Optical Network Equipment Market
Dell’Oro: Optical Transport market to hit $17B by 2027; Lumen Technologies 400G wavelength market
According to a recent forecast report by Dell’Oro Group, the Optical Transport equipment demand is forecast to increase at a 3 percent compounded annual growth rate (CAGR) for the next five years, reaching $17 billion by 2027. The cumulative revenue during that five year period is expected to be $81 billion.
“We expect annual growth rates to fluctuate in the near term before stabilizing to a more typical 3 percent growth rate,” said Jimmy Yu, Vice President at Dell’Oro Group. “There is still a large amount of market uncertainty this year due to the economic backdrop—economists are predicting a high chance of a recession in North America and Europe. However, at the same time, most optical systems equipment manufacturers are reporting record levels of order backlog entering the year, and we expect that most of this backlog could convert to revenue when component supply improves this year,” added Yu.
Additional highlights from the Optical Transport 5-Year January 2023 Forecast Report:
- Optical Transport market expected to increase in 2023 due to improving component supply.
- WDM Metro market growth rates in next five years are projected to be lower than historic averages due to the growing use of IP-over-DWDM.
- DWDM Long Haul market is forecast to grow at a five-year CAGR of 5 percent.
- Coherent wavelength shipments on WDM systems forecast to grow at 11 percent CAGR, reaching 1.2 million annual shipments by 2027.
- Installation of 400 Gbps wavelengths expected to dominate for most of forecast period.
About the Report
The Dell’Oro Group Optical Transport 5-Year Forecast Report offers a complete overview of the Optical Transport industry with tables covering manufacturers’ revenue, average selling prices, unit shipments, wavelength shipments (by speed up to 1.2+ Tbps). The report tracks DWDM long haul, WDM metro, multiservice multiplexers, optical switch, Disaggregated WDM, DCI, and ZR Optics.
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Separately, Lumen Technologies is expanding its 400G wavelength network across North America. Lumen said it has now deployed the network in 70 markets. More than 240 data centers have access to Lumen’s 400G Wavelength Services, and the network has over 800 Tbit/s of capacity.
Lumen said it plans to continue its intercity 400G expansion this year, pushing the network “deeper into the metro edge.” The company noted that wavelength services will assist customers in moving workloads to the cloud, and provide private, dedicated connections.
Enterprise customers can also examine network options, plan out their wavelengths and get cost estimates with Lumen’s Topology Viewer.
References:
https://www.prnewswire.com/news-releases/lumen-kicks-up-its-400g-offering-across-the-us-301730126.html
Industry Analysts: Important Optical Networking Trends for 2023
Optical Transceivers:
Optical transceivers save space and reduce the need for additional transmitting and receiving devices because they transmit and receive information all in one device! Additionally, they are an economical, compact tool to enable networks to send information over larger distances, come in a variety of Ethernet speeds from Fast Ethernet to 100 Gigabit Ethernet, and offer great flexibility to grow your network while leveraging existing network devices and infrastructure.
Many newer, high quality Small Form-factor Pluggable (SFP) modules have Diagnostic Monitoring Interface (DMI), which automatically monitors SFP operations such as output and input power, temperature, and supply voltage in addition to providing multimode, single mode, and multi-rate SFP options for more flexibility.
Market Research Future® (MRFR) predicts that the global optical transceiver market will rise to 8 billion in the U.S. by 2023.
Pluggable optics:
400ZR coherent pluggable optics emerged as a connectivity tool for metro-distributed data center connectivity. In 2023, look for three additional innovations to enable even more opportunities for coherent pluggables.
High-performance pluggables with 0 dBm transmit power and low out-of-band noise will enable coherent pluggable transceivers to cover a richer set of use cases, including deployment in metro networks with multiple cascaded ROADMs. This increased transceiver performance will also push some pluggables beyond the 600-km metro threshold and into a portion of the long-haul network.
Advances in intelligent pluggables management, as being defined in the 28-member Open XR Forum and with inputs to other organizations like the OIF, will ease deployment complexity and enable operational support for advanced functionality like remote diagnostics, auto-discovery, spectrum analysis, and streaming telemetry in all types of non-optical hosts, including switches and routers.
A new class of coherent pluggables, such as Infinera’s ICE-XR with digital subcarrier technology, will enable commercial deployment of point-to-multipoint architectures, where a single high-speed (e.g., 400G) hub optic can communicate with multiple lower-speed (e.g., 25G to 100G in 25G increments) optics without requiring intermediate electrical aggregation – thus reducing the amount of equipment, space, and power utilized and the total cost of network ownership by up to 70% over multiple years.
Heavy Reading’s optical networking analyst Sterling Perrin sees “pluggable optics everywhere” being a dominant theme. “This includes the continuing trends in 400ZR and ZR+ but also a big focus on migrating down to small coherent 100G pluggables, pluggables across 5G XHaul networks, and pluggables in PON,” he writes in a note to Light Reading.
