Cisco Systems Inc. (Nasdaq: CSCO) is happy about a report saying IP over DWDM (IPoDWDM) is in a majority of carriers' plans, but analysts still aren't convinced the technology is all that widespread.

For a lot of those carriers, IPoDWDM is only being used in a few spots where it can cut costs, says Michael Howard, principal analyst of Infonetics Research Inc.

"There are a couple of big Asian operators that are using it today, but overall, it's pretty minimal," Howard says.

IPoDWDM involves putting a tunable DWDM interface on a router. The more normal practice is to have the router feed a transponder system, which in turn assigns the traffic to a DWDM wavelength. So, IPoDWDM can eliminate that transponder box, making the network a little simpler and, theoretically, a little cheaper to run. (See Cisco's CRS-1 Goes Optical.)

Cisco started pushing the technology about five years ago, and Alcatel-Lucent (NYSE: ALU) and Juniper Networks Inc. (NYSE: JNPR) now support it as well, albeit with less gusto. But when it comes to converging packet and optical layers, more attention has gone to packet-optical transport systems (P-OTS) and similar devices, where routing functions get added to a DWDM system, the philosophical opposite of IPoDWDM.

So, Cisco was thrilled by a recent Infonetics survey where half the operators polled said they were using IPoDWDM already or would be using it by the end of the year. Seventy percent said they'd be using it by 2012.

Cisco popped the champagne with a blog entry -- citing slightly different Infonetics numbers (85 percent adoption of IPoDWDM beyond 2012) -- about IPoDWDM finally "crossing the chasm," the overused industry phrase for a technology going mainstream.

Howard admits to being impressed at the breadth of carriers considering IPoDWDM. Quite a few "were pretty sure there would be a good reason to use IPoDWDM, in a cost-saving basis, by 2013," he says. But he adds that less than 10,000 IPoDWDM interfaces are in place. (Nearly all of them are Cisco's, by the way.)

But Cisco thinks it's unfair to call IPoDWDM a one-node fling, and the company denies that the technology is being used only opportunistically. "We have many service providers that use this broadly as their main backbone transport strategy and are now moving it into the metro," writes Mike Capuano, Cisco's director of service provider marketing.

Cisco isn't disclosing who's using how much IPoDWDM, but its named customers include Comcast Corp. (Nasdaq: CMCSA, CMCSK), Deutsche Telekom AG (NYSE: DT), Free , KazakhTelecom , Netia Holdings SA , Sprint Corp. (NYSE: S), T-Com , and Telia Company .

Still, P-OTS and other forms of packet/optical convergence seem to be more on carriers' minds. "The more I talk to vendors and operators about that, there just seems to be less and less need" for IPoDWDM, and more interest in using P-OTS to bypass some core router ports, says Heavy Reading analyst Sterling Perrin. (See Vendors Target the Packet-Optical Core.)

"It's almost the most universal thing I come across. They want to offload the burden on those routers for transit traffic. Which is the opposite of IPoDWDM," Perrin says. "I was talking with Comcast Corp. (Nasdaq: CMCSA, CMCSK) last week, and they're interested in that." (Comcast was an early proponent of IPoDWDM.)

Another problem, especially for large carriers, is the operational question that IPoDWDM creates, because it blurs the definition of which part of the operation owns the wavelength. If it's the router side, then those people need a way to find out if the wavelength is even available on the optical transport side.

Control-plane innovations such as GMPLS are supposed to help with that issue, but in some cases, the answer comes down to a router person going over to the optical group and asking for a wavelength, Howard says. That's not particularly scalable.

Cisco notes, though, that this is a well-known problem that's fading away. "The siloed domains of 2005 have already merged in many service providers" and will exist in just 5 percent of operators by 2012, Capuano writes, quoting more Infonetics numbers.

What's interesting is that Cisco could hedge its bets by adding P-OTS. Its recent acquisition of CoreOptics appears to be motivated by the coming 100-Gbit/s optical generation, but Eve Griliches of ACG Research thinks it also points to a P-OTS plan. (See Cisco Renews Optical Focus With CoreOptics.)

Analyst Ed Zabitsky of ACI Research (similar name, completely different company) agreed in a note published early this week: "Their acquisition of Coreoptics shows their understanding that intelligent optics will subsume some data transport dollars from routers. That is the Cisco Way. Let customers bet on Cisco, not on a specific technology."

Nokia Networks is similarly playing both sides. It can support IPoDWDM, through a partnership with Juniper, but it's also developed an OTN switch. (See NSN Adds Packet-Optical Punch.)

— Craig Matsumoto, West Coast Editor, Light Reading