40/100GbE market to net $4.3B by 2016

The IEEE�s efforts to create 40- and 100-Gigabit Ethernets (40/100GbE) will result in $4.3 billion in annual revenues by 2016, according to a new report from CIR (www.cir-inc.com). While the initial demand for the new networking speeds will come from large data and switching centers, CIR believes that the impact of these new standards will be felt throughout the network.

For both datacom and telecom, Ethernet will lead the way in terms of speed, offering the highest data rate formats available. The ITU will follow by encapsulating these formats into its own Optical Transport Network (OTN), which will gradually replace SONET/SDH, say CIR analysts.

The near-term potential for next-generation networks has increased with the introduction of the 40G option, since it can be built with today�s laser and modulation technologies and existing MSAs, say analysts. Power users in large data centers, high-performance computer environments, and Internet exchanges who are using 10G link aggregations are expected to make a rapid move to 40G server ports once they become available. According to CIR�s report, the market for 40GbE is expected to reach $3.1 billion by 2016.

Although the new standards will impact every segment of the network from long-haul to interconnect, the initial demand thrust is expected to come from servers, which will account for just over 40% of the 40/100GbE market by 2016. Even with 40GbE, there will still be a need for 100 Gbits/sec, especially for switch connections, which will represent half of the 100GbE market in 2016.

CIR says that components and modules firms are preparing for the next wave in networking, with such signs as new enthusiasm for InP-based optical integration; proliferation of new modulation schemes; and serious discussion of new MSAs, especially the QSFP MSA, which CIR believes is the most likely candidate for both 40G and 100G transceivers.

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