The Market Signal: PON Is Entering a New Data Center Category

In an August 2026 forecast, Dell’Oro Group projects that data center PON equipment revenue will grow at a 52% compound annual growth rate from 2026 through 2030. The forecast also expects 2026 revenue to increase 844% year over year and cumulative spending to exceed US$3 billion between 2026 and 2030. Hyperscalers, neocloud providers and colocation operators are expected to use PON primarily for out-of-band management and infrastructure-management networks.

These figures are forecasts rather than recorded sales, but they identify an important shift: the PON ecosystem is expanding from residential access into data center and enterprise premises networks. A large facility may contain thousands of management ports, intelligent power devices, cooling controllers, sensors and security endpoints. Individually, most do not need production-fabric bandwidth. Collectively, they create a substantial parallel cabling and switching system that must be powered, monitored, patched and maintained.

Source: Dell’Oro Group—PON in Data Centers Expected to Grow at 52 Percent CAGR.

Why OOBM and DCIM Are Good Initial Use Cases

Out-of-band management

An out-of-band network is physically separated from production workload traffic so operators retain IP access to management interfaces on switches, routers, servers and other infrastructure when the production network has a fault or is being reconfigured. It may also connect IP-aware HVAC systems and power distribution units. Cisco describes this separation and endpoint scope in its NextGen Out-of-Band Data Center Management Network design reference.

OOBM traffic usually has modest throughput requirements compared with server east-west traffic. Reach, segmentation, predictable availability, port density and consistent endpoint management matter more. These characteristics make OOBM a credible target for a point-to-multipoint optical architecture.

Data center infrastructure management

DCIM platforms monitor and manage IT assets together with the physical systems that support them, including power and cooling. The communications layer may connect:

• intelligent rack PDUs, power meters, UPS systems and battery monitors;
• cooling units, building-management gateways and environmental sensors;
• door-access, surveillance, leak, smoke, temperature and humidity devices;
• asset-tracking systems and rack-monitoring equipment.

These endpoints are numerous and geographically distributed, while their aggregate traffic is generally far below compute and storage traffic. A centralized OLT and passive optical distribution network can therefore be attractive when the capacity model, optical budget and availability design are appropriate.

What Passive Optical LAN Means Inside a Data Center

Passive Optical LAN applies PON’s point-to-multipoint structure to a building, campus or data center. A typical management path is:

Management core or firewall → OLT → feeder fiber → PLC splitter → distribution/drop fiber → ONT/ONU → short Ethernet connection → managed endpoint

“Passive” applies to the ODN between the OLT and ONT. The OLT and ONTs are active, powered devices. That distinction matters when calculating energy consumption and planning backup power.

XGS-PON is a strong candidate for new deployments because it provides a nominal 10 Gbit/s in both downstream and upstream directions over point-to-multipoint optical infrastructure. The transmission system is defined by ITU-T Recommendation G.9807.1. GPON may still be sufficient for low-bandwidth management endpoints, while 25G- and 50G-class PON technologies can broaden future options. The correct choice depends on endpoint count, traffic profiles, vendor ecosystem, lifecycle and migration requirements—not headline speed alone.

POL vs. Traditional Switched Ethernet

Traditional data center management networks commonly distribute dedicated Ethernet access switches by rack, row or room. POL centralizes more of that access function in the OLT and replaces many intermediate data paths with passive splitters.

Nokia’s enterprise Optical LAN material describes a simpler physical layer with fewer racks, switches and patch panels, plus the removal of a powered telecom closet or switch every 100 meters in suitable designs. These are vendor claims and should be tested against the project topology, endpoint count and redundancy model. See Nokia Optical LAN.

Why the Passive Layer Can Outlive the Electronics

An OLT or ONT may be replaced as speed, software or security requirements change. A correctly specified OS2 fiber distribution system can potentially remain in place across several electronics generations when:

• the fiber type supports the planned wavelengths and transmission systems;
• connector reflectance and insertion loss stay within the optical budget;
• splitter loss leaves sufficient migration and engineering margin;
• the topology supports the next architecture rather than locking the operator into an unsuitable split;
• fire, pathway and mechanical requirements remain compliant;
• documentation, labeling and test records are maintained.

The ODN should therefore be treated as long-life data center infrastructure rather than a collection of commodity FTTH accessories.

The Passive-Layer BOM for Data Center PON

Once the approved electronics platform defines OLT and ONT compatibility, the logical PON design must be converted into a controlled ODN bill of materials.

For tight racks and pathways, bend-insensitive single-mode fiber can improve installation tolerance. ITU-T G.657.A2 options are available for improved bend performance. Cable jacket and fire classification must also match the jurisdiction and pathway: plenum or riser ratings may apply in North America, while other projects may specify LSZH constructions or a CPR Euroclass. “Indoor cable” alone is not a complete procurement description.

