2018 Cloud and Colo Optical Equipment Spending Will Exceed $1.4 Billion

Incumbent operator spending in Asia remains strong and now represents 35% of all optical hardware spending worldwide according to the 3Q18 Optical Markets Report

BOSTON – January 8, 2019 – Record spending in the cloud & colo market continued in the third quarter and it is now forecast to top $1.4 billion worldwide for the year 2018. This represents almost a 50% spending increase over 2017, according to the most recent Optical Customer Markets Report issued by networking equipment and component market research firm Cignal AI. With double-digit year-over-year growth in North America and EMEA and triple-digit growth in APAC in the third quarter, cloud & colo operators continue to be the fastest growing market in optical networking.

“The slowdown in cloud & colo spending during 2017 ended with a return to record growth in 2018,” said Scott Wilkinson, Lead Analyst for Optical Hardware at Cignal AI. “While incumbent operator spending is still dominant, especially in Asia, cloud & colo spending growth is becoming more influential on the market.”

Cignal AI’s Optical Customer Markets Report is issued quarterly and quantifies optical equipment sales to five key customer markets – incumbent, wholesale, cable MSO, cloud and colo, and enterprise and government. The current report includes results through 3Q18 including detailed equipment vendor market share for sales to cloud operators. Regional forecasts based on expected spending trends by customer market are also included.

Additional key findings in the 3Q18 Optical Customer Markets Report include:

  • Ciena led equipment vendor market share for cloud & colo with over 40% share in the third quarter and over 30% share for the last 12 months combined. Huawei and Cisco tied for second place in the third quarter followed closely by a combined Infinera/Coriant.
  • Despite incumbent spending growing at less than 2% year over year worldwide, incumbent spending in APAC grew 10% and represented over 35% of the total optical market in the third quarter.
  • Incumbent spending growth in APAC is expected to decelerate in 2019 as double-digit growth cannot continue indefinitely for such a large market. Incumbent spending in North America is expected to continue to decline as capital spending is focused on mobility and switched backhaul deployments.
  • Cable MSO optical spending continued to grow at a moderate pace into the third quarter, led by double-digit growth in North America to support fiber deep architectures.

About the Optical Customer Markets Report

The Cignal AI Optical Customer Markets Report tracks optical equipment spending by end customer market type and provides forecasts based on expected spending trends by customer market on a regional basis. Deliverables include Excel file with complete data set, PowerPoint summary and Optical Equipment Active Insight.

The report includes revenue-based market size for all end customer markets across all regions, with market share for the cloud and colo segment broken out on a worldwide basis. Vendors examined include Adtran, ADVA, Ciena, Cisco, Coriant, ECI, Ekinops, Fiberhome, Fujitsu Networks, Huawei, Infinera, Juniper Networks, NEC, Nokia, Padtec, TE Conn, Tejas, Xtera and ZTE.

Full report details, as well as other articles and presentations, are available at the Cignal AI website: www.cignal.ai

About Cignal AI

Cignal AI provides active and insightful market research for the networking component and equipment market and the market’s end customers. Our work blends expertise from a variety of disciplines to create a uniquely informed perspective on the evolution of networking communications.

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