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Markets for the Technology

Next to the regulations, another important boundary condition is the type of market segments that the operator is willing to address.

Assuming a time scale of 5 to 10 years, and after understanding the differences between possible solutions for very-high-speed transport, we explore the different markets that this technology may have in the near future and how it fits into the existing frameworks.

A set of relevant market segments exists. These can be categorized by:

         Inter-exchange market
         Long-haul telephone companies
         IP carriers (backbone)
         Enterprise market
         Big institutions
         Regional communication providers
         Traditional telephony service (local exchange)
         High speed pipes for private business oriented networks
         High-speed access networks to support Internet access, HDTV, interactive TV, and so on.

The analysis of the sequel indicate the following market-technology mapping can take place during the course of time, as the optical technology advances to be mature and the bandwidth demand growth increases:

         Inter-exchange market
         SDH TDM
         SDH TDM with SDM (space division multiplexing)
         SDH TDM with WDM links
         All-optical networks (dynamic or static wavelength routing networks)
         OTDM or MC-OTDM
         OCDMA or MC-OCDMA
         Enterprise market
         SDH TDM
         SDH TDM with SDM or WDM links
         All-optical networks with electrical switches (STM,ATM, IP, etc)
         Regional communication providers
         SDH TDM with/without SDM/WDM links
         All-optical networks with electrical switches (STM, ATM, IP switches)
         PONs (and their derivatives such as SuperPONs) for high speed access to the home and SOHO

Inter-exchange Market Requirements

The key inter-exchange market requirements include:

         Long distance transmission
         High aggregate capacity at one protocol (e.g., SDH)
         Monitoring and fault localization
         Fault tolerance (survivability)
               Low cost

As mentioned earlier, long-haul telephone companies have been the most prominent sector for WDM links so far.

The reason this market is ripe for such a technology stems from the rapidly shrinking pools of free capacity in existing fibers in the ground on one hand, and from the above-mentioned very high costs of installing long distance fiber on the other. In fact, these costs are so high that they make the current WDM multiplexers seem reasonable.

Despite the requirement for WDM point-to-point solutions, this market may not need all-optical networks in the near future. The specific features offered by such networks, such as configurability and transparency, seem less attractive here, where single-hop OC-48/ STM-16 or STM-64 lightpaths are all that is necessary at this stage. In the long run, if SDH networks are to be replaced by wavelength routing networks (as may be the case for regional communication providers, see discussion below), a similar need may evolve in this market as well. So as the technology advances in optical networking, an evolutionary technology-inter-exchange market mapping produces the following roadmap for the transport network infrastructure evolution:

  • SDH TDM with SDM (space division multiplexing-multiple fibers)
  • SDH TDM with WDM links
  • All-optical networks (dynamic or static wavelength routing networks)

Enterprise Market Requirements

The enterprise market requirements include:

         Larger number of channels, each operating at lower speeds
         Transparency (since the spectrum of protocols used between sides is large, e.g., FDDI, ESCON, ETHERNET, DPT-SRP, IP, ATM)
         Monitoring and fault localization
         Low cost

The main drive for WDM links in the data communications environment has come so far from large financial institutions that wish to protect their valuable data by duplicating it at a geographically remote backup site. The need for wavelength routing networks in such applications is obvious if more than one primary and backup site exist in a large corporation.

The focus of such corporate networks is very different from that of long-haul carriers. While the latter are more interested in high aggregate capacity at one protocol (SDH), the former are more interested in having a larger number of channels, each operating at lower speeds (typically less than 1 Gb/s). Transparency is also a very important issue in this case, since the spectrum of protocols used between the sites is large (fiber distributed data interface, or FDDI, DPT-SRP, ESCON, fiber channel, ATM, and others). Monitoring and fault localization are central issues for the telcos, while enterprise networks typically have much less stringent requirements.

Another difference between these markets lies in fault tolerance. While SDH networks provide their own backup mechanisms, and thus do not need the optical layer below them to perform fault recovery (which can cause more havoc if not very carefully integrated), such fault tolerance is crucial in the data center backup case, where no such fault tolerance exists. Furthermore, since the telcos are heavily invested in legacy SDH equipment, it will be harder for them to integrate new optical layer fault tolerance into their systems.

In the long run, we expect wavelength routing networks in the data communications sector to provide a low-level, transparent, and configurable infrastructure for more specific technologies, mainly ATM and Transmission Control Protocol (TCP)/IP. Such a layered approach is not redundant, as the low-level optical layer and high-level electrical network play different roles. The main goal of the optical layer is to relieve high-layer nodes from the above-mentioned extra processing by providing high-capacity pipes of fixed bit rate that connect physically remote switching nodes. The goal of the electrical layer is to make efficient use of these pipes by statistically multiplexing lower-bandwidth bit streams with complex behavior (such as the ATM variable bit rate class) onto them. These two types of connections also operate on different time scales. While ATM virtual connections, or TCP IP connections, may have short life spans (from seconds down to milliseconds), lightpaths will typically operate on much longer time scales of hours or days, trying to adapt the network to changes in its usage pattern. Therefore, it is sufficient to have low-speed optical switching and configuration management.

Crucial factors in the penetration of optical technology into this sector are its

         technical maturity and
         future proof-ness.

Regional Communication Providers Requirements

The requirements for regional operators are similar to that of inter-exchange and enterprise markets, since regional providers:

         Create connectivity to central offices for the aggregated circuit switched telephone traffic
         Provide high-speed data channels to businesses which run diverse protocol suites
         Provide high-speed access to the home or SOHOs.

This sector may be divided into three sub sectors:

         Traditional telephony service (local exchange)
         High-speed pipes for private business-oriented networks
         High-speed access networks to support
         Internet access,
         High definition television (HDTV),
         Interactive TV,
         so on.

Regional networks combine requirements from both the long-haul providers and data processing centers. On one hand, such companies aggregate numerous telephone sources into high-bandwidth SDH rings to connect their central offices. On the other hand, they supply high-speed data channels to businesses, which need to run diverse protocol suites on top of them. In fact, while small enterprises may find the installation of a WDM link for disaster recovery purposes too expensive, economy-of-scale considerations enable regional providers to offer affordable high-bandwidth pipes to many small organizations. As is the case for the enterprise world, prices are an important issue here, because the providers will be very cautious in investing in such a non-core business.

In the short term, this sector is expected to take the same upgrade path as the long-haul carriers, replacing simple fiber links with WDM links. However, since much of the network complexity lies within the realm of regional providers, they are expected to be the first to suffer from inflating network management and maintenance burdens due to the increasing quantities of SDH equipment required to connect all these channels. Thus, in the long run regional providers will replace SDH-based networks with wavelength routing networks.

A different market which falls under this category is that of providing high-speed access to the home or SOHO. For such systems optical access networks (PONs, SuperPONs) provide an economical solution, which can integrate very well with wavelength routing networks.





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