1Q18 Optical Customer Markets Report

Cignal AI has issued the 1Q18 Optical Customer Markets Report. Similar to the recent Optical Applications release, this report will now be updated quarterly; previously the report was published every six months.

Updates include:

  • Added optical sales during 1Q18 to the five tracked customer verticals, allowing clients to see total purchases of optical equipment by customer market.
  • Updated 1Q18 market share for vendor sales to cloud and colo which benchmarks the magnitude of business each company does with operators in this sector.
  • Adjustments and changes to the Excel and PowerPoint files to reflect the new quarterly release cycle.

The Optical Customer Markets Report examines the following:

  • Optical shipments to five end customer types across four global regions
  • Tracks shipments to Incumbent, Wholesale, Cloud & Colo, Cable MSO & Broadband, Enterprise & Government customers
  • Detailed vendor market share for equipment sales to Cloud and Colo customers
  • Forecasts by region and customer type

Subscribers can download the latest Excel and PowerPoint files.

Report Details Excel PowerPoint

Cignal AI Increases 100G Forecast as Low-Cost Pluggable Module Demand Expected to Soar in 2021

Optical Applications Report Provides In-Depth Analysis of Coherent Port Shipments by Speed

BOSTON (July 10, 2018) – Networking component and equipment market research firm Cignal AI has increased its coherent 100G market forecast for 2021 and 2022. The recently released 1Q18 Optical Applications Report noted that the uptick results from vigorous demand for low-cost 100G pluggable coherent modules as operators seek an affordable upgrade path for 10G WDM in the metro network edge.

New applications, such as 5G fronthaul/backhaul and Cable remote PHY will catalyze this demand. Also, compact modular equipment will account for half of all metro WDM spending in North America by 2021. The report underscores the importance of this product category as an enabler for network operators to implement more flexible, disaggregated network architectures.

1Q18 Optical Applications Report Press Release

New in the Optical Applications Report is a deeper analysis of coherent port shipments, with a detailed break out of equipment vendor market share by speed (100G, 200G and 400G). This follows recent enhancements to the forecasts for these speeds, including projected 400G ZR shipments.

“Starting this year, 400G speeds will be the primary source of growth in the optical equipment market,” said Andrew Schmitt, lead analyst for Cignal AI. “However, there will be a significant turning point in 2021/2022, when new, low-cost 100G pluggables open up markets for coherent technology at the edge of the network.”

These findings, and more, are detailed in Cignal AI’s Optical Applications Report, which is released quarterly. The latest edition updates market share for the first quarter of 2018 and provides forecasts in three key markets: 100G+ coherent WDM port shipments, compact modular equipment and advanced packet-OTN switching hardware.

Other key findings in the 1Q18 report include:

  • Compact Modular Hardware Forecast Rises – Initially used by cloud vendors such as Google, Microsoft and Amazon, compact modular hardware is increasingly being adopted outside of that sector. Cignal AI raised this forecast in the past, but accelerating demand, even by traditional operators like NTT, has required yet another recasting of this segment.
  • Ciena and Cisco Lead Market – Ciena emerged as the leader in the compact modular segment for the first time in 1Q18, and is expected to remain at the top because of its strong position in 400G. Cisco was the leader in 200G coherent shipments for 2017.
  • Reduced 400G ZR Forecast – The forecast for 400G ZR modules in 2020-2021 was slightly reduced because the product’s performance will limit adoption outside of the three large cloud vendors during the first two years of availability.
  • North America Packet-OTN Losing Share – Cignal AI cut long-term forecasts for packet-OTN switching in North America, while increasing it in EMEA. The incumbent operator market vertical in EMEA continues to adopt these systems. However, interest in North America is scarce, as evident in the lack of design wins in the region for newer advanced systems, such as Cisco’s NCS4000, Nokia’s PSS-24x and Coriant’s mTera.

About the Optical Applications Report

The Cignal AI Optical Applications Report includes market share and forecasts for revenue and port shipments for optical equipment designed to meet the needs of specific applications: 100G+ coherent, and compact modular and advanced packet-OTN switching hardware. Deliverables include Excel file with complete data set, PowerPoint summary and Optical Equipment Active Insight.

