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HR Sees Core DWDM Surge
The long-haul DWDM market grew by more than 30% in 2006 with further growth ahead in 2007 and 2008, according to Heavy Reading research
February 6, 2007
5 Min Read
NEW YORK -- Worldwide sales of long-haul DWDM (dense wavelength division multiplexing) products grew by more than 30 percent in 2006, to $1.8 billion, as network operators scrambled to add capacity in the wake of surging demand for bandwidth, according to a major new report from Heavy Reading (www.heavyreading.com), the market research division of CMP Technology's Light Reading (www.lightreading.com).
Long-Haul DWDM: Market & Technology Outlook provides a detailed look at the long-haul DWDM sector through an extensive and exclusive survey of network operators worldwide; a forecast of the DWDM equipment market; and information gathered from direct interviews with carriers and suppliers.
The findings of this latest research reveal a market in the midst of an impressive recovery, as operators not only shore up capacity on their installed base of long-haul DWDM gear to keep up with demand, but also overlay routes or entire backbones with new gear to take advantage of the latest generation of optical equipment.
Long-Haul DWDM: Market & Technology Outlook addresses key questions now facing network operators looking to expand network capacity, including:
At what pace will backbone bandwidth demand continue to grow, and is there any way to "future proof" a core DWDM network?
How can network operators take advantage of new technologies to improve provisioning times and lifecycle costs, given their capital constraints?
How will the trend in the metro-aggregation network toward Ethernet and packet networking affect network operator decisions in the core?
Will growth in the core network be cyclical or linear?
Will wavelength services migrate to optical transport network (OTN) services? And will OTN migrate to a true networking layer, beyond Sonet/SDH?
Will 40-Gbit/s transport be squeezed out of the market by 100-Gbit/s Ethernet?
This report explores each of these questions in detail, with key answers provided by an exclusive worldwide survey of 88 service provider employees, designed to elicit their core DWDM deployment plans and feature requirements. Survey respondents represent more than 60 network operators worldwide, with 40 percent of responses coming from carriers with annual revenues of $1 billion or more. The survey was supplemented by direct interviews with DWDM operators and technology suppliers.
"The long-haul DWDM market is on fire," notes Scott Clavenna, Chief Analyst with Heavy Reading and author of the report. "In 2006, the long-haul DWDM market including those systems designed for backbone networks, with spans in excess of 1,000 kilometers – grew more than 30 percent, to approximately $1.8 billion. This growth benefited nearly every long-haul DWDM vendor worldwide."
The vast majority of network operators either are upgrading, or soon will upgrade, their DWDM backbones, Clavenna adds. "According to our service provider survey, 52 percent of respondents say their company is currently expanding its DWDM backbone; another 42 percent will expand in2007 or 2008."
Other key findings of Long-Haul DWDM: Market & Technology Outlook include the following:
The "bandwidth glut" is over. Operators worldwide are reporting limited bandwidth supply and more stable pricing. Many new backbone optical builds are underway, and there are few if any "distressed assets" in the carrier market that can disrupt pricing and supply in wholesale markets.Operators may be getting the opex religion, finally. Operators put lifecycle costs at the top of their list of requirements for core DWDM systems, above initial installation cost and a range of next-gen features. Operators also point to the high ongoing operational costs and capital costs of adding additional capacity as key concerns.
Vendors must focus on rolling out 40-Gbit/s Ethernet and keep developing 100-Gbit/s Ethernet for their next releases. Regardless of recent demonstrations and activity around 100-Gbit/s Ethernet, carriers all want to see 40 Gbit/s, so vendors have to respond.
Core switching must evolve. All the operators we surveyed saw a real need to move beyond simple STS or VC4 switching systems to something more optimized for packet transport. Solutions such as Provider Backbone Bridges with Traffic Engineering and Transport MPLS are gaining interest in the metro-aggregation network of a number of large carriers, and setting the stage for a core switch that is packet-optimized in a similar fashion. This could become a new product line from transport switch vendors, rather than router or Ethernet switch vendors.
Long-Haul DWDM: Market & Technology Outlook is essential reading for a wide range of industry participants, including the following:
Telecom equipment suppliers: How will the market for DWDM equipment take shape over the coming months and years? How will expected revenue shifts affect your product lines? How will the rise in demand for DWDM technology affect your revenue prospects and opportunities? How will the ongoing evolution of gigabit-class Ethernet affect your product plans? Which suppliers are in the best position to maintain and grow market share?
Gigabit Ethernet subsystem vendors: How is the evolution to 100-Gbit/s Ethernet likely to occur in core networks? Does your product line match the anticipated demand curve? How will the emergence of 100-Gbit/s Ethernet affect demand for 40-Gbit/s products?
Telecom service providers: How is the DWDM sector evolving to meet your needs? Which suppliers are taking an approach that fits best with your company's strategy? Are your current suppliers the best option, or are there other choices that are better aligned with your plan?
Investors: Which equipment makers are in the best position to thrive in this market sector over the coming years? Which companies are emerging as the early winners in this sector, and which ones are likely to struggle for market share? How significant will DWDM market growth be to the telecom equipment industry?
Long-Haul DWDM: Market & Technology Outlook costs $3,995 and is published in PDF format. The price includes an enterprise license covering all of the employees at the purchaser's company.
For more information, or to request a free executive summary, contact:
Dave Williams
Sales Director, Heavy Reading
858-485-8870
[email protected]
Press/analyst contact:
Dennis Mendyk
Managing Director, Heavy Reading
201-587-2154
[email protected]
###About Heavy Reading
Heavy Reading is an independent market research organization offering quantitative analysis of telecom technology to service providers, vendors, and investors. Its mandate is to provide the comprehensive competitive analysis needed today for the deployment of profitable networks based on next-generation hardware and software.
About CMP Technology
CMP Technology (www.cmp.com) is a marketing solutions company serving the technology industry. Through its market-leading portfolio of trusted information brands, CMP has earned the confidence of more technology professionals than any other media company. As a result, CMP is the premier provider of access, insight and actionable programs designed to connect sellers and buyers in ways that yield superior return on investment. CMP Technology is a subsidiary of United Business Media (www.unitedbusinessmedia.com
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