Data center transmission:
In 2023, look for modular, distributed data center deployments to accelerate, along with 400 Gb/s, 600 Gb/s, and 800 Gb/s per wavelength coherent optical connectivity to support their interconnection
Modular data centers, where construction and integration tasks are moved offsite and then shipped and assembled onsite, are becoming mainstream and enabling compute and storage to be quickly and reliably deployed in all types of settings – from just a few racks in a small hut to megawatts of equipment in a multi-story configuration. In 2023, look for modular, distributed data center deployments to accelerate, along with 400 Gb/s, 600 Gb/s, and 800 Gb/s per wavelength coherent optical connectivity to support their interconnection.
Lisa Huff, Omdia’s senior principal analyst covering optical components will keep an eye out for whether 800G and 1.6T transmission will show up next in data centers. “We are in the middle of 400G deployment inside the data center and, as always, there is much hype around what the next data rate will be,” she writes.
“Omdia expects to see 2x400G and 8x100G solutions start to be deployed inside the data center in 2023, but we will not see high-volume deployment until about 2025 when DR4 and FR4 variants mature and 400G starts to slow down,” she writes. Deployments of 1.6T may start in 2026, but Huff said it might be 2027 or later before we see significant volume.
Coherent routing:
Omdia Senior Principal Analyst Timothy Munks said that with data traffic growing at the network’s edge, network operators are looking for better solutions to collect and move that data into metro and core networks.
“The convergence of IP and optical, or coherent routing, provides cost effective aggregation and transport of diverse traffic streams and offers network operators a pure pay-as-you-grow business model for adding capacity,” he writes.
In this video, Cisco’s Bill Gartner, SVP/GM Optical Systems & Optics, chats with Phil Harvey to discuss their Leading Lights Award and how Routed Optical Networking is transforming infrastructure and the economics of the network.
References:
Cisco restructuring plan will result in ~4100 layoffs; focus on security and cloud based products
Cisco’s Restructuring Plan:
Cisco plans to lay off over 4,100 employees or 5% of its workforce, the company announced yesterday. That move is part of a restructuring plan to realign its workforce over the coming months to strengthen its optical networking, security and platform offerings. Cisco noted in financial filings it expects to spend a total of $600 million, with half of that outlay coming in the current quarter. The company will also reduce its real estate portfolio to reflect an increase in hybrid work.
In a transcript of Cisco’s Q1 2023 Earnings Call on November 17th, Cisco Chief Financial Officer Scott Herren characterized the move as a “rebalancing.” On that call, Chairman and Chief Executive Officer Chuck Robbins said the company was “rightsizing certain businesses.”
Herren and CEO Chuck Robbins said the company is looking to put more resources behind its enterprise networking, platform, security and cloud-based products. In the long run, analysts expect Cisco margins to improve as more revenue comes from security and software products.
By inference Cisco is de-emphasizing sales of routers to service providers who are moving towards white boxes/bare metal switches and/or designing their own switch/routers.
A Cisco representative told Fierce Telecom:
“This decision was not taken lightly, and we will do all we can to offer support to those impacted, including generous severance packages, job placement services and other benefits wherever possible. The job placement assistance will include doing “everything we can do” to help affected employees step into other open positions at the company.”
Cisco implemented a similar restructuring plan in mid-2020 which included a substantial number of layoffs.
Growth through Acquisitions:
Much of Cisco’s revenue growth over the years has come from acquisitions. The acquisitions included Ethernet switch companies like Crescendo Communications. Kalpana and Grand Junction from 1993-1995. Prior to those acquisitions, Cisco had not developed its own LAN switches and was primarily a company selling routers to enterprises, telcos and ISPs.
Here are a few of Cisco’s acquisitions over the last five years:
- In 2017, Cisco acquired software maker AppDynamics for $3.7 billion. It bought BroadSoft for $1.9 billion in late 2017.
- In July 2019, Cisco acquired Duo Security for $2.35 billion, marking its biggest cybersecurity acquisition since its purchase of Sourcefire in 2013. Acquiring Duo Security bolstered Cisco in an emerging category called zero trust cybersecurity.
- In late 2019, Cisco agreed to buy U.K.-based IMImobile, which sells cloud communications software, in a deal valued at $730 million.
- In May 2020, Cisco acquired ThousandEyes, a networking intelligence company, for about $1 billion.
Aside from acquisitions, new accounting rules have been a plus for revenue recognition. The rules known as ASC 606 require upfront recognition of multiyear software licenses.
One bright spot for Cisco have been sales of the Catalyst 9000 Ethernet switches. The company claims they are the first purpose-built platform designed for complete access control using the Cisco DNA architecture and software-defined SD access. This means that this series of switches simplifies the design, provision and maintenance of security across the entire access network to the network core.
There is also an opportunity for Cisco in data center upgrades. The so-called “internet cloud” is made up of warehouse-sized data centers. They’re packed with racks of computer servers, data storage systems and networking gear. Most cloud computing data centers now use 100 gigabit-per-second communications gear. A data center upgrade cycle to 400G technology has been delayed.
Routed Optical Networking:
Cisco in 2019 agreed to buy optical components maker Acacia Communications for $2.6 billion in cash. China’s government delayed approval of the deal. In January 2021, Cisco upped its offer for Acacia to $4.5 billion and the deal finally closed on March 1, 2021. Acacia designs, manufactures, and sells a complete portfolio of high-speed optical interconnect technologies addressing a range of applications across datacenter, metro, regional, long-haul, and undersea networks.
