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IPoDWDM Systems Market Forecast

The recent report from Dell'Oro Group has made headlines, forecasting that the IP-over-DWDM (IPoDWDM) systems market will surge to $4.4 billion by 2030. This projection reflects an impressive average annual growth rate of 16%, driven by the increasing demand for ZR+ optical pluggable modules.

The Rise of ZR+ Optics

ZR+ optics have spiked in interest, experiencing a tenfold increase over the past year. Initially, coherent ZR pluggable modules were mainly designed for interconnecting data centers located within 80 kilometers of each other. However, with the rapid advancement of AI and the resulting need for extensive data processing capabilities, the focus has shifted towards deploying these modules over longer distances with enhanced fiber capacity to support demanding workloads.

Jimmy Yu, Vice President of Dell'Oro Group, explains that this urgent demand is primarily driven by the expansion of hyperscale data centers that are beginning to operate as hubs for AI training and processing. This shift is causing a significant pivot in the market’s requirements, leading to a surge in the procurement of IPoDWDM systems equipped with ZR+ optics.

Key Market Dynamics

The report highlights several notable trends:
1. Strong Recovery: After facing a dip, the demand for IPoDWDM systems began to rebound in the second quarter of 2024, with an expected growth nearing 40% in 2025.
2. ZR Optics Dominance: Currently, ZR optics account for a sizable portion of the optics utilized in IPoDWDM frameworks.
3. Increased Shipments: The introduction of scale-across data center interconnect (DCI) has projected a substantial rise in the shipment of 800 ZR+ modules in 2026.
4. Diverse Revenue Streams: By 2030, it is anticipated that over a quarter of the revenue from IPoDWDM systems will originate from non-DCI applications, as communication service providers adopt these technologies into broader network initiatives.

Market Leaders

In the third quarter of 2025, the top suppliers for ZR/ZR+ optical pluggable modules were compellingly listed as Marvell, Cisco, and Ciena. They led the market in terms of shipment volumes, indicating their significant presence in this ascending sector.

Conclusion

As the IPoDWDM systems market continues to evolve, the role of innovative solutions such as ZR+ optics will undoubtedly define the telecommunications landscape. This growth offers exciting opportunities for companies willing to adapt to these shifting demands in technology, ultimately benefiting global communication infrastructures.

About Dell'Oro Group

Dell'Oro Group stands as a premier research firm, providing essential insights into the telecommunications, security, enterprise networks, and data center sectors. With extensive quantitative and qualitative data, the firm aids businesses in making informed and strategic decisions. For further details, you can reach Dell'Oro Group at +1.650.622.9400 or visit their website at www.delloro.com.