Web 2.0 companies likely shape optical network market says LightCounting

While spending by traditional communications carriers still dominates the fiber-optic network technology market, market research firm LightCounting predicts that Web 2.0 companies will become a significant market driver over the next five years. In its most recent semi-annual optical communications market forecast report, LightCounting states that the top 15 Web 2.0 vendors will spend $50 billion in 2015 on servers, networks, and other infrastructure, up from $38 billion in 2014 and $30 billion in 2013.

The uptick contrasts sharply to the slower growth the company expects to see from mainstream communications services providers. Capital expenditures (capex) from such traditional players likely grew just 2% in 2014, according to the report. LightCounting expects mainstream service provider capex will remain flat this year, at $18 billion in 2015 versus the $21.2 billion spent in 2014. If these trends continue, spending by the Web 2.0 top 15 – part of the "LightCounting Internet Index" – will exceed that of the top 15 telecommunications service providers within five to seven years, the market research firm asserts.

Overall, LightCounting expects the optical communications market's value will reach $5.6 billion in 2015 and $8.9 billion by 2020. Sales of 100G optical transceivers and related optical components will exceed $1 billion in 2015 and reach $3.3 billion by 2020, the company adds.

The latest edition of LightCounting's semi-annual optical market report provides analysis of trends in capex of the major global carriers and Web 2.0 companies what these imply for network infrastructure expansion worldwide. It also details annual sales of optical components and modules based on confidential sales information provided by at least 20 manufacturers and interviews with their customers and suppliers. The forecast covers annual shipments and sales for more than 100 product categories of optical modules including transceivers, transponders, line cards, and wavelength-selective switches (WSS). The forecast database includes annual sales data for the last three years and a forecast for the next four years.

LightCounting's conclusions about the rising primacy of Web 2.0 companies echoes similar statements from other market research firms (see "Internet content providers capex growth engine says Ovum" and "Ciena, Infinera, ZTE 2014 optical systems winners says Infonetics").

For more information on optical transceivers and suppliers, visit the Lightwave Buyer's Guide.