This article digs into the latest findings from Dell’Oro Group about the optical transport equipment market in 2025. The focus is on how data center interconnect (DCI) and disaggregated WDM systems fueled strong growth—and what all this might mean for 2026.
It pulls together vendor shifts, regional patterns, and the tech segments that really mattered. If you’re following networking infrastructure, cloud-scale buildouts, or the rise of AI-centric data centers, there’s something here for you.
2025 Market Snapshot: Growth Driven by DCI
The optical transport market jumped 10% in 2025, hitting roughly $16 billion as demand for high-capacity interconnect took off. DCI stood out, with direct purchases of WDM equipment for DCI jumping nearly 40%.
Cloud providers ramped up their buying of transponders, ZR optics, and optical line systems. This shows a shift toward more integrated, scalable interconnect fabrics.
Cloud providers’ direct purchases grew about 50%. Hyperscalers made up most of the spending, but neo clouds also increased their investments in optical transport gear.
Both optical transport systems and IPoDWDM ZR/ZR+ optics helped drive the year’s strong performance. There’s clearly broad adoption of advanced DWDM and pluggable tech.
DCI Demand and Cloud Spending
Direct purchases in the DCI segment highlight cloud-scale demand for high-performance optics and line systems. The spike in transponders and ZR optics, paired with optical line systems, really underlines how cloud providers are boosting campus-to-cloud and data center interconnect capabilities for AI workloads and big data replication.
Hyperscalers remained the main growth engine, while neo clouds—these emerging cloud-scale players—stepped up their investments in optical transport. DCI revenue led the way and pointed to a shift toward more modular, disaggregated architectures in optical networks.
Technology Segments Driving Growth
Dell’Oro says the disaggregated WDM market outperformed expectations, growing about 40% across transponder units, optical line systems, and IPoDWDM segments. This shows wider adoption of disaggregated architectures that offer flexibility, better vendor competition, and easier scaling for edge-to-core interconnects.
At the same time, IPoDWDM ZR/ZR+ optics became a key enabler for long-haul and metro deployments, allowing higher spectral efficiency and reach. The combined push from DCI, disaggregated WDM, and IPoDWDM optics kept the whole optical transport value chain moving forward.
Vendor Landscape and Regional Insights
When you look at vendors, Huawei, Ciena, Nokia, ZTE, and Cisco led revenue shares in 2025. For DCI, Ciena, Nokia, and Cisco topped the list by revenue, with North America grabbing a big chunk of that business.
This dynamic reflects strong customer demand in mature networks and big expansion plans among cloud providers across the region. Cloud strategies clearly shape equipment choices—from transponders to OLTs—putting the spotlight on modular platforms and scalable optics that can adapt to shifting transport architectures.
It’s a competitive landscape, and technology choice is tied closely to deployment scale and service flexibility.
Outlook for 2026
Dell’Oro projects another 10% growth in the overall optical transport market for 2026. DCI revenue is expected to climb even faster as cloud builders keep pushing for AI data-center expansion.
The analysis sees cloud providers continuing to scale up DCI, reinforcing the move toward high-capacity, low-latency interconnects that link thousands of servers and storage systems. As hyperscalers build out their networks, there’s ongoing demand for transponders, ZR optics, and disaggregated WDM solutions that can flexibly serve regional data centers and metro edges.
These trends suggest steady investment in optical transport equipment. Technology innovations—especially IPoDWDM ZR/ZR+ optics—are set to play a central role in powering AI and data-heavy workloads at scale.
What the Dell’Oro Optical Transport Quarterly Report Covers
The Dell’Oro Optical Transport Quarterly Report digs deep into data and insights for folks in the industry. It lays out detailed tables and analysis on manufacturers’ revenue, ASPs, and unit shipments.
You’ll find breakdowns across several segments, like:
- DWDM long haul and WDM metro platforms
- Multiservice multiplexers
- DCI and disaggregated WDM deployments
- IPoDWDM ZR/ZR+ optics
- Additional market metrics and regional trends
If you’re a practitioner or exec, this report helps you track supplier performance and technology adoption. It’s also handy for spotting market momentum as optical transport shifts to support AI-powered data centers and cloud-scale networking.
Here is the source article for this story: Optical Transport Market Grew to $16 Billion in 2025, According to Dell’Oro Group