Cloud Providers Fueling Significant Growth in Optical Transport Market, Reaching $19 Billion by 2029
An insightful report from Dell’Oro Group forecasts robust expansion for the optical transport market, largely driven by the insatiable demands of cloud providers.
New York, NY – July 22, 2025 – The optical transport market is poised for substantial growth, projected to reach an impressive $19 billion by the year 2029. This significant expansion is primarily attributed to the escalating infrastructure investments by cloud providers, according to a comprehensive new report released today by Dell’Oro Group, a leading market research firm.
The increasing reliance on cloud services for data storage, processing, and application delivery has created an unprecedented demand for high-capacity, high-speed network connectivity. Cloud hyperscalers and other large cloud service providers are continuously upgrading and expanding their data center interconnects (DCIs) and metro networks to support the burgeoning volume of data traffic. This relentless demand for bandwidth is a key catalyst for the sustained growth of the optical transport sector.
Dell’Oro Group’s analysis highlights that these cloud providers are not only a major source of revenue for optical transport equipment vendors but also a driving force behind technological innovation. Their need for cost-effective, power-efficient, and increasingly programmable solutions is pushing the boundaries of what optical transport technology can deliver. This includes advancements in coherent optics, wavelength division multiplexing (WDM) technologies, and software-defined networking (SDN) for optical networks.
Beyond the cloud, the report also acknowledges other contributing factors to the market’s upward trajectory. The ongoing rollout of 5G networks, the proliferation of Internet of Things (IoT) devices, and the continued growth of enterprise digital transformation initiatives are all playing a role in increasing the overall demand for optical transport infrastructure. However, the dominance of cloud provider spending is clearly the most impactful trend shaping the market’s future.
This projected growth signifies a critical period for optical transport manufacturers and network operators. Companies that can effectively cater to the evolving needs of cloud providers, offering scalable and advanced solutions, are well-positioned to capitalize on this expanding market opportunity. The sustained investment in optical transport infrastructure underscores its fundamental importance in enabling the digital economy and powering the services that have become integral to modern life.
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