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Metro Packet-Optical Transport 2.0: a Heavy Reading Survey Analysis

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Metro Packet-Optical Transport 2.0: a Heavy Reading Survey Analysis EDITOR’S NOTE: THE MATERIAL IN THIS DOCUMENT HAS BEEN EXCERPTED FROM A FULL REPORT BY HEAVY READING AND PREPARED FOR DISTRIBUTION BY CIENA CORP. THROUGH A SPECIAL ARRANGEMENT WITH HEAVY READING. CONTENT HAS BEEN EDITED FOR LENGTH, BUT ALL WORDING IS PRESENTED UNCHANGED FROM THE ORIGINAL REPORT. TO PURCHASE A COPY OF THE FULL REPORT, PLEASE CONTACT HEAVY READING AT WWW.HEAVYREADING.COM. VOL. 11, NO. 3, MARCH 2013 KEY FINDINGS Pricing is paramount Metro Packet-Optical Transport 2.0: in metro packet-optical A Heavy Reading Survey Analysis transport Other important The metro packet-optical transport systems (P-OTS) product differentiators include segment has grown from nothing in 2007 to more than $1.2 integration with Layer billion in equipment sales in 2012. However, because these 2/3 packet networks systems were not truly best-of-breed in both packet and TDM and superior OAM/ functionality, and because packet technology itself was not ready management abilities as a true replacement for TDM transport, the P-OTS market has failed to live up to expectations thus far. The Sonet/SDH MSPP era has clearly We are now entering a new "P-OTS 2.0" era that seeks to build and abruptly ended on the packet shortcomings of the first generation. As we enter The primary drivers this new phase, P-OTS is finally poised to make the crossover for metro P-OTS are and unseat Sonet/SDH as the dominant form of optical transport converged services and metro and aggregation networks. In this new era, we expect transport, P2P Ether- to see: 1) the focus of packet-optical shifts from TDM functions to net services delivery packet functions; 2) pure-packet implementations of P-OTS and mobile backhaul begin to ramp and, ultimately, dominate; 3) switched OTN enters the metro, removing the need for Sonet/SDH fabrics in new IP/MPLS is a serious elements; and 4) 100G takes hold in the metro. contender for metro network architectures As we enter this new metro P-OTS 2.0 phase, Heavy Reading of the future issued a global operator survey to get a better understanding of Operators worldwide operator plans, strategies, and perceptions regarding the present most associate Ciena state and future of packet-optical transport. This survey forms with metro P-OTS the basis of this report. leadership, followed AUTHOR: STERLING PERRIN, SENIOR ANALYST, HEAVY READING by Cisco, Alcatel- Lucent and Huawei Operator interest in OTN in the metro is real, but uptake will likely be less than some suppliers predict © HEAVY READING | VOL. 11, NO. 3, MARCH 2013 | METRO PACKET-OPTICAL TRANSPORT 2.0: A HEAVY READING SURVEY ANALYSIS Introduction & Key Findings Heavy Reading has been tracking metro packet-optical transport systems (P-OTS) since 2007. Since that time, the product segment (as defined by Heavy Reading) has grown from nothing to more than $1.2 billion in equipment sales in 2012. Heavy Reading believes that we are entering a new era of P-OTS, which we'll call P-OTS 2.0, which seeks to build on the packet shortcomings of the first generation. Figure 1 shows that, as we enter this new phase, P-OTS is finally poised to make the crossover and unseat Sonet/SDH as the dominant form optical transport and metro and aggregation networks. Figure 1: Metro Optical Revenue by Segment, 2010-2016 $5.0 $4.5 $4.0 $3.5 $3.0 $2.5 Billions $2.0 $1.5 $1.0 $0.5 $0.0 2010 2011 2012 2013 2014 2015 2016 MS Sonet/SDH P-OTS Metro WDM Source: Heavy Reading In this new era, we expect to see the following: The focus of packet-optical shifts from TDM functions to packet functions Pure packet implementations of P-OTS begin to ramp and, ultimately, dominate Switched OTN enters the metro, removing the need for Sonet/SDH fabrics in new elements 100Gbit/s (100G) takes hold in the metro Heavy Reading conducted a global operator survey to get a better understanding of operator plans, strategies and perceptions regarding the present state and future of packet-optical transport. The survey was conducted in November 2012. Respondents were drawn from the network operator list of the Light Reading readership database. A total of 114 service provider respondents participated in the survey. Figure 2 shows the breakdown of the 114 qualified respondents by the geographic location of the company's headquarters. © HEAVY READING | VOL. 11, NO. 3, MARCH 2013 | METRO PACKET-OPTICAL TRANSPORT 2.0 2 Figure 2: Respondent Breakout by Geographic Location (N=114) Europe 33% Asia/Pacific 25% North America Rest of World 22% 20% Key findings of this report include the following: Pricing is paramount in metro packet-optical transport. Few equipment suppliers lead with this differentiating feature, but overall system pricing topped the list of differentiating features in our survey – by a significant margin. Heavy Reading has been saying for years that the funda- mental mission of transport innovation is to reduce the