Optical Core Challengers: Rise Up!
In the core optical space, the top marketshare spots are well cemented by Alcatel-Lucent (NYSE: ALU), Ciena Corp. (NYSE: CIEN), and Huawei Technologies Co. Ltd. , with a combined 82 percent share in optical crossconnects. But that could change as the core P-OTS market grows, according to Heavy Reading analyst Sterling Perrin.
That's because P-OTS represents a rethinking of the optical core. Carriers want the packet and optical networks to converge, and simply upgrading a crossconnect isn't going to do it.
"The onus is on the incumbents to produce next-generation products that are best in class. Otherwise, operators are prepared to bring in new suppliers to meet their core packet-optical transport needs," Perrin writes in a recent report, "The Core Packet-Optical Transport Evolution."
That's why there's a bona fide optical startup, Cyan Optics Inc. , in the P-OTS space. (See Cyan Plays God With Optical.)
Of course, the incumbents aren't taking this lying down. Alcatel-Lucent made its core P-OTS bid Thursday by announcing the 1870 Transport Tera Switch, due to ship in the second quarter of this year. Ciena had previously announced its next-generation optical system, the 5400 family. (See AlcaLu Joins the War for the Optical Core and Ciena Catches Packet/Optical Convergence Bug.) AlcaLu's 1870 didn't get released in time to be included in Perrin's report, by the way. Other core P-OTS vendors discussed in the report include Huawei, Hitachi Ltd. (NYSE: HIT; Paris: PHA), Infinera Corp. (Nasdaq: INFN), and Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA).
Crossconnect vendors missing from that list so far include Ericsson AB (Nasdaq: ERIC) and Sycamore Networks Inc. (Nasdaq: SCMR).
Ericsson already plays in the P-OTS segment for metro networks, with the SPT 2700, but it's yet to develop a core product. The distinction matters, because core P-OTS requires a larger switching capacity -- at least 1 Tbit/s, by Perrin's definition. (See Ericsson Makes Packet-Optical Play and Redefining P-OTS.)
Most optical crossconnect vendors will probably play the core P-OTS game, because the new systems have to be substantially different from what's out there today. Those that don't, however, "will be quickly left behind," Perrin warns.
— Craig Matsumoto, West Coast Editor, Light Reading