Dell'Oro Group Projects Robust Growth for IPoDWDM Market Driven by AI and ZR+ Optics
In a recent report from the Dell'Oro Group, a trusted authority in telecommunication market research, the IP-over-DWDM (IPoDWDM) segment is expected to witness an impressive growth trajectory, achieving an astounding compounded annual growth rate (CAGR) of 27% over the next five years. This growth is set to elevate the market's worth to over $7 billion by 2030. One of the pivotal factors fueling this robust expansion is the rising deployment of scale-across data center interconnect (DCI) technologies. As organizations seek more efficient ways to manage and relay data, the shift towards ZR+ optical pluggable modules can be observed prominently starting this year.
"Artificial Intelligence is undeniably a key driver for the rising demand for optical transport equipment, particularly for ZR and ZR+ optics within the IPoDWDM space," remarked Jimmy Yu, Vice President at Dell'Oro Group. He elaborated on how building a robust AI infrastructure has instigated a considerable pivot in optical transport demand, prompting adjustments to forecasts across various technology sectors. This is particularly true for IPoDWDM and Disaggregated WDM systems, which play a critical role in linking the front-end of cloud-based data centers both in metro regions and long-distance connections. The future seems geared towards scaling up DCI, mainly through connecting AI data centers, thereby creating larger facilities dedicated to AI training.
The report highlights additional developments in the IPoDWDM and Disaggregated WDM market landscape, noting that demand surged in the first quarter of 2026, particularly driven by a spike in the need for 800 ZR+ optics. The revenue from IPoDWDM was estimated to have grown by more than 30% year-over-year for this quarter alone. Notably, Cisco Acacia emerged as a leader in ZR/ZR+ module shipments, with Marvell following closely behind in market share.
Forecasting suggests that shipments of ZR/ZR+ optical pluggable modules, which are frequently employed within routers and switches, will grow at a robust 29% CAGR over the next five years. Furthermore, the Disaggregated WDM sector—which encompasses IPoDWDM ZR/ZR+ modules, transponder units, and optical line systems—has consistently outshone the integrated systems market, boasting a remarkable growth of 50% year-over-year in the same quarter. Ciena maintained a commanding lead with approximately 40% market share, with Nokia also showing significant presence.
Looking ahead, the Disaggregated WDM market is projected to grow at a CAGR of 17%, nearing $13 billion by 2030. This anticipated growth is driven by both cloud service providers and communication service providers (CSPs).
In conclusion, the dynamic shifts within the realms of AI and data center operations are influencing significant advancements in optical transport technologies. As organizations strategize on enhancing their infrastructure efficiency and capability, the focus on integrating innovative solutions such as ZR+ optics will likely be paramount in shaping the future of IPoDWDM and Disaggregated WDM markets. For further details on this research and to purchase reports, interested parties are encouraged to reach out to Dell'Oro Group directly.
"Artificial Intelligence is undeniably a key driver for the rising demand for optical transport equipment, particularly for ZR and ZR+ optics within the IPoDWDM space," remarked Jimmy Yu, Vice President at Dell'Oro Group. He elaborated on how building a robust AI infrastructure has instigated a considerable pivot in optical transport demand, prompting adjustments to forecasts across various technology sectors. This is particularly true for IPoDWDM and Disaggregated WDM systems, which play a critical role in linking the front-end of cloud-based data centers both in metro regions and long-distance connections. The future seems geared towards scaling up DCI, mainly through connecting AI data centers, thereby creating larger facilities dedicated to AI training.
The report highlights additional developments in the IPoDWDM and Disaggregated WDM market landscape, noting that demand surged in the first quarter of 2026, particularly driven by a spike in the need for 800 ZR+ optics. The revenue from IPoDWDM was estimated to have grown by more than 30% year-over-year for this quarter alone. Notably, Cisco Acacia emerged as a leader in ZR/ZR+ module shipments, with Marvell following closely behind in market share.
Forecasting suggests that shipments of ZR/ZR+ optical pluggable modules, which are frequently employed within routers and switches, will grow at a robust 29% CAGR over the next five years. Furthermore, the Disaggregated WDM sector—which encompasses IPoDWDM ZR/ZR+ modules, transponder units, and optical line systems—has consistently outshone the integrated systems market, boasting a remarkable growth of 50% year-over-year in the same quarter. Ciena maintained a commanding lead with approximately 40% market share, with Nokia also showing significant presence.
Looking ahead, the Disaggregated WDM market is projected to grow at a CAGR of 17%, nearing $13 billion by 2030. This anticipated growth is driven by both cloud service providers and communication service providers (CSPs).
In conclusion, the dynamic shifts within the realms of AI and data center operations are influencing significant advancements in optical transport technologies. As organizations strategize on enhancing their infrastructure efficiency and capability, the focus on integrating innovative solutions such as ZR+ optics will likely be paramount in shaping the future of IPoDWDM and Disaggregated WDM markets. For further details on this research and to purchase reports, interested parties are encouraged to reach out to Dell'Oro Group directly.
Topics Business Technology）
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