to make significant investments in DCI solutions. In August 2024, Wavelo launched its“Free Your Data” platform, a breakthrough solution that helps CSPs accelerate their AI initiatives by unlocking data trapped in legacy BSS/OSS systems. The platform transforms static APIs into dynamic, real-time event streams, enabling instant data access without the need for expensive system replacements.

Regional Market Overview And Growth Insights:
North America dominated the market in 2024, supported by robust digital infrastructure, accelerated cloud adoption, and substantial investments in hyperscale data centers across the U.S. and Canada. In June 2025, data center construction spending in the U.S. reached a record annualized level of USD 40 billion, fueled by major technology companies expanding their AI infrastructure. The rapid growth of generative AI and machine learning applications is driving demand for higher computing capacity, prompting industry leaders such as Microsoft, Alphabet, and Amazon to commit significant capital toward developing advanced data center networks.

Competitive Landscape and Key Competitors:
The Data Center Interconnect market is characterized by a fragmented structure, with many competitors holding a significant share of the market. List of major players included in the market report are:

oCiena Corporation
oInfinera Corporation
oCisco Systems, Inc
oNokia Corporation
oHuawei Technologies Co., Ltd
oJuniper Networks, Inc
oArista Networks, Inc
oADVA Optical Networking SE
oZTE Corporation
oA10 Networks, Inc
oFujitsu Limited
oExtreme Networks, Inc
oViavi Solutions Inc
oLumentum Holdings Inc
oColt Technology Services Group Ltd
oBroadcom

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Major Strategic Developments By Leading Competitors:
Broadcom: On August 04, 2025, Broadcom Inc., a leading provider of semiconductor and infrastructure software solutions, has announced the shipment of its Jericho4 Ethernet fabric router, a specialized platform designed for next-generation distributed AI infrastructure. Capable of connecting over one million XPUs across multiple data centers, Jericho4 surpasses traditional scaling limitations by delivering exceptional bandwidth, security, and lossless performance. Alongside Tomahawk 6 and Tomahawk Ultra, Jericho4 completes Broadcom's comprehensive networking portfolio for high-performance computing (HPC) and AI applications.

HGC Global Communications Limited: On 26 November 2024, HGC Global Communications Limited (HGC) introduced a new Data Center Interconnect (DCI) solution in the Philippines, linking eight major data centers across the nation. The ICT company highlighted that the initiative aims to meet the growing demand for efficient and seamless data center connectivity domestically and across the broader region.

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Navistrat Analytics has segmented global data center interconnect market on the basis of component, bandwidth, technology, application, end-use and region:
.Component (Revenue, USD Billion; 2022-2032)
oHardware
oSoftware
oServices

.Technology Outlook (Revenue, USD Billion; 2022-2032)
oSynchronous Optical Network (SONET)
oDense Wavelength Division Multiplexing (DWDM)
oEthernet
oFiber Channel
oOptical Transport Network (OTN)
oInfiniBand
oOthers

.Bandwidth Outlook (Revenue, USD Billion; 2022-2032)
oLow Bandwidth (Up to 1 Gbps)
oMedium Bandwidth (1-10 Gbps)
oHigh Bandwidth (10-100 Gbps)
oUltra-High Bandwidth (Above100 Gbps)

.Application Outlook (Revenue, USD Billion; 2022-2032)
oContent Delivery
oDisaster Recovery
oShared data and resources
oWorkload Mobility
oData Replication
oOthers

.End-Use (Revenue, USD Billion; 2022-2032)
oCommunications Service Providers (CSPs)
oInternet Content Providers (ICPs)
oGovernment
oEnterprises
a and Healthcare
c and Power
d and Entertainment
e & E-commerce
oOthers

.Regional Outlook (Revenue, USD Billion; 2022-2032)
oNorth America
oEurope
oAsia Pacific
oLatin America
oMiddle East & Africa

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