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
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
Join our fireside chat at Mobile World Congress in Barcelona as we discuss the operational implications of NFV with Justin Paul, head of OSS marketing at Amdocs.
The race to deliver gigabit broadband services is accelerating, and G.fast is a key technology that telecom service providers can deploy to compete successfully.
If NFV is to progress, proofs of concept and trials need to come out of the lab and into live networks in 2015.
This year is expected to be a year of great market evolution across most telecom sectors, specifically in virtualization and Long Term Evolution (LTE).
Bring your own device (BYOD) is flourishing, creating the need for better security on shared personal/workplace mobile devices.
Flash Poll
From The Founder
The New IP is actually bigger even than business. Like another hugely important tech that Light Reading is digging into right now, the New IP has the potential to change the world by fundamentally advancing what it is possible for people to achieve with communications.
LRTV Documentaries
The Three Cs of MWC15

3|2|15   |   2:33   |   (1) comment


My visit to this year's Mobile World Congress is going to dominated by three Cs – cloud, cells and coffee.
LRTV Huawei Video Resource Center
Huawei Shares Its Vision of the Future of Mobile Networks Innovations

2|26|15   |   2:30   |   (0) comments


Mobile broadband is changing our lives. It's reshaping the Internet, industry, and society. It allows us to freely connect with one another anytime, anywhere. At this year's Mobile World Congress, Huawei will share its latest insights and newest ideas and technologies that will shape the future of MBB. They will showcase their end-to-end MBB solutions that will ...
LRTV Huawei Video Resource Center
Accelerate Digitizing, Boost Digital Business

2|26|15   |   6:14   |   (0) comments


A new digital revolution is leading us to a better connected world. Together with millions of digital partners, Huawei will help CSPs to build their digital service ecosystem and aggregate a wide variety of digital services. In this video, we find out how Huawei is going to help CSPs implement digital operations.
LRTV Huawei Video Resource Center
The Secret Recipe to Enabling Hyper-Growth Industries

2|26|15   |   3:38   |   (0) comments


With a number of successful cases on network capability exposure, Huawei is going to share the secret recipe to enabling hyper-growth markets with a step-by-step approach.
LRTV Documentaries
BTE 2015 Is Bigger & Even Better

2|25|15   |   03:13   |   (4) comments


This year's Big Telecom Event (BTE) in Chicago is going to provide more opportunities than ever for networking, getting to grips with key industry challenges and opportunities and, equally as important, having some fun.
LRTV Interviews
Light Reading ICT Leaders Roundtable at MWC 2015

2|12|15   |   1:07   |   (2) comments


On Sunday March 1, 2015, Light Reading will host an ICT Leaders Roundtable in partnership with Huawei. At this half-day event, CIOs, analysts and researchers will discuss key industry trends like virtualization in the cloud with a specific focus on new business models. Located at the luxurious Renaissance Hotel near the Fira Barcelona, space is limited so please ...
LRTV Documentaries
Going Green in 2015

2|12|15   |   02:04   |   (0) comments


Energy efficiency is set to be an incredibly hot topic in the telecom industry this year.
LRTV Custom TV
SDN & NFV: Where Are We Going From Here?

2|11|15   |   11:27   |   (0) comments


Vitesse Semiconductor CTO Martin Nuss gives his perspective on why SDN and NFV should be tightly interconnected and how he sees the industry moving forward.
LRTV Documentaries
Time for Gigabit Europe?

2|9|15   |   01:27   |   (4) comments


Gigabit broadband networks are springing up all around the US and they'll soon become more commonplace in Europe.
LRTV Interviews
Brocade Brings New IP Vision to 2020 Vision Executive Summit

2|3|15   |   4:23   |   (0) comments


In December 2014, Light Reading gathered telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Brocade's Kelly Herrell shared his company's strategy at ...
LRTV Interviews
Brocade's Kelly Herrell on the New IP

2|2|15   |   12:36   |   (0) comments


In December 2014, Steve Saunders sat down with Brocade VP of Software Networking Kelly Herrell at Light Reading's 2020 Vision executive summit in Reykjavik, Iceland. They spoke about Brocade's approach to the New IP, the future of the telecom industry, and more.
LRTV Huawei Video Resource Center
Dr. Dong Sun Talks About Carriers' Digital Transformation & Huawei’s Telco OS

1|29|15   |   6:28   |   (0) comments


Dr. Dong Sun, Chief Architect of Digital Transformation Solutions at Huawei, discusses how telecom operators can become digital ecosystem enablers and deliver optimal user experiences that are in real-time, on-demand, all-online, DIY and social (ROADS).
Upcoming Live Events
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
All Upcoming Live Events
Infographics
Net neutrality, broadband services and the current outlook on data consumption, as presented by the New Jersey Institute of Technology.
Hot Topics
Small Cells Enabling Location Services
Sarah Thomas, Editorial Operations Director, 2/25/2015
Verizon Takes Radio Dot to Detroit, VoLTE Overseas
Sarah Thomas, Editorial Operations Director, 2/27/2015
FCC Adopts Title II Rules
Alan Breznick, Cable/Video Practice Leader, 2/26/2015
60% of World Lacks Internet: Facebook Report
Mitch Wagner, West Coast Bureau Chief, Light Reading, 2/25/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Check out Light Reading's interview with Jay Samit, the newly appointed CEO of publicly traded SeaChange International Inc. With a resume that includes Sony, EMI, and Universal, Samit brings a reputation as an entrepreneur and a disruptor to his new role at the video solutions company. Hear what he had to say about the opportunities in video, as well as the outlook for cable, telco, OTT and mobile service providers.
G'day! And welcome to an entirely new feature on Light Reading -- our weekly "CEO-to-CEO" interview.