Acacia’s Bright 400ZR+ pluggable coherent optical modules can plug into Cisco routers, enabling service providers to deploy simpler and more scalable architectures consisting of Routed Optical Networking, combining innovations in silicon, optics and routing systems.
Routed Optical Networking works by merging IP and private line services onto a single layer where all the switching is done at Layer 3. Routers are connected with standardized 400G ZR/ZR+ coherent pluggable optics.
With a single service layer based upon IP, flexible management tools can leverage telemetry and model-driven programmability to streamline lifecycle operations. This simplified architecture integrates open data models and standard APIs, enabling a provider to focus on automation initiatives for a simpler topology. It may be a big winner for Cisco in the near future as service providers move to 400G transport.
References:
https://www.fiercetelecom.com/telecom/cisco-plans-cut-5-workforce-under-600m-restructuring-plan
https://www.cisco.com/site/us/en/products/networking/switches/catalyst-9000-switches/index.html
https://www.cisco.com/c/en/us/about/corporate-strategy-office/acquisitions/acacia.html
Heavy Reading: Coherent Optics for 400G transport and 100G metro edge
Telecom Infra Project introduces Open FAN to promote multi-vendor interoperability
The Telecom Infra Project (TIP) has announced a new initiative for “open fixed access networks (FAN)” at the FYUZ conference in in Madrid, Spain. The Open FAN initiative is being led by Telefónica, Telecom Italia, and Vodafone. As in the mobile radio access network, the goal is to ensure products from competing vendors can be combined in the same fixed access network. That is the essence of true interoperability.
The work will focus on improving interoperability and diversity in the access network, accelerating innovation and boosting capacity in the last mile through the transition from GPON to XGS-PON. Specifically, Open FAN is targeting the link between optical line terminals (OLTs) and optical network terminals (ONTs), the boxes that sit at either end of a fiber connection. Integration with SDN controllers, the traffic cops of the network, is another priority. Open FAN has just become the latest TIP sub-group, part of the fixed access project group.
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TIPs Fixed Broadband Project Group is developing a new generation of open and disaggregated technologies that help operators increase the availability of fast and reliable broadband services across the world. The goal of the TIP fixed access sub-group is to build access networks capable of delivering high speed connectivity over the last mile. The primary objective for this group is to achieve a high degree of interoperability in the access domain, including:
- East-west interworking and integration between network elements
- Northbound integrations to OSS and network management systems
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Participants are currently drawing up technical requirements for a so-called “pizza box” OLT that can be delivered to the local telco. They will issue a request for information later this year as they assess the technical capabilities of vendors and their “readiness” for open FAN.
“The disaggregation of OLTs represents a valuable opportunity to broaden the telecom supply chain, which we’ve seen has become more important than ever during recent times,” said Paolo Pellegrini, TIM’s access innovation project manager, in telling remarks. “TIM is excited about the opportunities to work with a new generation of hardware and software suppliers who can bring innovative solutions that will help us build more cost-effective and efficient networks.”
Data from Omdia, owned by Informa, shows that just three vendors controlled 85% of the market for OLTs last year. Two of them, Huawei and ZTE, are Chinese, leaving Nokia as the only other supplier. The lack of alternatives explains why the UK government was less restrictive in fixed than it was in mobile when clamping down on Chinese vendors.
TIP probably hopes interoperability will boost competition in a market for passive optical network (PON) products worth about $8 billion in sales last year. If operators could more easily buy OLTs separately from ONTs, developers could focus resources on one area. An OLT specialist would not require an ONT capability to compete.
Today, mixing FAN products from different vendors is problematic, said a source at TIP, and Nokia seems to agree.
“It is not easy to do, but it is something that we do,” said Federico Guillén, the head of Nokia’s network infrastructure business group, during an interview at the recent Network X event in Amsterdam. “If you do this, you have to put in some rules for how the OLT and the ONT communicate and set a lower denominator, which means you are missing some features. Interoperability doesn’t come for free.”
Telecom already has an interface for connecting OLTs to ONTs, called OMCI (for ONT management control interface). But when it comes to multi-vendor interoperability, this does not seem to have delivered. “It was perfectly standardized, and everyone was implementing and following, but they were choosing different options,” said Stefaan Vanhastel, the chief technology officer for Nokia’s fixed network unit.
Nokia served about 24% of the global PON market last year, according to Omdia’s data, but has increased its presence in OLTs, according to Guillén. A backlash against Huawei in many countries outside China has probably helped. “Our market share is growing, especially where we want it to grow, which is the OLT side,” he told Light Reading. “The ONT side is a very crowded space.”
Specialists may find that challenging Nokia in the FAN is just as hard as it is in the RAN. Last year it pumped €4.2 billion (US$4.2 billion) into research and development, including investments in the silicon platforms that support higher-speed broadband services. At Network X, it announced a new OLT, branded Lightspan MF-14, that provides an upgrade path to 100G-capable networks. “Operators have a solution that will be reusable as line cards are upgraded over time,” said Julie Kunstler, chief analyst with Omdia. “This has lots of capacity and ONTs will be upgraded as needed.”
