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Optical/IP

Optical Gear Rising, Report Says

Optical networking hardware sales grew last quarter, thanks largely to a modest but solid increase in demand for new remote-controlled gear. And carriers seem ready to shell out even more in the first quarter of 2003, according to a recent report from Infonetics Research Inc.

But don't get your hopes up yet. "This may be the effect of year-end budget clearing among carriers, but we are optimistic," says Michael Howard, principal analyst and cofounder of Infonetics.

Howard says sales of Sonet/SDH, WDM, and even PON (passive optical networking) equipment rose modestly from the third to fourth quarters of 2002, and he predicts an increase in sales for the first quarter 2003, based on input from carriers and vendors.

Responsible for much of the growth is equipment, such as Sonet gear, that supports remote configuration and service provisioning -- what Infonetics dubs "intelligent" optical hardware. Sales of this kind of gear are steadily outstripping sales of "legacy" gear that doesn't have these capabilities. According to Howard, this trend seems certain to continue, since carriers don't want more equipment that calls for "truck rolls" of technicians to make changes manually.

Demand for Sonet/SDH gear continues to rule the optical market. About 69 percent of spending for all optical gear, intelligent or otherwise, went to Sonet/SDH equipment last quarter, with 30 percent to WDM gear, and about 1 percent to PON products. The top two subsegments within these categories were metro Sonet/SDH, which accounted for 57 percent of all quarterly spending; and long-haul WDM, which represented 22 percent of all sales.

Yes, you read that right: Long-haul WDM continues to grow steadily, albeit as a result of expanding on existing installations, not new connections. "Carriers continue to add capacity to existing routes," Howard says.

PON growth was also surprising: Despite ongoing pooh-poohing of PONs by many analysts and some service providers, Howard says PON sales rose 42 percent to 27 million last quarter and included not only ATM-based PON gear, but newer equipment based on Ethernet.

The top hardware manufacturer is Alcatel SA (NYSE: ALA; Paris: CGEP:PA), which took 15 percent of worldwide optical hardware revenues, by Infonetics' calculations. Alcatel is followed closely by Nortel Networks Corp. (NYSE/Toronto: NT), Siemens AG (NYSE: SI; Frankfurt: SIE), and Fujitsu Ltd. (KLS: FUJI.KL), in that order, all between 10 and 13 percent market share.

Interestingly, Howard says the quarterly upturn wasn't reflected in a single geographic region, such as China or the Asia/Pacific. Instead, he says sales in North America and Europe/Middle East/Africa pulled ahead this quarter, and Asia wasn't tops: "Spending has slowed in the Asia/Pacific." But in the long term, he predicts, each of the three regions will account for about 30 percent of worldwide sales.

— Mary Jander, Senior Editor, Light Reading

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gea 12/5/2012 | 12:33:53 AM
re: Optical Gear Rising, Report Says "Sonet gear, that supports remote configuration and service provisioning -- what Infonetics dubs "intelligent" optical hardware."

Something must have been lost in the translation here. SONET gear has been remotely reconfigurable for almost a decade. Of course, some carriers choose to configure their networks manually, but all main vendor's SONET gear is and has been configurable via local LAN or 'remote' DCC access for many years.
gea 12/5/2012 | 12:33:53 AM
re: Optical Gear Rising, Report Says "Sonet gear, that supports remote configuration and service provisioning -- what Infonetics dubs "intelligent" optical hardware."

Something must have been lost in the translation here. SONET gear has been remotely reconfigurable for almost a decade. Of course, some carriers choose to configure their networks manually, but all main vendor's SONET gear is and has been configurable via local LAN or 'remote' DCC access for many years.
zettabit 12/5/2012 | 12:33:52 AM
re: Optical Gear Rising, Report Says Market share today is being defined solely by vendor incumbancy and installed base. In other words, existing vendors into surviving carriers are the ones who are getting new business.

Since long-haul WDM primarily consist of carrier in-fill of unused channels, and a very few overbuilds where systems are capacity exhausted, that explains why SONET/SDH sales dominate spending.

So vendor share positions are easy to figure out:

Alcatel is dominent SDH supplier to European & Latin American PTTs, has some installed base within SBC, and is strong at Sprint.

Fujistu is key supplier to all RBOCs.

Nortel has SONET share in Verizon & SBC, and is selling at any price required to win business in Asia.