The report features revenue-based market size and share for the hardware categories, and detailed port-based market size and vendor market share for 100G+ shipments. Vendors examined include Acacia, Adtran, ADVA, Ciena, Cisco, Coriant, Cyan, ECI, Ekinops, Fiberhome, Fujitsu, Huawei, Infinera, Inphi, Juniper Networks, NEC, Nokia, NTT Electronics (NEL), Padtec, TE Conn, Transmode, Xtera and ZTE.

Full report details are available, and active clients who register an account can download articles and presentations.

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

Contact Us/Purchase Report
Sales: +1 617-603-0750
Web: Contact us

Packet Pushers Hosts Cignal AI

Andrew Schmitt was invited by Packet Pushers and Scott Wilkinson of ECI to participate in one of its weekly podcasts. While not well known in the service provider world, it is popular among the network engineers of small to large Enterprises. Each podcast has about 10,000 downloads per episode.

This episode covered topics of interest to enterprise networking engineers: silicon photonics, data center interconnect (DCI) and enterprises using dark fiber to directly connect sites. It also examines the open optical movement being driven by the Facebook-backed Telecom Infrastructure Project as well as the practice of buying and deploying unbranded optics for use in OEM equipment.

You can listen to the podcast embedded below or at the Packet Pushers site where there are also some show notes.

A full transcript of the show is also available below.

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1Q18 Optical Applications Report

Cignal AI’s 1Q18 Optical Hardware Applications Report has been issued. Its arrival marks the first quarterly release of this report, which will now be standard practice; previously the report was published every six months.

The new report has significant updates and enhancements:

  • Added 200G and 400G+ vendor market share, allowing clients to see total port shipments by vendor along with details by port speed.
  • Added 1Q18 market share results for Compact Modular and Advanced Packet-OTN Switching equipment hardware as well as 1Q18 100G+ port shipments.
  • Adjusted Compact Modular and Packet-OTN forecasts. There have been some shifts in how both of these markets will develop.

The 1Q18 Optical Applications Report examines the following:

  • Compact Modular hardware market share and forecasts
  • 100G, 200G, 400G coherent port shipments & vendor market share
  • 100G, 200G, and 400G+ coherent, 400G ZR and direct detect port forecasts
  • Advanced Packet-OTN Switching market share and forecasts

Current Optical Applications Report subscribers can download updated Excel and PowerPoint files.

Report Details Excel PowerPoint

 

Further detail on the changes and updates to Cignal AI’s Optical Applications Report are below:

Requires subscription.

1Q18 Optical Hardware Report

This report finalizes our full optical equipment market share analysis and has updated forecasts for the industry through 2022. It is released once results for the current quarter (1Q18) are complete, as tabulated in our Optical Hardware Tracker.

Subscribers to the Optical Hardware Report can download an excel file with actual results through 1Q18 along with detailed, up-to-date forecasts. A complete .pdf document of this report is also available.

 

Detailed analysis of the market and its participants during 1Q18 follows.

Requires Optical Hardware subscription.

Optical Hardware Spending Grows in Europe, Asia Pacific in 1Q18, While North America Falls Flat

Cignal AI Enhances Quarterly Optical Hardware Reports with New Market Tracker Offering Real-Time Visibility into Individual Vendor Results

BOSTON (May 24, 2018) – According to research firm Cignal AI, first quarter 2018 growth in optical hardware sales centered in the Asia Pacific region and was fueled by additional increases in spending outside of China. Sales in the EMEA region also grew YoY, and larger equipment vendors express optimism about incumbent operators future spending. Cignal AI’s report also illustrates an ongoing a spending decline in the North American market, which has proved weaker than expected.

Optical Hardware Revenue by Region (1Q18)

“The massive spending in China during 2017 has slackened during 1Q18, resulting in flat year-over-year growth. A precise determination of results for the region is complicated by the ongoing ZTE export ban and ZTE’s communication blackout,” said Andrew Schmitt, lead analyst for Cignal AI. “Meanwhile, North America continues to be weaker than expected in an aggressive pricing environment.”

Cignal AI’s Optical Hardware Report is issued each quarter and examines optical equipment revenue across all regions and equipment types. Shipment information and guidance from individual equipment companies are included, and forecasts are based on spending trends in each region and the equipment types within those regions.

