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The pluggable optics for data center market size was valued at US$ 5.23 billion in 2023 and is expected to reach US$ 12.35 billion by 2031. The pluggable optics for data center market is estimated to record a CAGR of 11.3% from 2023 to 2031. The expansion of linear pluggable optics is likely to trend in the market during the forecast period.
Pluggable Optics for Data Center Market Analysis
Rising adoption of the Internet of Things (IoT), increasing need for storage for massive amounts of data, and growing digitalization are propelling the demand for data centers. It is an excellent data storage solution that provides companies with fast and secure access to vast data. Centralized data management, scalability, and security encourage businesses to adopt these solutions to achieve a data-driven business landscape. Thus, several companies are investing in the development of data centers in North America. According to Linklaters, North America has maintained its lead in data center transaction values, accounting for an impressive 62% of the global total in 2023 and 69% of investments through April 2024, totalling US$ 15 billion, with the US accounting for the largest share of the total.
Pluggable Overview
Pluggable optics are interchangeable transceiver modules that connect various network components, including switches, routers, and servers, to convert high-speed electrical signals into optical signals and vice versa. Pluggable optics are most commonly used in data center optics as they are flexible, scalable, and compatible with a broad range of networking devices and standards. One advantage of pluggable optics is that the user can tailor the transceiver inside the module to the data rate and other network architecture requirements, while other optical interconnects use light to transmit data within a compute architecture. The demand for pluggable optics is increasing in data centers, owing to their benefits, such as cost-effectiveness, wide compatibility, and ability to reduce power consumption. They are typically a high-speed and low-power solution and are compatible with various other devices.
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Pluggable Optics for Data Center Market: Strategic Insights
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We can optimize and tailor the analysis and scope which is unmet through our standard offerings. This flexibility will help you gain the exact information needed for your business planning and decision making.
Pluggable Optics for Data Center Market: Strategic Insights
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Naveen will walk you through a 15-minute call to present the report’s content and answer all queries if you have any.
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Pluggable Optics for Data Center Market Drivers and Opportunities
Focus on Product Development to Favor Market
Pluggable optics enable data center operators to easily upgrade or replace transceivers without having to completely rebuild the cable system. The rising demand for pluggable optics in data centers encourages manufacturers to develop new innovative products that are capable of meeting the dynamic requirements of customers. For instance, in March 2024, Infinera Corporation launched a new line of ICE-D to improve intra-data center connectivity. ICE-D is a new line of high-speed intra-data center optics based on monolithic indium phosphide (InP) and photonic integrated circuit (PIC) technology. ICE-D optics are designed to significantly reduce cost and power per bit while offering intra-data center connectivity at speeds of 1.6 terabits per second (Tb/s) or more. This technology allows data center operators to keep up with the ever-increasing demand for bandwidth while being cost-effective.
Growing Demand for Energy Efficiency
The advent of green data centers is another factor that contributes to the growing demand for energy efficiency. Green data centers are sustainable data centers that use energy-efficient technologies to reduce energy consumption and environmental impact. Businesses are shifting toward green data centers to reduce data center costs and minimize carbon impact. This can be achieved by using energy-efficient equipment and components, which can generate the demand for compact and highly integrated pluggable optics as they are more energy efficient. Installing pluggable optics could save network operational expenditures such as cooling costs. Therefore, the demand for energy-efficient solutions is a key factor that results in the deployment of pluggable optics and can create lucrative opportunities for the pluggable optics for data center market growth.
Pluggable Optics for Data Center Market Report Segmentation Analysis
Key segments that contributed to the derivation of the pluggable optics for data center market analysis are component and data rate.
- In terms of component, the market is segmented into switches, routers, and servers. The switches segment dominated the market in 2023.
- Based on data rate, the market is categorized into 100–400 Gb/s, 400–800 Gb/s, and 800 Gb/s and above. The 400–800 Gb/s segment dominated the market in 2023.
