Light Reading

Core 100G Fuels Packet-Optical Switching Growth

Sterling Perrin
4/10/2014
50%
50%

The market for packet-optical switch infrastructure is growing rapidly, propelled by the continued rapid uptake of 100G in long-haul networks.

This is the main finding in the latest edition of Heavy Reading 's Next-Gen Core Packet-Optical Market Tracker. The overall, global, long-haul (or core) transport network experienced solid growth, at 7.6% in 2013, also driven by 100G network build-outs. That overall core transport network market includes the packet-optical switching segment, which Heavy Reading defines as products that integrate DWDM transport and OTN switching and, ultimately, packet switching as well.

As operators deploy 100G, they are increasingly looking to integrate their 100G transport networks with switched OTN for a number of reasons, including the ability to groom lower-speed 10G traffic efficiently into the larger 100G pipes. We have written about the drivers for switched OTN in the core extensively in the past, and the results of this migration are now being seen concretely in the market numbers. Global core packet-optical switching revenue jumped 65% in 2013 to reach $1.3 billion (a total that includes both the switching and the transport portions of these products).

In contrast, revenues generated from legacy Sonet/SDH-based optical crossconnect products continues to plummet, falling by 22% in 2013 to just $200 million.

At this point, the numbers show us some clear trends:

  • 100G is driving core network spending growth and operators' core network architectural decision processes.
  • OTN is the clear switching choice for operators' core networks today. We believe this will remain the case over the next five years as well.
  • Operators want to combine their switched OTN with their transport platforms together, and we believe this will also remain the case over the next five years.

In addition to DWDM transport and OTN switching, Heavy Reading’s definition of packet-optical switching also includes a component for packet switching products, such as Ethernet, MPLS-TP, or MPLS switching. The evolution of packet switching in core transport is less clear at this time, and it's something Heavy Reading will be keeping a close eye on moving forward. Early on, it seemed as if some form of packet switching would be a major component of core transport. As one example, Verizon Communications Inc. (NYSE: VZ) was originally a big proponent of integrated packet switching and core transport, but ultimately the carrier made separate decisions for its MPLS core, with Juniper Networks Inc. (NYSE: JNPR), and 100G/OTN with Ciena Corp. (NYSE: CIEN)

At OFC in March, we heard rumblings from some camps that the switched OTN core would be short-lived and that MPLS switching would soon step in as the replacement. If the definition of "soon" is the next three years, we don't see how this transition will happen.

We believe the momentum of switched OTN is too great. However, if we are looking at the five-year horizon, and beyond, it's certainly a possibility (but not a given). The big routing suppliers are making their case to operators now, and we'll be polling the service provider market to see if and when these operators start listening.

— Sterling Perrin, Senior Analyst, Heavy Reading

(5)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
melao2
50%
50%
melao2,
User Rank: Light Sabre
4/11/2014 | 10:39:36 AM
Re: Sonet/SDH
Your questions raises a good topic for discussion. How resilient SDH/Sonet as a technology it is.

I have graduated in 2000 from the university and since then SDH was a dying technology, and actually SDH is still around strong in many places.

 

I think finally we reached the point the SDH deployment will be irrelevant. 

Some carriers that I work with do not buy SDH anymore, only for some small port/board expansions in order to keep some past investments in the network. 

For new networks, either MPLS-TP or IP MPLS are chosen, be it the backhaul, aggregation layer or metro networks.

I supposesoon the competition in the Metro will be between OTN to the edge and corrent MPLS-TP and IP MPLS technologies....
sterlingperrin
50%
50%
sterlingperrin,
User Rank: Lightning
4/10/2014 | 5:01:29 PM
Re: Sonet/SDH
Dan,

In the LH network, I'd say Sonet/SDH's goose is already cooked. I'd call $200M in global revenue not worth measuring, but I measured it anyway.

In the metro, Sonet/SDH hangs around alot longer as there's still alot of sub-wavelength level traffic in metro networks.

Sterling
DOShea
50%
50%
DOShea,
User Rank: Blogger
4/10/2014 | 4:35:29 PM
Sonet/SDH
How long do you think it will be before the Sonet/SDH market fades away? Or at least gets so tiny it's not worth measuring?
sterlingperrin
50%
50%
sterlingperrin,
User Rank: Lightning
4/10/2014 | 11:15:40 AM
Re: Reminder of timescales
This is quite true. My rule of thumb is to come up with the most reasonable and well-researched estimate of a time-frame for technology adoption ... and then multiply that duration x2. 