Key Findings In 1Q18 Optical Hardware Report:

  • RoAPAC exceeds forecasts, while Chinese market softens. Optical hardware spending in China was flat year-over-year. Cignal AI estimates ZTE experienced a soft quarter even before the impact of the export ban. Outside of China, the RoAPAC continued to grow, with Huawei, Nokia, and Coriant as primary beneficiaries.
  • North American optical hardware spending remains weak. North American spending declined by nearly double digits YoY in the first quarter. Cignal AI expected the region to rebound in 2018 with the return of stabilized pricing. But aggressive pricing continues and may impact total spending levels for the entire year. Infinera was a bright spot in the North American market as sales of its new ICE4-based products helped lead a revenue turnaround for the company.
  • Optimism abounds in EMEA. Vendors are optimistic about ongoing spending trends in the EMEA region, particularly among the large incumbents. This bodes well for Nokia and Ciena; two companies well-positioned to take advantage of new market opportunities.

Real-Time Optical Hardware Tracker Now Available from Cignal AI

Cignal AI launched its new and unique Optical Hardware Market Share Tracker. The tracker provides real-time visibility on individual vendors’ ongoing results as soon as they are reported. This insightful tool gives Cignal AI clients the freshest, most up to date market data possible to enable well-informed market analysis.

About the Optical Hardware Report

The Cignal AI Optical Hardware Report includes market share and forecasts for optical transport hardware used in optical networks worldwide. Analysis includes an Excel database and PowerPoint summaries, plus Cignal AI’s real-time news briefs on current market events, Active Insight. The Hardware Report examines revenue for metro WDM, long-haul WDM and submarine (SLTE) equipment in six global regions and includes detailed port shipments by speed. Vendors in the report include Adtran, ADVA, Ciena, Cisco, Coriant, Cyan, ECI, Ekinops, Fiberhome, Fujitsu, Huawei, Infinera, Juniper Networks, Mitsubishi Electric, MRV, NEC, Nokia, Padtec, TE Conn, Transmode, Xtera and ZTE.

Full report details, as well as articles and presentations, are available to users who register for a free account on the Cignal AI website.

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.

Contact Us/Purchase Report

Sales: [email protected]
Web: Contact us
Link to Release

1Q18 Optical Hardware Tracker

The Cignal AI 1st quarter 2018 (1Q18) Optical Hardware market share tracker is active. This tracker allows clients to download a real-time view of industry results as companies report results. Updates are made continuously and are reflected in the tracking table below.

Results for the quarter are complete.
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Ciena – Why the Secret Behind Strong Early Adoption of 400G Technology is … 200G

Ciena references data from the most recent 4Q18 Optical Application report in a blog post that outlines its opinions on how 400G is being deployed.

This month Cignal Ai updated its growth forecast for the coherent 400G DWDM market and provided the interesting graph below which shows how 400G will start to replace 100G and 200G deployments moving forward. The positive outlook represented in the graph is based on expected strong performance of 400G+ equipment across all distances and the expectation that the use of 400G ZR will expand to applications beyond data center interconnect (DCI).

The report also states that significant 400G growth will not begin until 2019, as Ciena is the only production supplier of this technology in 2018.

Acacia 1Q18 Conference Call

Acacia mentioned data from our Optical Applications report during its calendar first quarter conference call with investors on May 3, 2018. The company referenced our extensive work following the development of the coherent 400G ZR market.

We also believe that we will be well positioned in 2019 and beyond to further diversify our revenue base with our 400ZR module which is targeted at the edge DCI market. Analyst projections for this high growth segment show annual demand for 400ZR modules of more than 100,000 units by 2022. We believe these DCI opportunities support our prioritization of this market as a key strategic initiative.

The metro market is still in the early phase of 100G and 200G buildouts. Industry analyst Cignal AI forecasts a compound annual growth rate of 42% for metro network 100G port equivalents from 2017 to 2022.

Full transcript is available at Seeking Alpha.

4Q17 Optical Customer Markets Report

The 4Q17 edition of the Optical Customer Markets report has been released. It provides insight into how much optical equipment different network operators purchase:

  • Covers 4 global regions and five end customer types with quarterly granularity
  • Tracks shipments to Incumbent, Wholesale, Cloud & Colo, Cable MSO & Broadband, Enterprise & Government customers
  • Forecasts by region and customer type
  • Includes detailed vendor market share for equipment sales to Cloud and Colo customers
  • Follows strict methodology to reduce analyst subjectivity

Notable updates include:

  • Updated results by customer market for all of 2017
  • Vendor market share of equipment sales to Cloud and Colo customers for all four quarters of 2017
  • Updated PowerPoint report summary
  • Report updates are now quarterly

Subscribers can download the latest Excel and PowerPoint files.

