By Jimmy Yu, Dell’Oro Group
Finally, the wait is over. While it felt like an eternity, OFC week is now here. A look at the first wave of press releases points us to a belief that the theme of OFC 2016 will be about speed and efficiency. Regarding speed, the press releases were geared around the development of higher speed components and better testing equipment as well as 100 Gbps WDM system deployments. Furthermore, this year efficiency announcements went beyond equipment and include software, services, and organizational changes. SDN is here and companies are positioning themselves to capture the opportunity and extract value.
In Dell’Oro Group’s latest Optical Transport research report, we find that demand for 200 Gbps WDM is outstripping earlier projections and we continue to raise our forecast with each report. While the total number of 200 Gbps wavelength shipments is still low, the associated revenue that system equipment manufacturers garner has reached a material level. We estimate that 200 Gbps WDM line card shipments resulted in approximately $230 million of revenue in 2015 and project themto drive at least $720 million in 2016.
There are three drivers for 200 Gbps wavelength demand:
- Supply: Up until mid-2015, Alcatel-Lucent (now Nokia) was the sole vendor supplying a high volume of 200 Gbps WDM line cards. We anticipate that by mid-2016, at least seven vendors will begin volume shipments of these line cards, reducing a service provider’s dependence on a limited number of suppliers. By 2017, all WDM vendors will likely offer a 200 Gbps line card.
- Price: For metro applications, a 200 Gbps line card is priced favorably against a 100 Gbps line card. We estimate that in 2015, the average price of a 200 Gbps line card on a dollar-per-bit basis was approximately 15% to 20% below that of a 100 Gbps line card.
- Efficiency: Besides doubling the capacity of a single fiber, use of 200 Gbps line cards can optimize network utilization. Since all 200 Gbps wavelengths are delivered on flexible modulation line cards that can operate at speeds ranging from, say 50 Gbps to 250 Gbps, a service provider can choose the appropriate line speed for the current demand. Therefore, a service provider can choose to operate a link at a higher utilization by running at 100 Gbps until the need arises to shift the line speed to 200 Gbps in the future.
Needless to say, we believe the future is bright for 200 Gbps WDM, and we think it’ll be a focal point at OFC 2016.
Posted: 19 March 2016 by
Jimmy Yu, Dell’Oro Group
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