Data Center Interconnect with IPoDWDM and WDM Systems Grew 45 Percent
REDWOOD CITY, Calif. – August 20, 2026 – According to a recently published report from Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, the Optical Transport equipment market grew 15 percent year-over-year in 2Q 2026, driven by the strong demand for data center interconnect (DCI). DCI revenue from IPoDWDM ZR/ZR+ and WDM Systems grew 45 percent year-over-year in the period.
“This was another quarter of solid growth for the Optical Transport market,” said Jimmy Yu, Vice President at Dell’Oro Group. “There is strong demand for optical network equipment between neighboring data centers and across long-distance backbones. This is especially true in North America, where many of the largest AI data centers reside. We estimate that more than 40 percent of Optical Transport equipment revenue was driven from this region in the quarter,” added Yu.
Additional highlights from the 2Q 2026 Optical Transport Quarterly Report:
- Cloud provider purchases of WDM Systems and IPoDWDM ZR/ZR+ optics each grew at double-digit rates year-over-year in the quarter. In total, cloud providers accounted for 34 percent of the Optical Transport market revenue.
- Disaggregated WDM optical line systems (OLSs) continued to be in high demand, growing 80 percent year-over-year. The leading vendors in this technology segment were Ciena and Nokia.
- Optical Transport revenue grew in every major region except Asia Pacific due to a steep decline in China as the country strategically shifts its spending from telecom infrastructure to compute infrastructure.
- For the trailing four-quarter period, which includes the 3Q 2025 through 2Q 2026 quarters, the top four vendors were Huawei, Ciena, Nokia, and Cisco (Acacia).
The Dell’Oro Group Optical Transport Quarterly Report offers complete, in-depth coverage of the market with tables covering manufacturers’ revenue, average selling prices, and unit shipments (by speed up to 1.6 Tbps). The report tracks DWDM long haul, WDM metro, multiservice multiplexers (SONET/SDH), data center interconnect (metro and long haul), disaggregated WDM systems, and IPoDWDM ZR/ZR+ Optics. To purchase this report, please contact us at dgsales@delloro.com.
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit https://www.delloro.com.
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