Carrier Ethernet Boosts Packet Optical Interest

Carrier Ethernet capabilities, which are just now becoming commercially available in packet-optical transport systems, will drive service provider demand for the products, according to Heavy Reading's Packet-Enabled Optical Networking Quarterly Market Tracker.

According to Sterling Perrin, Heavy Reading analyst and author of the tracker, sales of packet optical products are set to grow from $0 in 2007 to $2.8 billion in 2012, making it the fastest growing portion of the optical market.

That growth will be driven primarily by the ability to deploy carrier Ethernet services enabled by the new optical products. But while demand is strong, most vendors are just now making connection-oriented Ethernet capabilities available on their systems.

Packet optical systems have yet to contribute meaningful revenues to the overall market, but that should change as optical vendors ramp up sales of Ethernet-enabled systems, Perrin says.

In the past six months, several vendors have made announcements around their packet optical products. ECI Telecom Ltd. , for one, recently added Sonet capabilities to its platform. (See ECI Adds to XDM-300.)

Meanwhile, Ciena Corp. (NYSE: CIEN) recently announced new Ethernet capabilities and purchased Ethernet specialist World Wide Packets to beef up its packet optical portfolio. (See Ciena Enhances 4200 With Ethernet, Ciena Adds Ethernet, Ciena Takes Out World Wide Packets, and Ciena Buys WWP.)

At the same time, carriers are expressing deeper interest in packet optical products. Verizon Communications Inc. (NYSE: VZ) reportedly chose the Fujitsu Network Communications Inc. Flashwave 9500 as part of a packet optical RFP issued last summer. (See Report: Fujitsu Wins Verizon RFP, Verizon Preps God Box RFP, and Fujitsu Updates the MSPP.)

— Ryan Lawler, Reporter, Light Reading

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