The new TIP Open FAN subgroup expects to issue an RFI to establish the technical capabilities and readiness of suppliers to deliver such a solution later in the year, with test and validation to follow.However, there was no mention of network equipment vendor support for open FAN in the TIP’s statement and without that it could struggle. If enough operators urge change, those vendors may have to budge – but the wariness of Ericsson and Nokia about open RAN illustrates just how difficult that could be. Open FAN also appears to lack an equivalent of the O-RAN Alliance, the group developing open RAN specifications. TIP has previously distanced itself from specifications development. If an alternative to OMCI is needed, who takes the lead?
Whether open FAN becomes as big a deal as open RAN is doubtful. For one thing, operators spent about $37 billion less on FAN products last year than on RAN kit, according to Omdia’s numbers. Most of their fixed-line capex goes into civil engineering, and no amount of interoperability or virtualization will save money there.
Despite the muscle of Huawei, Nokia and ZTE, the market was also growing more competitive before open FAN was a thing, according to Omdia’s Kunstler. Ciena, an optical equipment vendor based in the US, and Sterlite, an Indian firm that sells fiber-optic cable, are just two examples of companies moving into a PON market forecast to generate nearly $16 billion in annual sales by 2027.
References:
https://telecominfraproject.com/wp-content/uploads/Fixed-Access-UCD_v1.0_20220628.pdf
Nokia announces Lightspan MF-14 platform as “most advanced in the world”
Nokia has unveiled what it boldly claims is the “most advanced fiber broadband platform in the world,” one it’s calling the “fiber-for-everything” world. According to the vendor, the new Lightspan MF-14 platform extends the upper reaches of its fiber broadband range, bringing “unmatched” capacity, low latency, intelligence, reliability and efficiency. The platform, which falls into “Generation 6” of such things, is already being tried out by customers looking to build 25Gbit/s-capable network in Europe, North America and the Asia-Pacific region. Lightspan MF-14 is being premiered at the Network X event in Amsterdam from 18 to 20 October.
The industry is entering a ‘fiber-for-everything’ era. Once operators have deployed fiber-to-the-home, their networks pass every other building in the street, as well as the homes, meaning they can connect businesses and other services. Fiber PON will be capable of supporting high bandwidth consumer services, industry 4.0 applications, business connectivity, 5G transport and smart city services. This creates more revenue opportunities, lowers TCO and significantly reduces overall power consumption. This new broadband era, designated Broadband 6 by the World Broadband Association (WBBA), requires a new technical solution. Nokia’s pioneering Lightspan MF-14 is the first Gen 6 optical line terminal (OLT) in the world and has already been selected by customers building 25 Gb/second capable networks in Europe, North America and Asia Pacific.
Geert Heyninck, Nokia’s VP Broadband Networks, said: “Fiber-to-the-home is becoming fiber-for-everything. This is enabled by several technology advances, most notably higher speed PON technologies to accommodate all new services, and SDN to bring more intelligence in the network. If you think about it, the massive number of connection points on fiber make it a challenge to get an instant view of everything that happens in your network, fully automate network control, and perform actions with no service interruption. Our current portfolio is doing an excellent job in supporting many of these requirements for today’s and tomorrow’s services, but we are looking ahead. The MF-14 platform will suit operators who are planning large scale 25G PON, 50G and even 100G PON within the same environment.”
In his recent report* Erik Keith, Senior Research Analyst for Broadband Infrastructure at S&P Global, says: “The PON market is at a pivotal moment in the evolution of networks, where fiber broadband means so much more than residential connectivity. There is a huge opportunity for service providers to connect everything much more efficiently by leveraging their existing fiber broadband networks. After all, the same fiber cables that were originally laid in residential areas also pass commercial buildings such as office blocks, hospitals and government properties. This approach eliminates multiple overlay networks, minimizes digging up the streets, and lowers energy use substantially. The new Lightspan MF-14 OLT can enable operators to deploy a solution that will last for decades, while providing a platform that can increase network performance exponentially compared to most networks in use today.”
Based on new, advanced hardware and disaggregated software design, MF-14 is a generation leap in fiber access solutions. It is the highest capacity platform in the industry and the only solution ready for mass delivery of 25G, 50G and 100G PON services. It’s also the industry’s first OLT with the six-nines availability and sub-millisecond latency needed for mission critical industry 4.0 and 5G transport services.
Frontier Communications, the first in the U.S. to trial 25G PON, is also the first to evaluate MF-14 in its live network. Frontier’s Scott Mispagel, SVP National Architecture and Engineering, said: “We are proud to be the first to embrace this next-generation platform. This is another way for us to provide customers with the fastest broadband available. The MF-14 platform will support our path to 100G using our existing fiber network and future-proof our network with speeds that will continue to outpace cable and other technologies for generations to come.”
Nokia Lightspan MF-14
In July this year CityFibre – the UK’s largest independent full fibre infrastructure platform – signed a 10-year equipment agreement to support its nationwide network upgrade. John Franklin, CTIO, CityFibre said: “As we accelerate our full fibre rollout to serve a third of the UK market by 2025, the demand placed on those networks will also accelerate. MF-14’s flexibility and capacity will help us to meet the needs of our partner’s and their customers for generations to come.”
