Infonetics: Usual price rules may not apply to 100G

JANUARY 31, 2010 By Stephen Hardy -- Speaking at last week’s Lightwave “Future of Optical Networking” e-conference, Andrew Schmitt, directing analyst, optical, at Infonetics Research, suggested that the usual “2X multiple” price threshold might not apply to 100-Gbps technology.

JANUARY 31, 2010 By Stephen Hardy -- Speaking at last week’s Lightwave “Future of Optical Networking” e-conference, Andrew Schmitt, directing analyst, optical, at Infonetics Research, suggested that the usual “2X multiple” price threshold might not apply to 100-Gbps technology.

The 2X multiple is an industry rule of thumb, derived from the evolution from 2.5 to 10 Gbps networks, that suggests that a new data rate won’t be fully embraced by carriers until its price drops to double that of the previous generation. In other words, 4X the performance for only 2X the price.

A study Infonetics conducted of carriers considering 100-Gbps technology would appear to support the common wisdom. Study responses indicated that 75% of carriers polled will deploy 100 Gbpste when its per-port price reaches twice that of 40 Gbps. However, Schmitt said he believes that many carriers may not insist that the technology reach that watermark before they purchase it -- particularly if they’re making the jump straight from 10 Gbps.

That’s because the modulation formats now under consideration for 100 Gbps -- particularly dual polarization quadrature phase-shift keying paired with coherent detection -- offer significant improvements in operational cost that at least partially offset technology cost. The new 100-Gbps technology is more spectrally efficient than 10 wavelengths of 10 Gbps, for example, and doesn’t limit the number of degrees in-network ROADMs could support in the way a 10x10-Gbps approach might. In fact, in link aggregation and/or statistical multiplexing applications, it would take 14 to 15 links of 10-Gigabit Ethernet to match the horsepower of 100 Gbps, Schmitt asserted.

Schmitt’s comments echo those of Glenn Wellbrock, director of backbone network design at Verizon. In an interview with Lightwave after the carrier announced its initial deployment of commercial 100-Gbps technology, “I think we’ll always use 100G instead of 10x10, at least at the cost points we see it coming at because of the spectral efficiency.” (See “Verizon plans more 100G and 40G deployments” for more on this interview.)

Infonetics doesn’t predict much deployment of 100-Gbps ports this year, Schmitt revealed. However, the market should pick up significantly in 2013.

See Schmitt’s keynote presentation in the archives of Lightwave’s “Future of Optical Networking” e-conference.

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