& cplSiteName &

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 Readingís 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
It's clear that virtualization will play a huge role in the development of IoT – so it's time to become acquainted with Virtuapedia.
A dedicated cloud-hosted core is important to making the mobile network commercially attractive to Internet of Things (IoT) service providers.
Huawei has announced a new approach to measuring the quality of a user's gaming experience.
Heavy Reading has identified four use cases that are key to cable virtualization and that prove cable is ready to turn concepts into action.
The next iteration of cloud deployment will deliver considerable benefit, but also impose new requirements and create new challenges for even existing virtualized products.
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
No Stopping Cable's Ethernet Gains

12|9|16   |     |   (0) comments


Vertical Systems' Erin Dunne explains why US cable operators, which now command a record-high 26% of the Ethernet market, will keep boosting their share.
LRTV Interviews
Fixing IoT Security Is an Ecosystem Challenge

12|9|16   |   05:34   |   (1) comment


Level 3 Communications' Chief Security Officer Dale Drew says service providers, manufacturers and even consumers must combine to halt massive DDoS attacks using IoT devices in botnets. The solution he has in mind includes reputation-based routing by the service provider but also more secure endpoint devices and greater consumer awareness.
LRTV Interviews
Cox Clears $2B in Business Revenue

12|8|16   |     |   (0) comments


Cox's Jeff Breaux discusses how the third-largest US MSO will reach the $2 billion revenue mark this year and plans to hit $3 billion by 2021
LRTV Interviews
Can Cable Climb Upmarket?

12|7|16   |     |   (0) comments


Carol Wilson and Alan Breznick assess cable's prospects for winning more enterprises in a landscape rocked by corporate M&A activity.
Women in Comms Introduction Videos
TalkTalk Exec: Find Your North Star at Work

12|7|16   |   3:38   |   (1) comment


Women need to find their purpose, a professional North Star, and create a personal board for themselves, according to Alex Tempest, director of partners at TalkTalk Business.
LRTV Interviews
Verizon: Beware Unknown Unknowns

12|7|16   |   04:58   |   (0) comments


Chris Novak, director of the Verizon Enterprise Solutions Risk Team, explains that enterprises who don't conduct a thorough audit of their assets often leave some things unprotected because they don't know they exist. Many times these unprotected assets are part of corporate M&A activity but left unshielded they can become a hacker's playground, he tells Light ...
LRTV Interviews
ETSI's CTO Talks NFV, 5G & NGP

12|5|16   |   09:45   |   (0) comments


Adrian Scrase, CTO at standards body ETSI, talks about the various initiatives and specifications developments related to NFV, 5G and NGP (next-generation protocols) that will underpin next-gen networks.
Women in Comms Introduction Videos
Korn Ferry Consultant: How to Find, Cultivate & Be the Best Talent

11|30|16   |   4:10   |   (2) comments


Erin Callaghan, a managing consultant for Korn Ferry Futurestep, shares strategies for companies to improve how they recruit and for women to ensure they don't get lost in the pipeline.
LRTV Custom TV
We Can Make the World More Sustainable

11|29|16   |     |   (0) comments


GeSI is a global e-Sustainability Initiative organization bringing together 40 big multinational companies around the world. According to GeSI's report, information and communication technology can make the world more sustainable. Luis Neves, chairman of GeSI, shared with us his opinion at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
Finding a New Way to Engage Customers & Drive Revenue

11|29|16   |     |   (0) comments


Mobile revenues are declining. Digicel, a player in the Caribbean telecommunications/entertainment space, has found a new way to engage customers and drive revenue. John Quinn, CTO of Digicel, shared with us its story at Ultra-broadband Forum (UBBF2016)
LRTV Custom TV
Do You Really Need Gigabit Infrastructure?

11|29|16   |     |   (0) comments


Altibox is the biggest fiber-to-the-home (FTTH) player and the largest provider of video and TV in Norway. They started out with zero customers in 2002. Now they have close to half a million households and companies attached to their FTTH business. Nils Arne, CEO of Altibox shared with us their story and insight on 5G at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
BTís Openreach Strategy & Its Updates in 2016

11|29|16   |     |   (0) comments


A lot of developments at Openreach this year in terms of strategy and planned investments. Peter Bell, CIO of Openreach BT, shared with us the updates of Openreach at Ultra-broadband Forum (UBBF2016).
Upcoming Live Events
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Cable Nodes Becoming a Choke Point
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 12/5/2016
Consolidated Snaps Up Fairpoint for $1.5B
Iain Morris, News Editor, 12/5/2016
Small Arctic ISP Caches Netflix in New Way
Mari Silbey, Senior Editor, Cable/Video, 12/7/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
A Mobile Safari Click Here
Literally.
Latest Comment
Live Digital Audio

Even when there's a strong pipeline of female talent in the comms industry, it tends to leak all the way to the top. McKinsey & Company says women experience pipeline leakage at three primary points: being unable to enter, being stuck in the middle or being locked out of the top. Each pipeline pain point presents its own challenges, but also opportunities to stop the leak. Wireless operator Sprint is making a conscious effort to improve its own pipeline from new recruits to the C-suite, and it wants the rest of the industry to do the same. In this Women in Comms radio show, WiC Board Member and Sprint Vice President of Enterprise Sales Nelly Pitocco will give us her take on the industry's pipeline challenges. Pitocco, who joined Sprint in May and has spent 20 years in the comms industry, will also offer solutions, share how Sprint is tackling the challenge within its own organization and take your questions live on air.