* From “Nokia launches 6th generation flagship fiber platform” published by S&P Global Market Intelligence.
Resources
Lightspan MF-14, a generation leap in fiber access solutions
- 4x higher capacity than previous generation, ensures smooth evolution to massive connectivity with 25, 50, 100.
- No single point of failures, ensuring the highest availability (six nines) in the market. This is important because consumers and business depend on broadband non-stop
- Sub millisecond latency for 5G transport and new array of industry 4.0 applications
- 20% higher power efficiency than the industry average so operators can decrease overall power consumption as they connect more points on fiber network and meet sustainability targets
- Modular software architecture for more agility for upgrading software and onboarding of new functionality, with much less effort and time.
- SDN programmability and open APIs to enable control function by Nokia or 3rd party network control functions
- Fast telemetry and digital mirror in the cloud for enhanced network overview
- For more details visit the web page
Fiber for everything website
World Broadband Association (WBBA) BB6 network characteristics, published in Next-Generation Broadband Roadmap white paper, Oct 2022
- Residential speed. Up to 50Gbps *
- Enterprise speed. Up to 1.6–3.2Tbps
- Intelligence. Fully autonomous
- Reliability & latency. Deterministic reliability / <1ms latency (hard guarantee) / very low jitter
- Trustworthy & green. 10×-plus better per bit energy efficient, very fast problem detection and response (seconds)
- Connectivity. Fiber sensors, 10 times more IoT terminals
- Sensing Capability. Fiber sensing for applications, application and computing awareness, AI
*Speeds listed are speculative given the timeframe, and further work by the WBBA will explore this in more detail in future reports.
Dell’Oro: Demand for Optical Transport equipment strong and headed for double-digit growth in NA
In a new report, the Dell’Oro Group states that the demand for Optical Transport equipment remained strong in North America during 2Q 2022. In the quarter, the North American market for Optical Transport grew 10 percent year-over-year.
“At this pace, we could be headed for another year of double-digit growth in North America,” said Jimmy Yu, Vice President at Dell’Oro Group. “While we expected another year of North American optical market expansion in 2022, we thought the growth rate could slow a bit after such a strong 2021. However, considering the first-half results and higher than usual backlog held by equipment manufacturers, we think a double-digit rate of growth could occur in 2022. Our biggest concern, however, remains to be the component shortage and supply chain issues that have limited revenue growth for the past couple years,” added Yu.
Additional highlights from the 2Q 2022 Quarterly Report:
- The worldwide Optical Transport market excluding China grew 2 percent in 2Q 2022 and is projected to grow a little over 4 percent in 2022.
- The region with the lowest year-over-year growth rate in the quarter was Asia Pacific due to lower demand in China.
- The system manufacturers with the highest share of North America Optical Transport revenue in the quarter were Ciena, Infinera, Cisco, and Fujitsu. These four vendors held a combined market share of approximately 85 percent. Please see chart below:
The Dell’Oro Group Optical Transport Quarterly Report offers complete, in-depth coverage of the market with tables covering manufacturers’ revenue, average selling prices, and unit shipments (by speed including 100 Gbps, 200 Gbps, 400 Gbps, and 800 Gbps). The report tracks DWDM long haul, WDM metro, multiservice multiplexers (SONET/SDH), optical switch, optical packet platforms, data center interconnect (metro and long haul), and disaggregated WDM.
To purchase this report, please contact us at [email protected].
Dell’Oro: DWDM equipment market to exceed $17 billion by 2026
Demand for optical transport DWDM equipment is forecast to exceed $17 billion by 2026, according to a new Dell’Oro Group report.
The $17 billion in revenue for dense wavelength-division multiplexing (DWDM) equipment represents the bulk of revenue for the total optical transport equipment market. Dell’Oro forecasts the total market to grow at a 3% compound annual growth rate (CAGR) to $18 billion by 2026 as a result of sales of DWDM systems delivering wavelength speeds over 200 Gbit/s.
“Although there is a ton of market turbulence, we do not see demand for DWDM equipment letting up,” said Jimmy Yu, Vice President at Dell’Oro Group. “In fact, the biggest issue is that demand seems to be growing faster than supply. Hence, even if a mild recession were to occur, we think the worst case scenario is that demand will align with supply sooner.
“Hence, we are projecting continuous growth for DWDM system revenues. The only difference over the next five years, compared to previous years, is that we are expecting more growth from DWDM Long Haul since IPoDWDM should lower the use of WDM Metro systems in data center interconnect,” added Yu.
Dell’Oro predicts that DWDM long-haul revenue will grow at a five-year CAGR of 5%. Over the same period, the research group forecasts that metro WDM revenue will grow at a CAGR of 3%.
Additional highlights from the Optical Transport 5-Year July 2022 Forecast Report:
- DWDM Long Haul revenue is forecasted to grow at a five-year compounded annual growth rate (CAGR) of 5 percent.
- WDM Metro revenue is forecasted to grow at a five-year CAGR of 3 percent.
- Capacity shipments each year are projected to grow at an average annual rate of 30+ percent.