Pluggable Optics for Data Center Market Share Analysis by Geography
The geographic scope of the pluggable optics for data center market report is mainly divided into five regions: North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South America (SAM).
Germany, France, the UK, and Italy are among the key countries contributing to the growth of the European pluggable optics for data center market. The overall volume of data is increasing exponentially, resulting in strong demand in the European data center industry. Rapidly expanding technologies such as artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT) are driving up demand for pluggable optics, which is expected to continue to surpass supply over the next three to five years. For instance, according to TMT Consultants Ltd data published in June 2024, the use of AI technology and data storage capacity is growing in European data centers.
The pluggable optics for data center market in Germany is projected to expand at a significant rate in the upcoming years due to the growing investment and increasing IT capacity of colocation data centers. According to a Data Center Impact Report, Germany 2024, published by the GERMAN DATACENTER ASSOCIATION e.V., data center in Germany is expected to receive an investment of more than US$ 26.58 billion (24 billion euros) for the expansion of colocation capacity by 2029. According to the same source mentioned above, the IT capacity of colocation data centers in Germany is expected to expand from 1.3 GW to 3.3 GW by 2029. The growing capacity expansion of data centers, increase in data processing demand, and increasing investment to develop data centers are among the factors driving the market.
Pluggable Optics for Data Center Market Report Scope
Pluggable Optics for Data Center Market News and Recent Developments
The pluggable optics for data center market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the developments in the pluggable optics for data center market are listed below:
- Nokia Corp announced a comprehensive set of new optical transport solutions optimized for metro edge deployments for CSP, webscale and Enterprise customers. The company's portfolio additions include 100 Gb/s, 400 Gb/s, and 800 Gb/s pluggable coherent modules, a new compact optical transport platform and new cards optimized for metro edge applications. (Source: Nokia Corp, Press Release, March 2024)
- Infinera announced to have expanded its partnership with APRESIA Systems, Ltd. (APRESIA), a Japanese provider of network infrastructure solutions, through the integration of Infinera’s software-programmable ICE-X coherent pluggables into APRESIA’s portfolio of locally manufactured Layer 2/3 switching and optical transmission products. Infinera’s ICE-X coherent pluggables enable APRESIA to enhance its access network solutions and offer its customers increased operational value, including new revenue-generating services, reduced CapEx and OpEx, and maximized utilization of fiber assets. (Source: Infinera, Press Release, July 2024)
Pluggable Optics for Data Center Market Report Coverage and Deliverables
The “Pluggable Optics for Data Center Market Size and Forecast (2021–2031)” report provides a detailed analysis of the market covering below areas:
- Pluggable optics for data center market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
- Pluggable optics for data center market trends as well as market dynamics such as drivers, restraints, and key opportunities
- Detailed PEST/Porter’s Five Forces and SWOT analysis
- Pluggable optics for data center market analysis covering key market trends, global and regional framework, major players, regulations, and recent market developments
- Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments for the pluggable optics for data center market
- Detailed company profiles
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
This text is related
to segments covered.
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
This text is related
to country scope.
Frequently Asked Questions
The market is expected to grow at a CAGR of 11.3% during the forecast period.
The estimated value of the pluggable optics for data center market is expected to reach US$ 12.35 billion by 2031.
Coherent Corp, Nokia Corp, Cisco Systems Inc, Infinera Corp, and Telefonaktiebolaget LM Ericsson are among the leading players in the pluggable optics for data center market.
The expansion of linear pluggable optics is likely to trend in the market during the forecast period.
The manufacturers’ focus on product development, growing number of data centers globally, and rising need for high-performance computing are factors anticipated to fuel the pluggable optics for data center market.
North America dominated the pluggable optics for data center market in 2023.
The List of companies - Pluggable Optics for data center market
- Coherent Corp
- Nokia Corp
- Cisco Systems Inc
- Infinera Corp
- Telefonaktiebolaget LM Ericsson
- Ciena Corp
- Intel Corp
- Lumentum Holdings Inc.
- Juniper Networks Inc
- Marvell Technology Inc
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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