Report Details Excel PowerPoint

Impact of US Technology Ban on ZTE

On April 16, the United States Department of Commerce announced that ZTE would no longer be allowed to import American technology products. This order represents a reinstatement of a previous order first issued in March 2016 and creates many issues for ZTE, its customers, and suppliers.

While there is no shortage of media coverage of the ban, Cignal AI aims to provide you with unique insight. We have assembled our observations and conclusions on this remarkable event, and we share answers to some common questions we’ve received as it has transpired.

Requires Optical Active Insight subscription.

Cignal AI Increases 400G Forecast, Citing Flexibility of Technology and Expanding Applications

Compact Modular Optical Hardware Outpaces Projections as Adoption Extends Outside Cloud and Colo Customers

BOSTON (April 17, 2018) –Networking component and equipment market research firm Cignal AI has updated its growth forecast for the coherent 400G WDM market. The optimistic outlook is supported by expanding applications for pluggable 400G ZR, as well as the improved performance of 400G+ equipment across all distances.

These conclusions are captured in Cignal AI’s most recent Optical Applications Report, which includes full 2017 port shipment results and market share for all equipment vendors. The report also offers insight into projected growth in the compact modular hardware segment, which enables disaggregated hardware optical network deployment models.

“Coherent 400G will cap the growth of existing 200G and 100G technologies by 2020 as new equipment becomes available that maximizes optical capacity independent of reach,” said Andrew Schmitt, lead analyst for Cignal AI. “Compact modular equipment is the enabling platform, with revenue almost quadrupling in 2017, and we expect that it will continue to grow at least 40 percent per year through 2022.”

The Optical Applications Report is issued quarterly, and the most recent report updates market share for 2017 and provides forecasts in three key markets: 100G+ coherent WDM, compact modular equipment, and advanced packet-OTN switching hardware.

Key report findings include:

100G+ Coherent WDM

  • Shipments of 100G+ coherent ports grew rapidly in Western markets, increasing more than 50 percent for 2017 and outpacing growth in China for the first time.
  • Despite the increased port shipments, a challenging pricing environment kept revenue growth flat.
  • Coherent 200G now accounts for more than 10 percent of the market, with shipments led by Ciena and Nokia.
  • 2018 will usher in more market stability with less disruption by new companies and technology. A better pricing environment and improved financial results are expected as a result.
  • Significant 400G growth will not begin until 2019, as Ciena is the only production supplier of this technology in 2018.

Compact Modular Equipment

  • 2017 revenue for this segment quadrupled as cloud and colo vendors migrated their hardware architectures to the new form factor.
  • Ciena and Cisco were the beneficiaries of this growth because of their state-of-the-art systems. These two vendors along with Infinera accounted for most shipments during 2017.
  • Hardware disaggregation is driving interest in this category, as operators begin to embrace this model to gain greater supply chain flexibility. Cable MSOs, wholesalers and incumbents such as AT&T are showing interest in compact modular equipment to build disaggregated networks.
  • The compact modular market continues to climb an upward trajectory, with products increasingly adopted by a wide range of operators. Cignal AI expects the market to expand rapidly as carriers outside of the cloud vertical utilize this equipment, creating multiple market entry points for a variety of vendors.

Advanced Packet-OTN Switching

  • Large incumbent operators continue deployments of these systems. Despite the complexity, advanced packet-OTN switching remains the best approach for unifying multiple legacy networks and applications onto a single transport infrastructure.
  • This market grew 35 percent in 2017 with strong shipments in China and EMEA, which primarily benefited Huawei and Nokia.

About the Optical Applications Report

The report includes market share and forecasts for revenue and port shipments for optical equipment designed to meet the needs of specific applications: 100G+ coherent, compact modular and advanced packet-OTN switching hardware. Deliverables include an Excel file with complete data set, PowerPoint summary and Optical Equipment Active Insight.

The report features revenue-based market size and share the hardware categories, and detailed port-based market size and vendor market share for 100G+ shipments. Vendors examined include: Acacia, Adtran, ADVA, Ciena, Cisco, Coriant, Cyan, ECI, Ekinops, Fiberhome, Fujitsu, Huawei, Inphi, Infinera, Juniper Networks, NEC, Nokia, NTT Electronics (NEL), Padtec, TE Conn, Transmode, Xtera and ZTE.

