Showing posts with label Research. Show all posts
Showing posts with label Research. Show all posts

Tuesday, June 20, 2017

LightCounting: 100G QSFP28 up 40% to >$250m in Q1

LightCounting, in its latest Quarterly Market Update Report, finds that demand for 100 Gigabit Ethernet optical connectivity from operators of mega-data centres is continuing to exceed supply, and estimates that sales of QSFP28 SR4, PSM4, CWDM4 and LR4 transceivers rose 40% in the first quarter to over $250 million.

The research firm reports that overall sales of Ethernet, SONET/SDH, CWDM/DWDM, Fibre Channel, FTTx, wireless fronthaul transceivers and active optical cables (AOCs) and embedded optical modules (EOMs) declined 5% sequentially in the first quarter, but increased 15% year on year. It forecasts that weak demand for optics in China will result in a further 3-5% decline in the sales of these products in the second quarter, with sales of tunable lasers, modulators and coherent receivers set to decline by 20% or more.

More specifically, LightCounting reports that suppliers of optical components and modules experienced a sharp fall in orders from Huawei and ZTE in March 2017, after ZTE reached a settlement with the U.S. government relating to an investigation into violations of export sanctions to Iran. It notes that the investigation, launched in 2016, could have restricted ZTE's access to optics from U.S.-based suppliers, so that the vendor may have accumulated excess inventory of such products.

While Huawei was not formally charged with such violations, the research firm believes that it may also have started to build up reserves of key components from U.S. suppliers to avoid potential disruptions. When the settlement was reached, both companies may have started to use components from their reserves and reduced purchases of new products.

LightCounting states that if this view is correct, demand for optics in China would be expected to return shortly as excess inventory is depleted. It adds that there were signs of rising demand for optical components in June, which is expected to continue in July and August.

LightCounting notes that ZTE and Huawei both reported higher sales of optical networking equipment in the first quarter and issued strong guidance for the current quarter. It also cites Chinese service providers as making ongoing investments in optical networking even as overall capex is reduced in 2017. Additionally, there are multiple new projects scheduled for the second half of the year in China.

Finally, LightCounting reports that shipments of 200 Gbit/s DWDM ports reached a new record in the first quarter, while DWDM solutions enabling 400 Gbit/s transmission on a single wavelength are an area of focus. In addition, the development of 200/400 Gigabit Ethernet transceivers is also underway.

Friday, June 16, 2017

Cisco VNI: big shifts in traffic patterns

In the first part of this article, the remarkable 26% CAGR that the latest Cisco VNI report is predicting for 2017-2021 was noted. A 26% CAGR is steep in any field let alone the already massive Internet that exists today. Perhaps the most important observation was that the growth rate is accelerating. This part will look at some of the shifting patterns for Internet traffic as seen in the study. Here are the key observations for this part of the article: (1) Traffic is moving closer to the edge; (2) regional traffic trends are uneven; (3) business continues to invest in ways to segment traffic from the public Internet and that the fastest such area of growth is SD-WAN.

Moving toward the edge

With the widespread availability of content delivery networks (CDNs) and related caching technologies, the volume of IP traffic traversing long-haul networks should be declining. Much of this traffic growth is video. In fact, the Cisco VNI study predicts that video will represent 80% of all Internet traffic by 2021, up from 67% in 2016. Globally, there will be nearly 1.9 billion Internet video users (excluding mobile-only) by 2021, up from 1.4 billion in 2016. Much of this content works well in a CDN. However, currently there are a handful of super-sized Internet content providers (ICPs) that are operating a fairly small number of hyper-scale data centres. Facebook, for instance, serves over a billion daily users, with major European data centres located near the Arctic Circle in LuleƄ, Sweden. Because Facebook feeds are customised for user, each session for European users pretty much ensures that traffic is traversing the core network and long-haul backbone. The story is pretty much the same for AWS, Google and Microsoft. However, each of these ICPs is undergoing a rapid build-out of data centres, meaning more facilities closer to users. By late 2018, Facebook should have three European data centres in operation (construction of two new Facebook data centres is underway in Clonee, Ireland and Odense, Denmark). By 2021, it is likely that Facebook could have five or six European data centres. This alone would redirect significant traffic off the long-haul network to northern Sweden and onto more regional networks.

Below are some key Cisco VNI findings:

·         End-user Internet traffic is moving closer to the edge; over one-third of traffic will bypass core by 2021.

·         Globally, 35% of Internet traffic will be carried metro-to-metro by 2021, up from 22% in 2016.

·         Globally, 23% of Internet traffic will be carried on regional backbones (without touching cross-country backbones) by 2021, compared to 20% in 2016.

·         Globally, 41% of Internet traffic will traverse cross-country backbones by 2021, compared to 58% in 2016.

The second observation is that regional differences in IP traffic growth will remain with us in 2021 and likely for more years in the future. Even though the latest mobile phone models somehow spread to cities all around the world remarkably fast, global economic development is uneven and network infrastructure reflects it. By 2021, 5G rollouts will be underway in many countries with robust economies but will come later to others. The figures gathered by the Cisco VNI, show the APAC region leading with the greatest IP traffic load by 2021, North America follows, but with a much smaller population compared to APAC, per capita bandwidth intensity remains highest in North America. The Cisco VNI figures, specifically regional IP traffic growth 2016 – 21, show:

•   APAC: 107.7 exabytes/month by 2021, 26% CAGR, 3.2-fold growth.

