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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