Sterling
Ray@LR
50%
50%
Ray@LR,
User Rank: Blogger
4/10/2014 | 11:11:24 AM
Reminder of timescales
This is a very real reminder, as everyone talks about the potential of transport SDN, about how long it takes for concepts to become mature enough for deployment and then for the market to reach a point of momentum. Packet-Optical and 100G were topics being discussed in earnest at least six years ago, if I recall correctly...
More Blogs from Heavy Lifting Analyst Notes
Metro data center interconnect (DCI) and transport SDN were the key themes of Optical Innovation Forum 2015.
Huawei-hosted conference considers ways to achieve ultra-broadband connectivity for Asia/Pacific by 2020.
The growth of broadband is exposing the limitations of current OSS/BSS infrastructure and driving a shift to a new paradigm -- the business enablement system (BES).
Big data and analytics has been a hot topic for some time, but the value proposition is only now emerging from the hype cycle fully formed, with a mandate for commercialization.
By 2017, metro traffic is expected to increase dramatically. 16QAM modulation that provides 200G over 100G lines will be a significant market presence with potential substantial adoption.
Flash Poll
From The Founder
Anshul Sadana answers questions from Steve Saunders, Light Reading's founder and CEO, about Arista's CloudVision, a global cloud network controller for workload orchestration and workflow automation delivering a turnkey solution for cloud networking.
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Custom TV
End-User or Enterprise Benefits to the New IP

7|30|15   |   04:27   |   (0) comments


Andrew Coward discusses what the New IP means to end users or enterprise customers. He explains compelling reasons, including how every customer can get their own network, from the transformation to the New IP.
LRTV Custom TV
Network Visibility & the New IP

7|30|15   |   02:23   |   (0) comments


Mukund Srigopal provides an explanation of what network visibility is and how it is essential as service providers transition to the New IP. In addition, the importance of the network packet broker is discussed.
Between the CEOs
Video Exclusive With Basil Alwan, Alcatel-Lucent

7|24|15   |   26:44   |   (5) comments


Basil Alwan, President of IP Routing & Transport at Alcatel-Lucent, discusses virtualization, cultural challenges, the capex crunch and more with Light Reading founder and CEO Steve Saunders.
LRTV Custom TV
VDF: Enable the Financial With Mobile Money

7|20|15   |   06:53   |   (0) comments


Ian Ravenscroft discusses how operators can expand to occupy the entire digital services value chain through service innovation.
LRTV Custom TV
Telefónica on OSS Transformation

7|20|15   |   06:01   |   (0) comments


Jose Gonzales discusses the details of Telefónica's operation transformation program.
LRTV Custom TV
Judi Achmadi on Huawei's Cloud Storage Solution

7|20|15   |   03:33   |   (0) comments


Judi discusses the key business goals of TelekomSigma's public cloud service and how Huawei's solution helps them address challenges.
LRTV Custom TV
KPN Enlightening Digital Business & IT Transformation

7|20|15   |   06:19   |   (0) comments


Rob de Beer discusses the changes that operators need to make with service innovation now coming from the Internet world.
LRTV Custom TV
Stratus Telco-Grade Cloud Solutions & NFV

7|20|15   |   07:34   |   (0) comments


Ali Kafel from Stratus Technologies addresses high-availability concerns within the telco industry with a solution that enables telcos to provide high-availability and stateful fault-tolerance using a software-based approach.
LRTV Documentaries
The Six Million Dollar Business Man

7|20|15   |   01:52   |   (0) comments


Steve Saunders, publisher. A man barely alive after an acquisition malfunction imploded the company he founded. Gentlemen, we can rebuild Light Reading. Better, faster, stronger.
Between the CEOs
CEO Chat With Anukool Lakhina, Guavus

7|20|15   |   38:51   |   (1) comment


Guavus CEO Anukool Lakhina talks to Light Reading founder and CEO Steve Saunders about the role of operational analytics in the communications services and networking sectors, particularly in relation to IoT.
LRTV Custom TV
IBM's Flash Storage With Intel QuickAssist

7|20|15   |   03:18   |   (0) comments


Intel's Bev Crair and IBM's Eric Herzog discuss how IBM's V9000 Flash Storage System has helped customers around the world. Featuring real-time compression powered by Intel QuickAssist Technology, the V9000 is a next-gen flash storage solution.
LRTV Huawei Video Resource Center
Thailand's AIS: Transforming to an FMC Operator

7|17|15   |   4:53   |   (0) comments


Saran Phaloprakarn, Senior VP of Fixed Broadband Business Management of Thailand's AIS, was a keynote speaker at the first Asia-Pacific Ultra Broadband Summit in Bangkok. In this video, he talks to Heavy Reading about transforming into an FMC (FBB+MBB+Content) operator.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
December 1, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
Network operators start seeing savings from NFV in the first year, according to a study by Affirmed Networks and ACG.
Hot Topics
AT&T U-verse TV Hits the Skids
Alan Breznick, Cable/Video Practice Leader, 7/24/2015
Robbins Succeeds Chambers as Cisco Changes CEOs
Mitch Wagner, West Coast Bureau Chief, Light Reading, 7/27/2015
RJio to Launch Its Own 4G Devices Brand
Gagandeep Kaur, Contributing Editor, 7/27/2015
Qualcomm Wants FCC to Stay Out of LTE-U Fray
Sarah Thomas, Editorial Operations Director, 7/27/2015
Like Us on Facebook
Twitter Feed
September 22, 2015
Media Begins With “Me”
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Basil Alwan, President of IP Routing & Transport at Alcatel-Lucent, discusses virtualization, cultural challenges, the capex crunch and more with Light Reading founder and CEO Steve Saunders.
Guavus CEO Anukool Lakhina talks to Light Reading founder and CEO Steve Saunders about the role of operational analytics in the communications services and networking sectors, particularly in relation to IoT.
Cats with Phones
Distract-a-Cat Click Here
The vibrate function makes for a useful cat distraction.