Split Ratio Is a Capacity Decision, Not Just a Cost Decision

FTTH designs often pursue higher split ratios to maximize homes passed per OLT port. Data center management networks should select the split from engineering conditions instead of copying that model.

A higher split ratio increases splitter insertion loss, shares OLT-port capacity among more ONTs, enlarges the number of endpoints affected by a feeder, splitter or port fault, and reduces optical-budget margin for connectors, splices and future changes. For OOBM or DCIM, 1×8 or 1×16 may be more appropriate than 1×32 or 1×64 when fault containment, capacity or growth margin matters more than minimizing OLT port count.

The design team should model four factors together:

1. Peak and concurrent traffic: firmware distribution, telemetry bursts, video, backups and emergency operations can exceed normal averages.
2. Optical loss: include fiber attenuation, splitter loss, connector pairs, splices, protection components and engineering margin.
3. Failure impact: count the endpoints—and their criticality—behind each OLT port and splitter.
4. Growth: reserve fibers, splitter outputs, OLT capacity and future ONT locations.

Five Design Risks That Must Be Solved Before Deployment

Removing intermediate switches can reduce active equipment in the distribution path, but it does not automatically create resilience. The protection model must meet the same operational objective as a well-engineered conventional OOB network.

Where PON Fits—and Where It Does Not

The most credible strategy is network specialization: switched high-speed fabrics for compute and storage, with PON considered for suitable management and facility networks.

A Practical Procurement Checklist

Before issuing an RFQ for the passive plant, define:

• PON technology and approved OLT/ONT models;
• number, type and location of endpoints;
• normal, peak and emergency traffic assumptions;
• split ratio, splitter placement and feeder/distribution topology;
• A/B path and protection requirements;
• an optical power-budget worksheet with engineering margin;
• fiber type and fiber count for every segment;
• cable construction and regional flame rating;
• connector interface and polish, including APC/UPC control;
• splice, patch and preconnectorized boundaries;
• rack, tray, enclosure and pathway constraints;
• labeling, port numbering and asset-data format;
• insertion-loss and OTDR acceptance criteria;
• cleaning, inspection and handover requirements;
• spare fibers, ports, splitters and maintenance stock.

Data center designs should also be reviewed against the applicable edition and project requirements of standards such as ANSI/TIA-942, which covers data center physical infrastructure including telecommunications, power, cooling, fire safety, security and monitoring.

How to Specify the Passive Optical Distribution Package

A project-specific ODN package can combine:

• OS2 feeder, distribution and bend-insensitive drop cables;
• indoor LSZH, riser, plenum, indoor/outdoor or armored constructions as required;
• rack-mount ODFs and fiber patch panels;
• PLC splitter modules and splitter cassettes;
• SC/APC patch cords, pigtails, adapters and preterminated assemblies;
• splice trays, fiber boxes, closures and distribution terminals;
• pathway accessories, labels and installation consumables;
• factory test records and project-specific ODN loss documentation.

ZION can translate an operator-approved logical topology into a coordinated passive-layer BOM with controlled interfaces, fire ratings, loss budgets, labels and spares. Finalization depends on the approved OLT/ONT combination, endpoint plan, pathway environment, redundancy model and acceptance criteria.

Conclusion

PON is moving beyond FTTH because data centers contain more networks than the high-speed fabric carrying production workloads. OOBM, DCIM and operational IoT create a large parallel connectivity layer where long reach, high port density, reduced cable volume and fewer intermediate active devices may matter more than dedicated bandwidth to every endpoint.

A dependable data center POL deployment requires more than an OLT, a splitter and several ONTs. It requires a capacity model, protected topology, complete optical budget, appropriate indoor cable ratings, controlled connector interfaces, reliable ONT power, validated interoperability and a documented ODN BOM. Passive-layer engineering is the bridge between PON technology and dependable data center operations.

Frequently Asked Questions

Sources

1. Dell’Oro Group—PON in Data Centers Expected to Grow at 52 Percent CAGR from 2026–2030
2. Dell’Oro Group—PON in the Data Center & Premise Advanced Research Report
3. Cisco—NextGen Out-of-Band Data Center Management Network
4. Cisco—Out-of-Band Best Practices
5. Schneider Electric—EcoStruxure IT DCIM
6. ITU-T—Recommendation G.9807.1, XGS-PON
7. Nokia—Optical LAN Explained
8. Nokia—Optical LAN
9. Corning—ClearCurve Single-Mode Optical Fibers
10. TIA—ANSI/TIA-942 Standard