Funny Lucent wasn't mentionned, as they have strong share in RBOCs and some success in Europe and Asian incumbents.

What I haven't seen in the past 1-2 years is any major break-through by any of these vendors into a major new customer (ie: Nortel winning a major PTT or Fujitsu winning a major North American carrier or any PTT).
mdwdm 12/5/2012 | 12:33:52 AM
re: Optical Gear Rising, Report Says Please stop pretending you know more about SONET than what "SONET for DUMMIES" tells you.

SONET ADMs are not designed to provide "dynamical provisioning" (or
"intelligent" whatever). It is a well
known fact that for decades it
takes truck rolls and months to provision
services.
gea 12/5/2012 | 12:33:51 AM
re: Optical Gear Rising, Report Says "Please stop pretending you know more about SONET than what "SONET for DUMMIES" tells you."

Sorry bigmouth. I worked in the group at Bellcore/Telcordia that was (and still is) responsible for GR-253. In addition, I co-edited Telcordia's "Notes on SONET" (and wrote some of the chapters), with Yau Ching Ching, the inventor of SONET. (I also just recently published a journal article on SONET-framed optical packet networking. What are YOUR credentials?)

Remote provisioning has been possible on any good SONET box for years. Dynamic bandwidth allocation (not explicitly mentioned in the article) is still pre-standard (despite the LCAS proposals), and I doubt is responsible for the uptick in sales mentioned here, at least not with the RBOCs.

(FYI, Fujitsu has also offered ring "seeding" for many years--you can tell a Fujitsu remote NE to go and provision the other nodes in that NE's ring.)

Truck rolls are normally for hardware upgrades, and depending on the vendor software upgrades. But remote provisionability has been around for years. Hell, what do you think they do in a NOC?
Elvis Doesn't Live 12/5/2012 | 12:33:51 AM
re: Optical Gear Rising, Report Says It also has something to do with what happens to be included in the measurement. For example, to measure the metro market, it be fair to say that you would include DWDM, SONET and Ethernet. However, should you include just transport and switching or should you include routing as well? Should you limit it to the LATA or do you measure by distance? Are you doing strictly carrier deployments for their CO/Tandem offices or are you including enterprise as well?

Plenty of ways to cut it and for the vendors who buy into these things to spin them.
gea 12/5/2012 | 12:33:50 AM
re: Optical Gear Rising, Report Says "Please stop pretending you know more about SONET than what "SONET for DUMMIES" tells you."

Sorry bigmouth. I worked in the group at Bellcore/Telcordia that was (and still is) responsible for GR-253. In addition, I co-edited Telcordia's "Notes on SONET" (and wrote some of the chapters), with Yau Ching Ching, the inventor of SONET. (I also just recently published a journal article on SONET-framed optical packet networking. What are YOUR credentials?)

Remote provisioning has been possible on any good SONET box for years. Dynamic bandwidth allocation (not explicitly mentioned in the article) is still pre-standard (despite the LCAS proposals), and I doubt is responsible for the uptick in sales mentioned here, at least not with the RBOCs.

(FYI, Fujitsu has also offered ring "seeding" for many years--you can tell a Fujitsu remote NE to go and provision the other nodes in that NE's ring.)

Truck rolls are normally for hardware upgrades, and depending on the vendor software upgrades. But remote provisionability has been around for years. Hell, what do you think they do in a NOC?
puddnhead_wilson 12/5/2012 | 12:33:49 AM
re: Optical Gear Rising, Report Says you are tipping who you are, and who know you could get canned for it, a la OG. Don't trust LR not to use this knowledge against you somehow later.
Bill Johnson 12/5/2012 | 12:33:48 AM
re: Optical Gear Rising, Report Says Good post gea.

How are things going over in Red Bank?
mdwdm 12/5/2012 | 12:33:44 AM
re: Optical Gear Rising, Report Says Oh Oh ... Let's run.
He is a Bellhead.

But seriously, I acutally talked to DL today, who said "That JERK."

"Remote provisioning has been possible on any good SONET box for years."

Any REAL operation guy knows it does not take a
"good SONET box" to provision services. It
takes a network. SONET was meant for TDM, not dynamical anything. Idiot. Learn how to talk like
a pro.

My credential? I don't need childish credential to talk on this board. But since you are such an egomaniac, maybe it helps you to know I
had a xx ID in cerent.






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