The global optical data center interconnect market has grown by 26%, reaching US% 2.6 billion last year – according to IHS Markit.

By 2022, IHS Markit predicts this market will exceed US$5 billion in annual sales, representing close to 30 per cent of all wavelength division multiplexing equipment spending.

The firm’s biannual DCI, OTN and packet-optical hardware report provides worldwide and regional vendor market share, market size, forecasts through 2022, analysis and trends for OTN transport and switching hardware, packet-optical transport systems and data center interconnect equipment.

“The optical DCI equipment market experienced very strong momentum in 2017,” said Heidi Adams, senior research director, IP and optical networks, IHS Markit. “Moving forward we are forecasting continuing growth as service providers, internet content providers and enterprises make additional investments to connect expanding and proliferating data center facilities.”

Within the optical DCI market, the compact DCI transport equipment sub-segment grew by over 200 per cent in 2017, reaching US$483 million in revenue. The analyst firm said this segment will continue to grow over time, as digital transformation continues at enterprises worldwide and as more and more content – including enterprise applications and video – is hosted and delivered via the Cloud.

Compact DCI equipment is also notable as it represents a broader industry trend toward optical equipment disaggregation – where different functions in the optical network can be addressed by open hardware platforms and linked together through software-defined networking controllers and applications, it said.

“As disaggregated equipment configurations get proven out in DCI applications, we can see usage expanding to address other areas in metro optical and enterprise applications,” Adams said.