By Tim Doiron, Principal Analyst, Intelligent Networking, ACG Research
As we get ready to travel to San Diego, California, for the 2018 OFC Conference and Exhibition March 11–15, I have been reflecting on the data center interconnect (DCI) market and thinking about what we might see at OFC this year.
Although the overall optical networking market struggled through the first three quarters of 2017, the optical DCI use-case, specifically the small form factor (SFF) appliance (“pizza-box”) category, continues to be one of the hottest growth segments in optical networking. Total optical DCI revenue has grown by over 24% y-y through the first three quarters of 2017 with the SFF appliance category increasing at a blistering 81% y-y. Optical DCI now represents over 17% of high-speed optical spending in the metro and long-haul markets.
Strong sector growth is usually followed by robust competition, and the optical DCI SFF appliance category is no exception. During 2017, Infinera, the traditional market share leader in the SFF appliance category, made good on debuting the Cloud Xpress 2, including a recent deployment by Netflix. However, Infinera was challenged by Cisco NCS 1000 and Ciena Waveserver/Waveserver Ai platforms throughout 2017 with both showing increased adoption and revenue growth. The top 3 vendors: Cisco, Infinera and Ciena, now make up approximately 75% of the SFF appliance market in our Q3-2017 analysis. The Coriant Groove G30 also demonstrated an increasing number of deployments and revenue growth throughout 2017, including NTT-Com in Japan. Although being one of the later entrants into the SFF appliance market (announced at 2017 OFC Conference), the Nokia 1830 PSI-2T has also been embraced by numerous customers.
No update on the optical DCI market would be complete without also including Inphi’s ColorZ product. As many of you will recall, Inphi introduced the fixed-wavelength, 100 Gb/s, QSFP-28 pluggable, PAM4, ColorZ module for sub-80km reach at the 2016 OFC conference. After much testing and integration, Inphi proceeded to deploy the ColorZ product as part of Microsoft’s metro-distributed data center strategy. Inphi announced shipping over 10,000 units in Q3-2017 and continues to telegraph that it is on pace to add an additional major customer for ColorZ deployment soon.
As we look forward to OFC 2018, we should look for additional product enhancements and announcements in the SFF appliance category. On the hardware side, look for increases in capacity and density and reductions in power and footprint. On the software side, expect to see additional announcements in areas related to abstraction, configuration, automation, service assurance and streaming telemetry. Service providers need easy and automated turn-up, but they also need to be able to manage, measure and modify the solution throughout the deployment life-cycle with limited or no human intervention. Look for folks to highlight machine learning, artificial intelligence and big data analytics in accomplishing their life-cycle automation objectives. Marcus Weldon, President, Nokia Bell Labs, recently called optics the king of dynamic, deterministic networking (#DDN). He also happens to be one of the plenary session presenters on Tuesday, March 13, 2018. You won’t want to miss it.
I look forward discussing optical DCI and other Intelligent Networking topics with you in sunny San Diego. Safe travels everyone!
Posted: 9 February 2018 by
Tim Doiron, Principal Analyst, Intelligent Networking, ACG Research
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