Cloud and colocation operators' optical transport spending to grow 27% on strong scale-across demand
If you want to know what will drive new growth in optical transport, look no further than the cloud and colocation segments.
As spending by cloud and colocation operators continues to ramp, Cignal AI notes in its Scale-Across: Sizing the Optical Layer for Distributed AI report that worldwide optical transport hardware is now expected to grow at a 14% compound annual growth rate (CAGR) from 2025 to 2030, with spending by cloud and colocation operators growing at 27%.
The research firm noted that the new report features Cignal AI’s first bottom-up model of the coherent pluggables and line systems used for scale-across networking. A big portion of the forecast increase comes from line systems supporting scale-across applications: terminals, in-line amplifiers, and the software managing the link.
“Coherent transceivers get all the attention these days, but scale-across is a crucial line-system story that has not been well quantified,” said Kyle Hollasch, Lead Analyst for Transport Hardware at Cignal AI. “Once we modeled the photonic layer underneath the pluggables, it became clear that our earlier projections understated the line-system opportunity. We now see that line systems will overtake pluggables in scale-across spending in 2028.”
Scale-across optical jumps
Led by line systems, Cignal AI forecasts that scale-across optical revenue will surpass $9 billion in 2030 and more than $24 billion cumulatively from 2026 through 2030. The research firm noted that line systems account for the larger share of the cumulative total, ahead of coherent pluggables.
Line systems are set to grow from 29% of scale-across revenue in 2026 to 57% in 2030. Multi-rail amplifiers arrive in 2027, and line-system prices hold or rise while merchant coherent pluggable prices continue to fall.
One of the main cost drivers is Raman amplification since scale-across networks use this technology far more heavily than service provider networks. Also, Raman’s indium phosphide pump lasers are one of the hardest parts of the optical supply chain to procure, with lead times of 18 months or more.
Scale-across reshapes the coherent pluggable market as it rapidly transitions from 800ZR to 1600ZR, which will carry 70% of scale-across bandwidth by 2030.
What is multi-rail optics?
Multi-rail optics is compelling because it enables scale. While traditional optical networks scale capacity wavelength-by-wavelength or fiber-by-fiber, multi-rail treats a filled fiber pair (a "rail") as the fundamental unit of scale, allowing hundreds of fiber pairs to run in parallel.
Ciena, Cisco, and Nokia multi-rail lead
Ciena, Cisco, and Nokia, which all invested in multi-rail line systems, are the likely beneficiaries of the spending surge.
Each vendor has publicly revealed its platforms.
With its RLS Hyper-Rail, Ciena's primary multi-rail platform builds on its 6500 Reconfigurable Line System (RLS). Offering high density, the platform moves from 1 rail per module to 4 rails per module, packing up to 128 rails in a single rack (up to 32 times denser than older systems).
On the eve of the OFC 2026 trade show in March, Cisco introduced its Open Transport 3000 Series. The vendor claims its platform can achieve 75% power reduction per rail and 80% reduction in rack space per rail.
Nokia, meanwhile, is also focusing on enabling power and space efficiency. Its 1830 GX multi-rail amplifier, which supports four fiber rails in 1RU, can enable 160 rails in a standard 40RU rack.
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About the Author
Sean BuckleySean Buckley
Sean is the Editor-in-Chief of Lightwave. He establishes and executes Lightwave's editorial strategy across its website, email newsletters, events, and other information products. Before coming to Lightwave in July 2023, he served as editor of Broadband Communities. Earlier, he served as senior editor of FierceTelecom and the editor of the former Telecommunications Magazine. He got his start in the optical industry in 1998 when he became the editor of enterprise and optical networks at Information Gatekeepers. He has a BA in English from the University of Massachusetts, Boston, and lives in Dracut, Mass, with his wife, two sons, and his cat, Dove.
