Operators embrace packet-optical in 2014 says Infonetics

Market research firm Infonetics Research says in its new “2013 Routing, IP Edge, and Packet-Optical Strategies: Global Service Provider Survey” that 2014 should be a good year for vendors of packet-optical transport systems. Developers of 100 Gigabit Ethernet (100GbE) technology should be smiling as well according to the report, which focuses on 100GE adoption and pricing expectations, usage of packet-optical transport systems (P-OTS), and the architectural changes occurring to metro networks.

Market research firm Infonetics Research says in its new “2013 Routing, IP Edge, and Packet-Optical Strategies: Global Service Provider Survey” that 2014 should be a good year for vendors of packet-optical transport systems (P-OTS). Developers of 100 Gigabit Ethernet (100GbE) technology should be smiling as well according to the report, which focuses on 100GE adoption and pricing expectations, use of P-OTS, and the architectural changes occurring to metro networks.

“Service providers and vendors have been talking about how to use more optical transport with essential packet functionality to serve as the transport vehicle for packet traffic as an alternative to routers,” said Michael Howard, Infonetics Research’s co-founder and principal analyst for carrier networks in explaining the report’s findings. “Our latest routing strategies study confirms that major changes are underway in carrier networks, with 75% of the operators we talked to using P-OTS now or planning to by 2016.”

Due to the pressures of video, mobility, and cloud services, providers are re-architecting their metro networks by distributing a number of functions from a single central “super PoP” to a number of large next-generation central offices (NG-COs) made up of 5 to 10 super COs in a metro area, says Infonetics.

These distributed functions include broadband remote access servers (BRAS), content delivery networks (CDNs) and caching, deploying servers and storage in “mini data centers” for colocation and cloud services, and the ability to offer services (such as security) to residential and business customers using network functions virtualization (NFV) with software-defined network (SDN) service chaining.

Meanwhile, operators expect to deploy many more 100GbE ports over the next few years, growing from 5% of all their 10/40/100GbE router port purchases in 2013 to 30% in 2015.

“We asked at what price they would buy 100GbE for different applications — data center connections, aggregation, core, etc. — and when,” Howard said. “Some operators are already paying 15 times the price of 10GbE for 100GbE because they need it now, and we found that some operators are willing to pay more for 100GbE for specific parts of their networks; for example, over a third are willing to pay a premium for routes with low fiber availability.”

However, most carriers will wait until 100GbE pricing comes down to 10 times 10GbE or lower, so it behooves manufacturers to continue developments that lower the price of 100GbE, the analyst concluded.

Published in December 2013, Infonetics' 25-page routing strategies survey is based on interviews with router and switch purchase-decision makers at incumbent, independent wireless, competitive, and cable operators from around the world. Respondents control 36% of 2012 worldwide service provider capex and 32% of revenue.

For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.

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