- Spectral efficiency is expected to improve at an average annual rate of 9 percent.
Dell’Oro forecasts that DWDM long-haul system sales will grow faster than wavelength division multiplexing (WDM) metro system sales over this five-year period. While the DWDM market is experiencing quite a bit of “market turbulence,” demand is not expected to decrease, said Jimmy Yu, VP at Dell’Oro Group, in a statement.
Capacity shipments each year are projected to grow at an average annual rate of over 30%, according to Dell’Oro. The group also predicts that spectral efficiency will improve at an average annual rate of 9%.
Overall, the optical transport equipment market grew 2% year-over-year in Q1, largely from increased market growth in the Americas, according to another recent report by Dell’Oro. The war in Ukraine, COVID lockdowns, supply chain constraints and inflation all contributed to a decline in the optical transport equipment market in Europe, the Asia-Pacific and China.
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Researchers at Omdia are also bullish about growth in the optical network market, which they project will exceed $20 billion by 2027. Analysts at Omdia forecast that the metro WDM market will exceed $9 billion by 2026.
References:
Optical Transport DWDM Equipment Market to Surpass $17 Billion by 2026, According to Dell’Oro Group
Cisco’s 5G pitch: Private 5G, 5G SA Core network, optical backhaul and metro infrastructure
At MWC 2022 in Barcelona, Cisco revealed its Private 5G market strategy together with partners. It was claimed to usher in “a new wave of productivity for enterprises with mass-scale IoT adoption.” Cisco’s 5G highlights:
- Cisco Private 5G as-a-Service delivered with global partners offers enterprise customers reduced technical, financial, and operations risks with managing enterprise private 5G networks.
- Cisco has worked in close collaboration with two leading Open RAN vendors to include O-RAN technology as part of Cisco Private 5G and is currently in customer trials with Airspan and JMA.
- Multiple private 5G pilots and projects are currently underway spanning education, entertainment, government, manufacturing, and real estate sectors.
- 5G backhaul and metro infrastructure via routed optical networking (rather than optical transceivers like those sold by Ciena)
Cisco Private 5G:
The foundation of the solution is built on Cisco’s industry-leading mobile core technology and IoT portfolio – spanning IoT sensors and gateways, device management software, as well as monitoring tools and dashboards. Open Radio Access Network (ORAN) technology is a key component of the solution. Cisco is working in close collaboration with ORAN vendors, JMA and Airspan, and is currently in customer trials utilizing their technology.
Key differentiators of Cisco Private 5G for Enterprises:
- Delivered as-a-Service: Delivered together with global service providers and system integration partners, the offer reduces technical, financial, and operational risks for enterprise private 5G networks.
- Complementary to Wi-Fi: Cisco Private 5G integrates with existing enterprise systems, including existing and future Wi-Fi versions – Wi-Fi 5/6/6E, making operations simple.
- Visibility across the network and devices: Using a simple management portal, enterprise IT teams can maintain policy and identity across both Wi-Fi and 5G for simplified operations.
- Pay-as-you-use subscription model: Cisco Private 5G is financially simple to understand. With pay-as-you-use consumption models, customers can save money with no up-front infrastructure costs, and ramp up services as they need.
- Speed time to productivity: Businesses can spare IT staff from having to learn, design, and operate a complex, carrier class private network.
Key Benefits of Cisco Private 5G for Partners:
- Path to Profitability for Cisco Partners: For its channel partners, Cisco reduces the required time, energy, and capital to enable a faster path to profitability.
- Private Labeling: Partners can private label/use their own brand and avoid initial capital expenses and lengthy solution development cycles by consuming Cisco Private 5G on a subscription basis. Partners may also enhance Cisco Private 5G with their own value-added solutions.
“Cisco has an unbiased wireless strategy for the future of hybrid work. 5G must work with Wi-Fi and existing IT environments to make digital transformation easy,” said Jonathan Davidson, Executive Vice President and General Manager, Mass-Scale Infrastructure Group, Cisco. “Businesses continuing their digitization strategies using IoT, analytics, and automation will create significant competitive advantages in value, sustainability, efficiency, and agility. Working together with our global partners to enable those outcomes with Cisco Private 5G is our unique value proposition to the enterprise.”
The concept of private networks running on cellular spectrum isn’t new — about 400 private 4G LTE networks exist today — but Cisco expects “significantly more than that in the 5G world,” Davidson said. “We think that in conjunction with the additional capacity or also the need for high-value asset tracking is really important.”
During a MWC interview with Raymond James, Davidson said, “Mobile networks aren’t mobile for very long. They have to get to a wired infrastructure,” and therein lies multiple roles for Cisco to play in the telco market.
Cisco’s opportunity in the telco space includes the buildout of new backhaul and metro infrastructure to handle increased capacity and bandwidth, its IoT Control Center, private networks, and the core of mobile network infrastructure.
“We continue to be a market leader in that space,” Davidson said, referring to Cisco’s 4G LTE and 5G network core products. More than a billion wireless subscribers are connected to Cisco’s 4G LTE core, and it plays a central role on T-Mobile’s 5G standalone core, which serves more than 100 million subscribers on a converged 4G LTE and 5G core, he added.
