Data Center Interconnect Market Size Global Forecast to 2026 | MarketsandMarkets

The data center interconnect market is projected to grow from USD 8.6 billion in 2021 to reach USD 17.0 billion by 2026; it is expected to grow at a CAGR of 14.5% from 2021 to 2026.

The rising migration to cloud-based solutions, growing borderless nature of global economy coupled with surging consumption of OTT services due to nationwide lockdown imposed on account of COVID-19 is expected to fuel the growth of the data center interconnect market.

Driver: Rising migration to cloud-based solutions

With the onset of web-based applications, the app architecture was so effortless that multiple apps could be easily hosted on a shared server. This took place without any significant compromises on performance. However, with the increase in the number of users and the complexity of apps, shared hosting became ineffective. Businesses migrated their apps to dedicated VPS hosting solutions that were not suitable for long and began to fail the users. Business owners had no option but to purchase an entire dedicated server. The first challenge they faced was the migration of the application to the new VPS server. However, businesses soon realized that the massive cost of the server was not worth it. Most of the time, a significant portion of server resources were left idle. Since the businesses were paying for the entire server regardless of resource utilization, the dedicated server proved to be a wrong business decision. This pushed businesses to opt for cloud-based solutions. Migration to cloud simplifies the process of setting up applications that users can access using their browsers instead of downloading them on their devices.

Restraint : High initial investment required in setting up data centers

Several aspects need to be considered while planning to set up a data center. These aspects include engineering, permits and approvals, power systems, generators with enclosures, conduit and cabling for generators, data center lighting, lighting protection, HVAC, fire suppression, etc. These costs can add up quickly to the capital investments.

Opportunity : Increasing disaster recovery and business continuity requirements

Disaster recovery is a major concern for data centers users across the world. IT infrastructure facilities are prone to disasters such as earthquakes, security attacks, fire outages, and other unplanned events. For businesses to not suffer from drastic losses owing to such disasters, proper disaster recovery measures must be in place. Data center interconnection facilities are located away from the users’ premises and be less prone to disasters. These facilities can be controlled remotely, adding to their reliability in disaster recovery measures. Therefore, interconnection facilities are anticipated to become an ideal backup and recovery option because they enable businesses to house key data in a remote location. Thus, business continuity can be achieved due to the presence of resilient and safe DCI solution, which is why these solutions are expected to witness growing demand.

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Challenge: Capacity limitations

Data centers store and deliver data as required by applications. Very often, the size of datasets entering or leaving a data center can be enormous, ranging from hundreds of Gigabits to Terabits. Skyrocketing video, social media, and distributed application traffic pose significant capacity planning and network engineering challenges for data center operators. New type of workloads such as analytics, machine learning and IoT are posing significant capacity limitations. Thus, the networking equipment used to connect data centers must be capable of providing reliable, high-capacity connections that can be scaled to address tremendous growth requirements in data center traffic.

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