What is the state of today's optical networking industry? What role does fiber play in addressing international telecommunications' connectivity and capacity issues? How is the evolution of data center-led cloud infrastructures shaping the networking industry? And what role does OTN play in enabling emerging technologies such as 5G and IoT?
To get answers to these questions and many more, the NGON & DCI Europe team canvassed the opinions of key stakeholders and industry insiders from across the globe to gauge what next-generation optical networking looks like today and what experts expect in coming years. In addition to providing a global snapshot with responses from Europe, Asia, North America, Latin America, Africa and the Middle East, we included in-depth opinions and insight from a range of industry figures for a qualitative context to our survey findings.
With responses from system vendors, network operators, data center operators and component vendors, this report represents a comprehensive insider's view of the major challenges, key trends and future opportunities facing the Optical Networking and DCI industry.
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Global networks face unprecedented growth bandwidth demand. From the insatiable consumer thirst for mobile data to billions of connected IoT endpoints, from bandwidth-hungry video-on-demand services to cloud computing, the world wants more and more from its connections.
That in turn drives transformation in the networking industry. Faced with the challenge of providing bigger, faster, more efficient and reliable services without impacting value, operators the world over are migrating to optical fiber; simultaneously, system and component vendors innovate with new technologies that can deliver the speeds and capacities providers require.
One of the most significant shifts is the evolution of data center-focused networks. Driven by the enormous expansion of cloud computing, the data center market is growing rapidly as business and enterprise users move intranet data service onto the Internet. Between 2017 and 2021, the volume of data center traffic worldwide is expected to almost double, with 95% of that growth coming from the cloud.
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In response to this, data centers are becoming the main hubs of network activity. Neutral operators and major webcos alike are investing heavily in new technology to improve data center-to-user and data center-to-data center connections. The data center interconnect (DCI) market mirrors many of the preoccupations of the wider network -- the shift to optical, the focus on increasing capacity, the need to improve efficiency in the face of burgeoning demand.
Given this climate, it was little surprise to find more than half of the industry figures we surveyed (55.1%) planned to prioritize investment in technology in 2018, with another quarter (26.5%) focusing on research and development.
In terms of the technologies that will have the biggest impact on the industry, 59.2% of respondents named 400G, while 49% mentioned SDN implementation. In addition, 40.8% included 5G in their list, followed by 30.6% who said open networking.
These technologies lay the foundations for what the industry sees as the main trends through this year and beyond. With 100G per wavelength now established as standard, focus shifts to implementing 200G and 400G in metro, regional and long-haul deployments.
The technology to drive this transformation -- Ethernet switches, single and multimode fiber, PAM4 single lambda, 10G-PON standard and higher -- is present and ready. But many in the industry expect to see 200G develop first as other network components, such as transponders and intra-DC transport elements, evolve to handle 400G. The rollout of ultra-high capacity OTN in long haul is expected to be some years away.
Industry executives view virtualization of the network as a crucial step in allowing higher capacities to be handled efficiently and cost-effectively. Software-defined network (SDN) implementation will automate the operation of bigger and busier networks, provide the intelligence for smarter system management and also separate service from physical infrastructure, allowing operators to develop an ever more flexible range of services.
One example of this kind of software-enabled flexibility is the concept of open networking, which will allow operators to share OTN resources. This is another key component necessary to meet rising demand, while keeping costs down through more efficient use of available resources.
Another benefit of network virtualization is that it sets the foundations for 5G, itself a virtualized approach that will radically increase cellular capacity and provide the kind of low power, low latency connectivity required for the next phase of IoT evolution.
Asked who the key players were who will lead the industry through this era of great technological transformation, our respondents selected the big content provider webcos like Amazon, Google and Facebook. Along with neutral operator Equinix, these companies are seen as driving innovation in DCI, as their business models have most to gain from bigger, faster, more efficient DC-centric optical networks. On the vendor side, Huawei came out as the clear winner, confirming the Chinese giant's global status as a true end-to-end network innovator, from consumer devices to carrier solutions.
Looking at the state of the Optical Networking and DCI market regionally, respondents chose Asia as the region likely to provide the most market opportunities and most likely to lead global growth. While countries like India represent enormous untapped potential with huge populations and rapidly developing economies creating massive demand for network services, in the likes of China, Korea and Japan, Asia also boasts global leaders on network innovation and technological sophistication, and is likely to be where many new solutions are pioneered.
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— Logan Armendone-Mowbray is content marketer at KNect365.
(Home page image: Aliis Sinisalu on Unsplash)