Davidson also expects Cisco’s flattened infrastructure, or routed optical networking, to gain momentum in wireless networks. But first, a definition. For Cisco, optical refers to the technology that moves bits from point A to point B, not optical transceivers.
“Our belief is there is going to be a transition in the market towards what we call routed optical networking. And this means that takes traditional transponders and moves them from being a shelf, or a separate box, or a device, and turns them into a pluggable optic, which you then plug into a router,” he said.
That’s where Cisco’s $4.5 billion acquisition of Acacia Communications comes into play. In October 2021, we reported that Cisco’s Acacia unit is working together with Microschip to validate the interoperability of their 400G pluggable optics components – Microchip’s DIGI-G5 OTN processor and META-DX1 terabit secured-Ethernet PHY and Acacia’s 400G pluggable coherent optics.
The second phase of this type of network transformation involves the replacement of modems that exist in optical infrastructure with routers that carry pluggable transponders, Davidson added. The third phase places private line emulation onto that same infrastructure.
Supporting Comments:
“DISH Wireless is proud to partner with Cisco to bring smart connectivity to enterprise customers through dedicated private 5G networks. Together, we have the opportunity to drive real business outcomes across industries. We’re actively collaborating with Cisco on transformational projects that will benefit a variety of sectors, including government and education, and we’re working to revolutionize the way enterprises can manage their own networks. As DISH builds America’s first smart 5G network™, we’re offering solutions that are open, secure and customizable. Teaming with Cisco is a great next step, and we look forward to offering more innovative solutions for the enterprises of today and beyond.”
— Stephen Bye, Chief Commercial Officer, DISH Wireless
“Cisco is busting the myth that enterprises can’t cross Wi-Fi, private 5G and IoT streams. Enterprises are now tantalizingly closer to full visibility over their digital and physical environments. This opens up powerful new ways to innovate without compromising the robust control that enterprises require.”
— Camille Mendler, Chief Analyst Enterprise Services, Omdia
“Developing innovative, customized 5G private network solutions for the enterprise market is a major opportunity to monetize the many advantages of 5G technology. Airspan is proud to be one of the first leading Open RAN partners to participate in the Cisco Private 5G solution and offer our cutting edge 5G RAN solutions including systems and software that are optimized for numerous enterprise use cases.”
— Eric Stonestrom, Chairman and CEO, Airspan
“This partnership opens a world of new possibilities for enterprises. With simple downloaded upgrades, our all-software RAN can operate on the same physical infrastructure for 10+ years—no more hardware replacements every 36 months. And as the only system in the world that can accommodate multiple operators on the same private network, it eliminates the need to build separate networks for new licensed band operators.”
— Joe Constantine, Chief Technology & Strategy Officer, JMA
“5G marks a milestone in wireless networking. For organizations, it opens many new opportunities to evolve their business models and create a completely new type of digital infrastructure. We see strong demand in all types of sectors including manufacturing and mining facilities, the logistics and automotive industries, as well as higher education and the healthcare sector. As a leading Cisco Global Gold Partner, we are excited to help drive this evolution. Thanks to our deep expertise, international capability, and close partnership with Cisco, we can support companies in integrating Private 5G into their enterprise networks,”
— Bob Bailkoskiis, Logicalis Group CEO.
“NEC Corporation is working on multiple 5G initiatives with Cisco. We have a Global System Integrator Agreement (GSIA) partnership for accelerating the deployment of innovative 5G IP transport network solutions worldwide. Work is in progress to connect Cisco’s Mobile Core and NEC’s radio over Cisco’s 5G Showcase in Tokyo, a world leading 5G services incubation hub. Leveraging NEC’s applications, Cisco and NEC will investigate expanding the technical trials including Private 5G in manufacturing, construction, transportation, and others.”
—Yun Suhun, General Manager, NEC Corporation
Industry Projects Underway
Cisco is working together with its partners on Private 5G projects for customers across a wide range of industries including Chaplin, Clair Global, Colt Technology Services, ITOCHU Techno-Solutions Corporation, Madeira Island, Network Rail, Nutrien, Schaeffler Group, Texas A&M University, Toshiba, Virgin Media O2, Zebra Technologies and more. See news release addendum for project details and supporting comments.
Final Thoughts:
“Radio access networks themselves are between $30 billion and $40 billion a year. Depending on who you talk to, optical (networking) can be between $10 billion and $15 billion a year. And then routing is below $10 billion a year,” Davidson said. “Our belief is that the optical total addressable market will start to shift over time as routed optical networks become more prevalent, because it will move from the optical domain into the optic transceiver market,” he added.
Finally, although Cisco repeatedly insists it has no interest in becoming a RAN supplier, it remains strongly supportive of Open RAN. The RAN market “is still closed, it’s locked in, even though there are standards,” he said.
“People do not do any interoperability testing between vendors, which is fundamentally changing with open RAN” because operators are forcing vendors to make their equipment interoperate with open RAN implementations, Davidson concluded.
