Going Beyond 100G? Not So Fast…
Sterling Perrin, Senior Analyst, Heavy Reading
In October 2006, at Light Reading's Optical Expo conference in Dallas, renowned AT&T Labs Vice President Simon Zelingher (now retired) made a passionate case for the need for 100G transport, predicting: "We will need 100 Gbit/s by the end of the decade."
Despite heavy skepticism, Zelingher's prediction proved amazingly accurate. The first commercial 100G cards were shipped at the end of 2009 -- for Verizon Communications Inc. (NYSE: VZ), not AT&T Inc. (NYSE: T) -- setting the 100G migration in motion.
Fast forward to the present, and 100G has already overtaken 10G, in terms of capacity shipped in long haul networks. As well, 40G transport, which held promise just a couple of years ago, is now on a path of sharp decline, because the capacity and cost-per-bit advantages of 100G cannot be matched.
Today the optical industry buzz is all about "beyond 100G" bit rates. As OFC takes place this week, announcements and discussions focus on the topics of 400G transport versus 1 Terabit transport and how to get to the B100G (Beyond 100G) end game as quickly as possible.
While we welcome progress, Heavy Reading sounds a strong note of caution regarding the widespread commercialization of B100G. While B100G is an appropriate topic for forward-looking optical conferences such as OFC and ECOC, the industry risks getting well ahead of itself in the need for B100G adoption.
In researching our newest Heavy Reading report -- The Rise of 100G & Terabit Transport Networks -- we found that the drivers for B100G are simply not in place, and that 100G is by far the best tool for the job for long haul networks during the next five years.
Here are our main arguments to counter the B100G commercialization hype:
- Historically, the telecom bit rates have increased in 4x increments (i.e., 155 Mbits, 622 Mbit/s, 2.5 Gbit/s, 10 Gbit/s). While some operators did move to 40 Gbit/s, the vast majority did not. For most service providers, the 100G migration marks the first 10x jump in network capacity as they move from legacy 10 Gbit/s networks to 100G. This 10x jump in bit rates is giving service providers an unprecedented boost in capacity.
- Although it is not often discussed in our industry, the fact is that the rate of Internet traffic growth is slowing, governed by the law of large numbers. A quick look at Cisco’s widely-cited Visual Networking Index (VNI) findings reveals this trend. Cisco’s VNI forecasts that global IP traffic will increase at a 23% CAGR from 2012-2017. Cisco's 2011-2016 forecast CAGR was 29%. The 2009-2014 forecast CAGR was 34%, and a few years prior to that, the CAGR was in the 50% range. The Internet is not shrinking, but the growth rates are slowing.
- Economics will ultimately dictate the timing of the next bit rate adoption. This simple truism is often overlooked as our technology-driven industry focuses on, Can it be done? and then on Can it be done economically? However, the real question for B100G must be, Can it be done more economically than 100G? As 100G has entered the volume production phase and as component companies focus their efforts on 100G cost reductions, B100G technologies will not be able to compete with 100G on a cost per bit basis over the next five years, we strongly believe.
Work on B100G must occur now in order to build the technology innovations and sustainable ecosystem for a commercial B100G future. It is the myth of B100G urgency today that we are hoping to dispel in this blog and in our related research.
As the industry takes a realistic view of B100G timing, it does bring up an interesting point that requires thought and discussion. Suppliers have rallied around 400G as the next-generation bit rate because it is the most doable option considering a near-term time horizon. However, if the need for B100G is not so urgent, does 400G really make the most sense? Or should suppliers set their sights on another 10x jump to 1 Terabit transport?
We don't believe this issue has yet been settled.
— Sterling Perrin, Senior Analyst, Heavy Reading