DECEMBER 15, 2009 – Heavy Reading says that packet-optical transport system (P-OTS) technology, which is now being deployed in metro networks, will start to be deployed in carrier core networks in 2010 as part of a transformation of telecom networks to a pure packet-based architecture. The market research firm makes this prediction its new report, The Core Packet-Optical Transport Evolution.
"To date, the P-OTS evolution has been all about the metro network, but we're now seeing P-OTS move into the core of the network," says Sterling Perrin, senior analyst with Heavy Reading and author of the report. "Part of the reason core P-OTS is emerging now is that the core transport network has largely been ignored for a couple of years, while the industry has focused on rebuilding access, metro, and aggregation networks for packets and IP. In reality, growth in Ethernet and IP, Internet data and video, and mobile data and video affect core as well as metro access networks."
Operators increasingly see core packet-optical transport as the solution to the challenges facing the core evolution, Perrin notes. "This new class of network element uses many of the functions being put into metro/regional P-OTS, such as WDM, Ethernet, and SONET/SDH integration, but with greater capacity and scale -- and with some key differences, such as high-capacity OTN switching and ASON/GMPLS control plane," he explains. "Operator requirements for core P-OTS are just emerging, and vendors are just starting to announce products now. We expect several more product announcements to come in 2010 and 2011, and we expect revenues to begin ramping in 2010."
For other perspectives on packet-optical transport, see "Packet optical transport systems: The new POTS" and "PONPs optimized for legacy and packet transport."
Key findings of The Core Packet-Optical Transport Evolution include the following:
The core P-OTS segment is still nascent, and products will be just coming to market throughout 2010. Most vendors need to commercialize their large-scale (terabit and multi-terabit) OTN optical switch fabrics to deliver core P-OTS platforms. Huawei is now shipping a large-scale OTN/DWDM product called the OSN 8800, but has yet to introduce a packet switching fabric on this platform. Optical startup Cyan Optics is very close, with its commercially shipping Z77 product. (See "Simplifying the TDM to packet transition.") Product activity from the major DWDM and switching systems suppliers will intensify throughout 2010.
The core P-OTS revenue opportunity is in displacing operator spending on long-haul DWDM systems and standalone optical crossconnects. Heavy Reading believes 2010 to be the first year of core P-OTS revenue, with significant ramp-up starting in 2011. By 2014, Heavy Reading expects that core P-OTS will reach $1.66 billion worldwide, generating significant revenue from North America, Europe, and Asia/Pacific.
Modularity will be a key requirement for core P-OTS products. High modularity is a recurring theme in core P-OTS in our discussions with vendors and network operators. High modularity is the best way to integrate multiple functions into a system without making the integrated system too costly and/or too restrictive to be broadly adopted by the industry.
Established optical switching vendors are at risk of losing customers and share. Optical switching has been a closed club throughout this decade, dominated by just three suppliers -- Alcatel-Lucent, Ciena, and Huawei. But the converged nature of core packet-optical transport is creating opportunities for insurgent vendors. Many vendors view the new requirements as an opportunity to get into the core and take share from the optical switching incumbents. Incumbents do have some advantage in terms of installed base, but they must produce next-generation products that are best in class.
The Core Packet-Optical Transport Evolution analyzes the market drivers and primary applications for core P-OTS, explores enabling technologies and standards, and offers in-depth five-year forecasts covering worldwide optical core networking revenues, broken out by region.
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