A couple of financial analysts have been touting Ciena as the expected big winner for a future contract for a large 100G metro project at Verizon. While there can be little doubt that the vendor would be part of such a deal, it needs to always be remembered that these announced agreements never compel the service provider to buy one dime from any supplier, and so the actual amount of equipment purchased could be far less than initially indicated. Moreover, the conspicuous absence in the current discussion of Fujitsu, a vitally important metro incumbent vendor to Verizon, strongly points to the service provider buying less than a stellar amount of this gear anytime soon.
Above all, current expectations for growth in the total 100G market are nothing to write home about – one market research firm, usually among the bullish crowd in general, is only projecting about a 25% increase in terms of revenue for coherent transceivers at this data rate over the next several years. Even adjusting for the fact that the price pressures will be much greater on components than on full systems, there seems little room for a major impact in the metro space.
Naturally, there are also the normal obstacles that make proving in products in metro networks more difficult than in the long-haul sector. With 100G specifically in mesh networks, there is the potential problem of stranding a great deal of capacity because it is often difficult to anticipate in advance the amount of bandwidth that will be needed in interconnecting dozens of nodes. In addition to the big challenge of economic matters, although 100G technology is extremely robust, and forward-error correction reduces a lot of operations challenges, it probably cannot be ruled out that a certain amount of line reconditioning and rehabilitation will be necessary in some of the older plant.
Although it has been fashionable on the public network side of the industry to say for a long time that 40G has been on its way out, one should not be surprised if it turns out that there is a notable increase in metro applications at that speed. Most importantly, there is no question that it will remain a 10G world way into the future – and that R&D expenditures involving this hardware will be necessary indefinitely.
[written by Mark Lutkowitz]