cost per bit, and this survey finding underscores that message. In addition to overall pricing/cost, two other differentiating features rose to the top: integration with Layer 2/3 packet networks and superior OAM/management abilities. The emphasis on Layer 2/3 integration is consistent with the overall trend seen throughout this survey that the future of P-OTS is in packets, not TDM. We note that the three lowest-scoring differentia- tors were all about Sonet/SDH and TDM. Interestingly, OAM/management features scored signifi- cantly higher than the "speeds and feeds" features by which optical suppliers typically describe and market their products. Converged services transport, point-to-point Ethernet services delivery (or E-LINE) and mobile backhaul are the three primary drivers for metro packet-optical transport. In our survey, switched Ethernet services, or E-LAN services, also scored high (3.84) and should also be included as a significant driver, based on survey results. IP/MPLS is a serious contender for metro network architectures of the future. Based on the results, we cannot deny that IP/MPLS is set to play a major role in metro transport architectures in the future. The definition of transport has broadened beyond OSI Layers 0 (WDM) and 1 (Sonet/SDH and OTN). As a result, carrier "transport" capex will increasingly be spent throughout Layers 0-3. Equipment suppliers with little expertise in IP/MPLS must adjust to this reality – either by building IP/MPLS products of their own or by conceding a sizeable portion of the metro packet- optical market to IP/MPLS competitors. Operators globally most associate Ciena with metro packet-optical innovation and leader- ship, followed by Cisco, Alcatel-Lucent and Huawei. Among North American operators in particular, Ciena's leadership perception is extremely strong. In Europe, Cisco led the voting, followed by a three-way tie for second among Alcatel-Lucent, Ciena and Huawei. Asia/Pacific voting was led by Cisco and Huawei, followed by Alcatel-Lucent. In the rest of the world, Ciena and Huawei tied for first, followed by a two-way tie between Cisco and Alcatel-Lucent. Notably absent from the top rankings (even in North America) was Fujitsu, whose Flashwave 9500 system is the worldwide (and North American) metro P-OTS leader based on revenue. © HEAVY READING | VOL. 11, NO. 3, MARCH 2013 | METRO PACKET-OPTICAL TRANSPORT 2.0 3 Survey Analysis Heavy Reading's Fall 2012 Metro Packet-Optical Transport Survey is organized in five subsections: Drivers and Applications; Features and Functions; Adoption Timelines; Packet- Optical Control Plane; and Vendor Leadership. This special report focuses on survey results related to vendor leadership. We make one important note on scope and definitions before delving into the results and findings. While Heavy Reading has a specific definition for metro packet-optical transport systems (P- OTS), we did not provide a packet-optical transport definition to operator respondents or restrict them to any specific definition in responding to their questions. As a result, the survey reflects a broader scope than metro P-OTS as covered in Heavy Reading's Packet-Enabled Optical Networking Quarterly Market Tracker. Specifically, some operators view carrier Ethernet switch/routers (CESRs) and multiservice edge/Ethernet Service Edge (MSE/ESE) platforms as packet-optical transport, and some responses reflect these views. As optical transport-centric products add more packet functionality and as packet-centric products add more optical transport functionality (such as integrated DWDM optics) the lines between previously distinct categories of products blur. This blurring is beginning to happen in packet- optical transport and is reflected, to a degree, in our survey results. Heavy Reading's metro P-OTS and CESR definitions are as follows: P-OTS These products converge DWDM transport, Sonet/SDH, large-scale packet switching and connection-oriented Ethernet in a single chassis/device. Heavy Reading has created detailed definitions for metro core/regional, edge/aggregation, access and core/backbone P-OTS. P-OTS is alternatively referred to as packet-optical networking platform (P-ONP) or packet-optical transport platform (P-OTP). CESR CESRs are platforms that meet two basic criteria: (1) they offer a comprehensive, or nearly comprehensive, set of carrier-grade features required to support high-performance enterprise Ethernet services, triple-play services and/or mobile-backhaul applications; and (2) their primary purpose is to aggregate and/or transport Ethernet traffic. This category includes all carrier-class Ethernet switches, some carrier Ethernet transport switches and some products described as carrier Ethernet routers. We include certain Ethernet transport switches in our CESR category if they have a packet-based fabric, provide multiple QoS options, offer full support of MEF-defined services, include Ethernet OAM features, aren't based on a DWDM/ROADM platform and lack full Sonet/SDH ADM features (e.g., UPSR/BLSR functionality).
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