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Summary:

The growing popularity of video streaming and the emergence of more and more connected devices means that our need for bandwidth is going to grow. No wonder we are seeing a booming demand for 100G optical gear with 200G & 400G upgrades to follow.

Optical networks are getting bigger, beefier and faster — thanks to a slew of new technologies. It has now become commonplace to hear about optical networks, mostly in the Internet’s backbone, supporting speeds of 100 gigabits per second (Gbps). And to add some context, in 1990 the state of the art was 2.5 Gbps.

This bulkiness of the backhaul networks is happening because we are spending more of our lives online. Internet access and connectivity are now essential to our daily lives, and there is hardly a part of business which has been left untouched. In my post, “ZipCar, Google, cars and the inevitability of the Internet”, I argued that technologies will influence even the most mundane of industries. Just as most of the planet will develop a silicon heartbeat, networks will act like its nervous system — increasing need for bandwidth.

And, thanks to these 100G deployments, the optical industry has had one of its better quarters in recent memory. According to data released by Infonetics Research, a market research company, the global optical hardware demand during April-to-June 2013 was a whopping $3.3 billion.

What is driving the sales?  Andrew Schmitt, principal analyst for optical at Infonetics Research, points to the demand for 100G, which is now hitting mainstream level deployments.

“WDM [wavelength division multiplexing] spending accelerated dramatically in North America as a result of 100G deployments hitting the ground, and worldwide spending on 100G speeds is tracking close to 15% of all optical spending,” Schmitt adds. “China’s 100G deployments will begin in earnest as the year closes, led by China Mobile, and we’re anticipating more than 5,000 ports of 100G in China alone in 2013.”

The boom in demand for optical has helped Huawei, Alcatel-Lucent and ZTE become the top three market share leaders (in that order). But that doesn’t mean others aren’t doing well. Ciena is going to see a big bump from its close relationship with AT&T and Verizon as those two companies start to accelerate the rollout of 100G technologies. Verizon was early to adopt 100G and deployed its first 100G network route in 2009.

And the networks aren’t stopping at 100G. And if AT&T and Verizon get serious about selling us 100 megabit per seconds connections anytime soon, it won’t be long before those 100G pipes are packed shifting information. Even today, without those fat last mile pipes we are pushing around a lot of data on the Internet and hence the need for speed.

The growing popularity of video streaming and the emergence of more and more connected devices means that our need for bandwidth is going to grow, both in the core (backbone) and access (metro and last-mile) networks. Verizon is doing field trials of a new technology from Ciena that allows it to use specialized software to increase the spectral efficiency of the networks and thus double the capacity of its 100G network. Verizon showed it off as part of a field trial over its 260-mile ultra-long haul network between Boston and New York. The trial was conducted for a month.

ImageThe Coherent Optical technology used in this network reduces the amount of amplification necessary to send the optical signals (that carry data) over a greater distance without the additional loss of signal quality. According to Infonetics:

  • Among survey respondents, by 2015 coherent wavelengths will account for 68% of deployments in the core and 29% in the metro
  • 100G will rise from just 5% of deployed wavelengths in 2012 to 37% in 2015

Not to be outdone, Sprint has concluded a 400 Gbps trial using Ciena gear. The company conducted this trial in the Silicon Valley area on a live network. Earlier this year, Sprint trialed and deployed a 100 Gbps network (running between Chicago and Fort Worth, Texas) that required no regeneration of optical signal over a distance of 1,304 miles. Sprint is now looking at boosting its network to 400 Gbps, using Ciena’s Coherent Optical technologies.

Schmitt, when talking to me for a previous article, had pointed out that when there is a 4x improvement in networking gear, things get interesting. If he is right, then we are entering a whole different phase in the networks business — thanks to you sharing too many Snapchats and binge-watching Orange Is The New Black.

  1. Thomas Krafft Friday, August 16, 2013

    Very much looking forward to this. Every increase in bandwidth has brought an entire new class of applications and services – which then, oddly enough, fill the pipe until it needs to be expanded again. Such is the vicious cycle of technology. :)

    Also, by my calculations based on previous rate changes to my wireless plans with each increase in “G” speed, I’m estimating my mobile bill at 400G will be approximately $2,500 per month. …I’m just putting that prediction out there, FYI.

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    1. Thomas

      What are your thoughts about the future applications and why do you think they might take off

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  2. Darren Sealock Friday, August 16, 2013

    Om,
    Did you blow off XO Communications on purpose? XO was actually the first with 100G fiber connectivity to the continental US. The stats below are almost 2 years old, and they’ve only grown from there.

    85 major metropolitan markets across United States
    -Global service delivery to 50+ countries on 5 continents
    -3,300 on-net buildings
    -Ethernet access to hundreds of thousands business locations

    -Tier 1 IP network
    -Built using advanced IP and optical technology from Ciena, Cisco, Infinera and Juniper Networks
    -19,000 route mile inter-city miles
    -1 million metro fiber miles
    -Fixed wireless spectrum in 80 major metropolitan markets

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    1. Dan

      Has there been any recent news from XO on trials? I think that was the key reason why Sprint and Verizon were included in a news report. We have included XO in previous posts by the way.

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      1. In October 2012, XO announced that it had deployed 100G coast-to-coast across its nationwide network. Verizon, AT&T and other carriers at that time had only deployed 100G on certain segments of their networks.

        http://www.xo.com/about/news-and-events/press-releases/xo-communications-first-service-provider-to-deploy-100g-nationwide/

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  3. Great article Om! Just wanted to add that Bandwidth won’t fix the entire problem. The internet is still an unreliable network, so running on a global content delivery network with points of presence throughout the world ensures availability, speed and reliability. CDNetworks takes into account ISP peering issues (especially in China) and locates PoPs strategically to overcome those issues.

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  4. Infinera has 500Gb/s super-channels available right now. They also have a 1Tb/s PIC ready, but that is too much capacity for the market right now…

    http://infinera.wordpress.com/

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    1. Awesome Link. The biggest part about the whole 100gb craze is making it cheap by making it a standard. They want this speed to be as simple as buying some Ethernet ports, not some exotic custom hardware.

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