Full report details, as well as articles and presentations, are available to users who register for a free account on the Cignal AI website.

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.

Contact Us/Purchase Report
Sales: [email protected]
Web: Contact us
Link to Release

4Q17 Optical Applications Report

The 4Q17 edition of the Optical Hardware Applications report has been released. The report contains details on the following areas:

  • Compact Modular hardware market share and forecasts
  • 100G+ coherent port shipments & vendor market share
  • 100G, 200G, and 400G+ coherent, 400G ZR and direct detect port shipments and forecast
  • Advanced Packet-OTN Switching market share and forecasts

This release has significant updates and enhancements:

  • Updates to the 400G port shipment methodology, simplifying the categorization of ports. Physical port shipments are no longer defined by reach. All 100G, 200G, and 400G+ coherent port shipments are counted, as well as direct detect and 400G ZR for edge applications.
  • Added 3Q and 4Q17 market share results for Compact Modular and Advanced Packet-OTN Switching equipment hardware.
  • Updated coherent port shipment market share to include Inphi ColorZ historical numbers. Despite not being a coherent solution, it does displace the use of coherent 100G and its impact should be measured.
  • The Compact Modular hardware forecast was increased again. This market continues to grow at rates that outstrip the most optimistic projections.
  • Report updates are now quarterly.

Current subscribers can download Excel and PowerPoint files.

Report Details Excel PowerPoint

OFC 2018 – Operator Perspectives

Each year at OFC, we have the valuable opportunity to hear from the network operators themselves to better understand their vision for the future network. This year, there were some excellent presentations and discussions involving operators from several network verticals – Incumbents, Cable MSOs, and of course the ever-expanding cloud and colocation operators.
Requires Optical Active Insight subscription.

OFC 2018 – 400G Inside the Datacenter

When the conversation at OFC turned to short reach client optics, faster speeds were the central focus.  Several companies announced products and gave demonstrations of 400G capable technology. The 100G speeds and production ramp that had been such a hot topic at OFC 2017 had little follow-on during 2018.
Requires Optical Active Insight subscription.

OFC 2018 – Coherent Technology

Trends in coherent technology generated enthusiasm among the participants at OFC 2018, and 400G ZR applications were of particular interest. Nokia and Infinera outlined next-generation coherent roadmaps, and Acacia and NTT Electronics showcased silicon fresh back from the fab. Many component companies announced smaller, lower cost devices to enable new WDM applications. In this report, Cignal AI examines OFC 2018’s coherent technology announcements and their implications.
Requires Optical Active Insight subscription.

OFC 2018 – Compact Modular Equipment

Compact Modular Equipment took center stage at OFC 2018. News included speed upgrades to existing systems, the emergence of new switch/router variants, and open line systems designed to address the growing interest in optical hardware disaggregation.
Requires Optical Active Insight subscription.

OFC 2018 – Consolidation

Each year, there is at least one announcement at OFC which surprises the industry. In 2016, the announcement was the introduction of Inphi’s ColorZ, while in 2017 it was news of Ciena choosing to license the Wavelogic DSP to module vendors. And yet, OFC2018 delivered a surprise that exceeded both: Lumentum will acquire Oclaro.
Requires Optical Active Insight subscription.

Nokia PSE-3 Coherent Chipset

On March 6, 2018, Nokia announced its fourth generation coherent optical technology, the PSE-3, which continues the company’s strategy of developing coherent DSP processors in-house. Nokia is betting that these chips will differentiate the performance, price, and availability of its optical hardware products.

This Cignal AI report explores what makes the new PSE-3s different from off-the-shelf solutions and examines the question of whether or not vertical integration still makes sense in this market.

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Requires Optical Active Insight subscription.

Fujitsu Accelerates Path to 5G with Next-Generation Variable Optical Transport

Fujitsu announced its new 1FINITY T500 and T600 products, adding to its family of compact modular transponders and optical common equipment. The T600 is capable of 600G per wavelength coherent operation using the NTT Electronics DSP.

“As users continue to push more demanding application traffic over the network, service providers require high-performance, high-speed transport to enable greater bandwidth capacity,” said Andrew Schmitt, lead analyst at Cignal AI. “The latest 1FINITY transport technology enables faster transport speeds, design flexibility and power efficiency to meet the needs of escalating mobile, broadband and cloud network traffic.”