European optical network spending finally showing a pulse says IHS

Our long Continental optical networking nightmare in Europe may be over, according to IHS (NYSE: IHS) -- specifically, the folks who used to be Infonetics Research. The company's new report on 1Q15 optical network hardware sales indicates the Europe/Middle East/Africa (EMEA) market enjoyed year-on-year growth for the second consecutive quarter.

Overall sales of WDM and SONET/SDH equipment rose 5% in the first three months of the year versus 1Q14, thanks to the quickening in EMEA and the ramp up to a large deployment of 100-Gbps technology in Japan. WDM revenue rose for the 11th consecutive quarter, improving 9% sequentially.

Going forward, metro needs should drive sales, according to the market research firm.

"The focus in optical networking is now shifting to the metro as new products targeted specifically at this market are announced and scheduled for production. This will allow data centers and traditional service providers to more rapidly adopt metro 100G in a significant way," said Andrew Schmitt, research director for carrier transport networking at IHS. Alcatel Lucent, Ciena, Cisco, Huawei, and Infinera are the primary beneficiaries of the interest in 100G, Schmitt writes in the report.

Internet content providers (ICPs) continue to become a more significant player in the optical network market, the report adds. Sales to ICPs now account for about 10% of the optical networking spend in North America, HIS Infonetics estimates.

"The service provider market is fracturing into two factions, the telcos and webcos, each with specific optical transport needs and requirements," Schmitt commented. "Webco spending is growing faster right now, so vendors are repositioning to align roadmaps and marketing with their needs."

The IHS Infonetics quarterly "Optical Network Hardware" market research report covers worldwide and regional market size, vendor market share, forecasts through 2019, and analysis and trends for metro and long-haul SONET/SDH and WDM equipment, Ethernet optical ports, SONET/SDH/PoS ports, and WDM ports.

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