A year ago, the optical sector -- for better or worse -- seemed relatively free of the hype surrounding SDN and NFV. The primary owners of optical infrastructure were more or less the usual telco suspects, and 100G was becoming more common in long-haul networks, but 10G was dominant in regional and metro networks.
Going into 2015, a lot has changed and will continue to change. As such, here are the top five optical trends to watch in 2015:
1. Optical's software revolution
The optical sector has gotten the message it can't sit out the software revolution hiding behind its hardware. It needs to be an enabler of the SDN/NFV transformations happening at other layers. Vendors have since started to introduce flexible-grid ROADM technology, new control plane capabilities and management features to do just that. But, they are not stopping there: Heavy Reading Senior Analyst Sterling Perrin notes that the ultimate target is integrating the optical and IP layers via SDN-based software control.
- The New Wave of IP + Optical Integration
- OFC: Ciena Smartens Up Photonic Layer
- Cyan Punches Up Its Packet Optical Pitch
- Ciena Amps Up Software Play, Attacks VNF 'Agility Gap'
- Infinera Flexes Its Multi-Layer Muscles
- Coriant Intros SDN, NFV Portfolio
2. Data center interconnection and the rise of metro 100G
Data center interconnectivity on a regional basis is the biggest factor in expanding 100G from long-haul networks into metro networks. Big carriers and Web giants that are investing aggressively in cloud services started creating demand for metro 100G this year, at least a few years ahead of the expectations of some vendors. Suppliers have responded quickly with new platforms designed for the metro market, and 2015 is shaping up to be a big year for regional 100G data center interconnections.
- Infinera Targets Data Center Connectivity Market With Metro Platform
- Infinera Appoints Elby As Cloud Guru
- Ekinops Entices 100G Metro Market
- Ciena Fans 100G Metro Flames
- KVH Takes Its Elastic Data Center Service Beyond Japan
3. Emergence of Web giants as significant optical buyers
Speaking of the Web content firms, or "Web scale" companies, as they increasingly are being referred to, these players collectively are becoming one of the fastest growing market opportunities for optical vendors. Google (Nasdaq: GOOG), Amazon.com Inc. (Nasdaq: AMZN), Facebook and other big names also present vendors with a different type of customer, with different deployment criteria and purchasing cycles than their traditional telco customers. Everyone in the sector has been positioning around the Web scale market, and now we'll see who is ready to take advantage. And, this couldn't be happening at a better time, as some optical suppliers face lower capex from AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) in 2015.
- Optical Vendors Optimistic Despite Shrinking Market
- Infinera Looks to Rise Above Capex Concerns
- Ciena Upbeat Despite Q4 Loss
- Bell Labs Chief Slams 'Toy' Networks
- SDN Enables WebCo Collab: ATIS Members
4. Technology evolution beyond 100G
It became clear during 2014 that even while the 100G long-haul market was maturing and many of the biggest contracts had been handed out, 100G still has a lot of life left in it. The emergence of the metro market and the Web giants as buyers are evidence of that. So, maybe the need to figure out what comes next does not seem terribly pressing, but throughout next year, we should hear much more about the evolution of 400G and 1 Terabit, technologies that have seen their fair share of demonstrations and trials already, as well as some selective network upgrades to 200G.
- ZTE Claims 400G Record
- OIF Pushing 400G Specs Forward
- Tata Eyes Subsea's 400G Future
- Eurobites: Netflix Takes 1Tbit/s in Paris
- Verizon Reminds Us That 200G Exists
- Terabit in Action at SC14
- Geek Alert: CenturyLink, Infinera Take Terabit Network to SC14
5. Consolidation in the optical components segment
This might be true of any year, but could be especially so in 2015. The optical components sector has seen some consolidation as the components specialist positioned for market opportunities such as 100G, but the consensus is that more is necessary. Some companies have begun to position for what clearly look like M&A opportunities in the next 12 months: witness JDSU (Nasdaq: JDSU; Toronto: JDU)'s planned corporate split, which analysts believe could spin off JDSU's optical components group almost directly into the arms of Finisar Corp. (Nasdaq: FNSR). Others may be eyeing how to best compete in a crowded market as the sector gets ready for its next big technology evolution.
- Bit Parts: NetScout, JDSU Hint at M&A Wave
- Fibercore Buys Fibertronix
- Inphi to Buy Cortina's Optical Assets
- The M&A Way to Achieve 400G Goals
We've covered only a handful of burgeoning optical trends here. There are many more common threads developing, from the sector's overall reshaping along packet-optical lines to the evolution of certain specific product capabilities from one vendor to another. Tell us in the comments section what you will be watching for in optical in 2015.
— Dan O'Shea, Managing Editor, Light Reading