References:
Microchip and Cisco-Acacia Collaborate to Progress 400G Pluggable Coherent Optics
Additional Resources:
- Cisco Private 5G
- Blog: Private 5G Delivered on Your Terms, Masum Mir, Vice President and General Manager, Mobile, Cable and IoT
IPS Expands Long Haul Submarine Data Transmission Capacity with Ribbon’s 100 Gigabit Ethernet (100GbE) services
Ribbon Communications Inc, a global provider of real time communications software and IP Optical networking solutions to service providers, enterprises, and critical infrastructure sectors, today announced that Tokyo based IPS (a leading provider of international connectivity services for communications service providers), is using Ribbon’s Apollo Optical Networking solution to power 100 Gigabit Ethernet (100GbE) services delivered over both terrestrial and undersea cables from Manilla to Hong Kong and Singapore.
“Our ability to seamlessly deliver connectivity services to our customers over long distances is key to the success of our business,” said Koji Miyashita, President and CEO, IPS. “Ribbon’s Optical transport technology allowed us to maximize our available capacity and transmit world-class communications applications via our submarine services under the South China Sea.”
“Submarine applications must deliver extensive capacity and carry the highest level of communications services on each channel in order to realize cost efficiencies,” said Mickey Wilf, General Manager APAC and MEA Regions for Ribbon. “Our Apollo solution enables IPS to maximize capacity by leveraging dual wavelengths with programmable baud rate and modulation, in conjunction with flex grid technology.”
The solution deployed by IPS leverages Apollo’s high-performance programmable TM800 muxponder cards on Apollo 9600 series platforms to provide optimized long haul undersea connectivity for 100GbE services.
| 9504D | 9603 | 9608 | 9608D | 9624 | ||||
| Size | 1RU | 2RU | 5RU | 5RU | 15RU | |||
| Line Capacity | 1.6T | 2.4T | 6.4T | 6.4T | 19.2T | |||
| Photonics | CDC-F ROADMs, Fixed and Dynamic Amplifiers | |||||||
| Datasheet | Apollo 9504D | Apollo 9603 | Apollo 9608 | Apollo 9608D | Apollo 9624 | |||
| Image | Data Center |
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Data Center |
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About IPS:
IPS Inc. operates as a Carriers-of Carrier in the Philippines providing network services for local and international telecom companies, contact centers and data centers. It has international telecommunication lines connecting Manila with Hong Kong, Singapore, and many other countries. IPS is listed on the Tokyo Stock Exchange.For more information visit ipsism.co.jp/en/.
About Ribbon:
Ribbon Communications (Nasdaq: RBBN) delivers communications software, IP and optical networking solutions to service providers, enterprises and critical infrastructure sectors globally. We engage deeply with our customers, helping them modernize their networks for improved competitive positioning and business outcomes in today’s smart, always-on and data-hungry world. Our innovative, end-to-end solutions portfolio delivers unparalleled scale, performance, and agility, including core to edge software-centric solutions, cloud-native offers, leading-edge security and analytics tools, along with IP and optical networking solutions for 5G. To learn more about Ribbon visit rbbn.com.
References:
https://ribboncommunications.com/products/service-provider-products/apollo-optical-systems
Cignal AI: Metro WDM forecast cut; IP-over-DWDM and Coherent Pluggables to impact market
Optical transport equipment deployment faces increasing headwinds as a broad number of network operators embrace IP-over-DWDM in Metro WDM applications, according to the most recent Transport Hardware Report from research firm Cignal AI. The impact of IP-over-DWDM on capex is expected to be moderate until 2023 when implementation of the new approach gathers momentum.
“IP-over-DWDM is a concept two decades old, but technical compromises, operational challenges, and high cost have prevented its widespread adoption. Gen60C 400ZR/ZR+ pluggable optics can solve these problems with availability well-timed to the 400 Gigabit Ethernet investment cycle,” said Kyle Hollasch, Lead Analyst for Transport Hardware at Cignal AI. “Hyperscale data center interconnect will drive early volumes, but service providers – who are responsible for 75% of optical CAPEX – should get on board in 2023 as the cost savings of IP-over-DWDM becomes impossible to ignore.”
| Cignal AI has cut forecasted spending on standalone optical transport hardware by $1.1B in 2025 as operators introduce pluggable coherent optics into routing and switching equipment to replace standalone traditional and compact modular equipment. This decline will be partially offset by greater sales of IP Routing and Switching hardware, open line systems, and long haul WDM, as well as direct sales of coherent optics to hyperscale operators. Clients can read 400ZR IPoDWDM Market Impact and Forecast for more detail. |
| Additional 3Q21 Transport Hardware Report Findings: |
- Total transport hardware (Optical and IP Switching & Routing) revenue declined -2.5%, with sales in China declining double digits for the second consecutive quarter.
- North American optical revenue grew for the 4th consecutive quarter and registered its first quarter of YoY growth since COVID impacted 2Q20. Fujitsu and Cisco led in revenue growth.
- Sales of optical hardware in EMEA increased YoY as the region registered its 6th consecutive quarter of growth. Regional market leaders Huawei and Nokia declined while ADVA, Infinera, and ZTE grew double digits.
- North American packet transport sales grew 6%, its third straight quarter of growth. Nokia and Cisco led this growth.
- Japanese packet sales continued to grow, up nearly 10% YoY. Cisco increased its lead in the region, with YoY sales growth of 42%.
