Report: Don't Forget Optical Software

While the market for optical networking equipment has sustained major body blows this year, one small segment of that market has shown only minor injuries: software.

So says a new report from Communications Industry Researchers Inc., which estimates that total U.S. sales of optical network management software will be roughly $2.5 billion this year -- about half of all network management software sold to carriers in the U.S. Overall, that represents a decrease of just 9 percent from last year -- a relatively small loss compared with the greater-than-30-percent reduction in optical equipment spending estimated by most analysts.

And the market's expected to grow, albeit modestly. CIR estimates that by 2006, software to manage optical equipment will account for $3.6 billion in annual sales in the U.S., and it will be on the verge of a major growth spurt, as carriers start investing in network improvements.

According to the report, U.S. carriers may not buy much new optical networking gear this year, but they'll shell out 20 percent of what they paid for existing equipment to renew the software that manages it in their networks. This includes software to provision, find faults, secure, and track the performance of DWDM, Sonet, and optical switching equipment.

The market identified here pertains to management hardware devices, along with services management and carrier operations based on those devices. It does not include the larger, more stable market of operations support systems (OSS) software (see Billing Software Market Worth $30B? and RHK's Fat OSS).

Growth in the optical net management segment will help several suppliers, according to CIR. Ongoing license renewals for net management software will continue to bring small software revenues to vendors such as Lucent Technologies Inc. (NYSE: LU) and Nortel Networks Corp. (NYSE/Toronto: NT), even as their equipment revenues suffer.

The optical net management software market will also continue to benefit a handful of key independent software vendors (ISVs), including Telcordia Technologies Inc. and the carrier management software section of Hewlett-Packard Co. (NYSE: HPQ). ISVs like these specialize in software systems that bring together multiple element management systems designed to handle a single vendor's devices.

Indeed, Telcordia's process of certifying hardware vendors' compatibility with its management software isn't likely to disappear anytime soon. "The process moves fees from the carriers to the equipment suppliers," says senior CIR senior analyst Ian McPherson. Carriers like that kind of insulation, even though the cost of getting certified by Telcordia represents a hardship for equipment makers large and small.

This year alone, revenues to ISVs will comprise roughly 39 percent of total U.S. sales for the segment, CIR estimates. This level is expected to hold steady and even increase over time, as ISVs get involved in helping carriers centrally manage a growing roster of disparate networking devices.

While there's growth across all segments of optical net management software, some types will likely feature greater sales as networks get more sophisticated. CIR's McPherson says performance management software, which tracks the health of network devices running in a network, is set to grow faster than other kinds of management software.

"As carriers adopt dynamic protection schemes, such as mesh restoration, they're going to require better information about the status of all network devices," he says. After all, if a DWDM box or an optical add/drop multiplexer fails, it reduces the value of a mesh restoral scheme.

— Mary Jander, Senior Editor, Light Reading
BobbyMax 12/4/2012 | 10:02:01 PM
re: Report: Don't Forget Optical Software There has been a lot of progress made by AT&T and Bell Labs on Network Management principles. A lot of small vendors have taken a short route to managing and monitoring networks. A lot ofd recent vendors are unable to integrate their software with the classical OSSs used by public carriers. These vendors have also failed the ISO recommendations on Network Management. Most of the public carriers desire network management functions to be performed with the help of a common software.

Finally, Osmine recommendations are ccomplicatewd but they must be followed so as to ensure that the management software complies with certain requirements.
52471 12/4/2012 | 10:02:00 PM
re: Report: Don't Forget Optical Software What are the key independent software vendors (ISVs)?
52492 12/4/2012 | 10:01:55 PM
re: Report: Don't Forget Optical Software the key ISVs? None have really done that well with SONET/SDH and DWDM management/config/provision.

Ai Metrix, Syndesis and NetCracker each have deployments to point to. Not sure if there are others.
enigmata9 12/4/2012 | 10:00:22 PM
re: Report: Don't Forget Optical Software There are a few key emerging vendors, such as QOptics, that are focused on Layer 1 automated OAM&P and integration, versus just building signaling stacks, or providing traditional OSS services (such as AM or provisioning, but little else). This is really an area ripe for a solution.

I believe that one of the reasons that there hasn't been much success in the SONET/SDH provisioning and management side is that, despite many of the industry standards efforts to date, each vendor's product still employs a great deal of proprietary features which cause interoperability problems when employed in a multi-vendor environment. For instance, use of DCC overhead is proprietary, as are link discovery mechanisms, and even payload mapping for Ethernet services. These issues are being addressed by standards bodies (ITU LCAS, IETF LMP, et al), but the standards process is long to ratify, and the industry adoption process is even longer (witness the lack of IPv6 adoption). In the end, you can't get a Cisco device to talk with a Lucent to talk with a Nortel, etc...

What I know of QOptics' solution is that they have the ability to provide common control mechanisms to all underlying elements, thus the ability to signal and connect multiple vendor's elements without relying on vendor's proprietary signaling solutions. The key difference in this approach to the other vendors you mention is that the QOptics solution appears to be more tightly integrated with the network elements than traditional OSS, which has some interesting implications for providing substantially greater performance and multi-vendor integration.
mrbconley 12/4/2012 | 9:14:38 PM
re: Report: Don't Forget Optical Software I took a look at their solution. Looks interesting. Has anybody looked at it in depth?

I also took a look at CPlane based upon another posting. Again, any comments?
Sign In