•   North America: 85 exabytes/month by 2021, 20% CAGR, 2.5-fold growth.

•   Western Europe: 37.4 exabytes/month 2021, 22% CAGR, 2.7-fold growth.

•   Central Europe: 17.1 exabytes/month by 2021, 22% CAGR, 2.75-fold growth.

•   Latin America: 12.9 exabytes/month by 2021, 21% CAGR, 2.6-fold growth.

•   Middle East and Africa: 15.5 exabytes/month by 2021, 42% CAGR, 5.8-fold growth.

Business IP traffic volume

The latest Cisco VNI report also predicts that global business IP traffic will grow at a CAGR of 21% from 2016 to 2021. Since this figure is based on current metrics from Cisco's service providers (as well as other sources as discussed in the study’s methodology), it is clear that networks are filling up and that they are doing so at an accelerated rate. More businesses are sending/receiving traffic to the Internet, mostly likely due to increased use of video and accessing cloud services over the public Internet. Cisco expects advanced video communications in the enterprise segment to cause business IP traffic to grow by a factor of 3 between 2016 and 2021.

The Cisco VNI report has a separate category for IP WAN, which is predicted to grow at a CAGR of 10%, compared with a CAGR of 20% for fixed business Internet and 41% for mobile business Internet. This category could include Layer 2 and VPN services. Increasing numbers of service providers are offering direct connection options for AWS and Microsoft Azure, and as the general movement of corporate data into the public clouds increases, one would expect that the traffic load on these private connections to grow substantially. However, Cisco is predicting business IP traffic in North America to grow at a CAGR of 23%, a faster pace than the global average of 21%. In volume terms, in Asia Pacific will have the largest amount of business IP traffic in 2021, at 17 EB per month, with North America second at 14 EB per month.

One area of intense activity now being tracked by Cisco VNI is global enterprise SD-WAN traffic, which is now predicted to grow at a CAGR of 44% compared to 5% for traditional WAN. Cisco predicts that SD-WAN will increase six-fold over the forecast period and represent 25% of WAN traffic by 2021. This is good news for Cisco, given that it recently agreed to acquire Viptela, a start-up specialising in SD-WAN, for $610 million in cash and assumed equity awards. Cisco's SD-WAN portfolio also includes its home-grown intelligent WAN (Iwan) solution and Meraki cloud platform.

Wednesday, June 14, 2017

Dell'Oro reports 100G port shipments up 6x YoY in Q1

According to the recent Ethernet Switch - Data Center Quarterly Report by Dell’Oro Group, 25 and 100 Gbit/s switch port shipments increased to more than one million in the first quarter of 2017, with suppliers Arista, Cisco, and white box vendors leading the transitions to higher speeds.

Highlights from Dell'Oro's latest first quarter Ethernet switch, data centre report include:

1.         That 100 Gbit/s shipments surged in the quarter, increasing six-fold year on year.

2.         Vendors Arista, Cisco and the white box suppliers each achieved revenue of more than $100 million for 100 Gbit/s in the first quarter.

3.         Shipments of 25 Gbit/s ports are ramping on the switch side, primarily driven by Cisco, as enterprise customers focus on upgrading their switches ahead of the Intel Purely server refresh cycle that is expected in the second half of the year.

Regarding the report, Sameh Boujelbene, senior director at Dell'Oro Group, commented, "As supply constraints on 100 Gbit/s optical modules started to alleviate, demand for 100 Gbit/s switches is ramping up at the major cloud providers… however, (the market) is in the early stage of this migration and I expect demand to accelerate through the rest of the year, driven by the cloud, as well as telco service providers and enterprise deployments."

Tuesday, June 13, 2017

Cisco: expansion of the IP universe is accelerating

Cisco: expansion of the IP universe is accelerating

Cisco has just published its latest Visual Networking Index, an annual report that uses network traffic data from its service provider customers to forecast usage patterns for the next four years. Cisco has been publishing these VNI reports for 12 years and over that time has attracted quite a following. The reports are often cited in the media and used by many other network operators, regulators and Internet companies for planning purposes.

The first question on everyone's mind is 'how fast is the Internet growing?' Cisco's answer for this year, along with its responses for the past few years, are as follows:

·         2017: Global IP traffic is expected to increase three-fold from 2016 – 2021, reaching an annual run rate of 3.3 zettabytes by 2021, up from 1.2 zettabytes in 2016. Busy hour Internet traffic is increasing faster than average Internet traffic, and busy hour Internet traffic will grow 4.6-fold (35% CAGR) from 2016 to 2021, reaching 4.3 Pb/s by 2021, compared to average Internet traffic that will grow 3.2-fold (26% CAGR) over the same period to reach 717 Tb/s by 2021.

·         2016: Global IP traffic to nearly triple at a CAGR of 22% over the next five years (2015-2020) as more than a billion new Internet users come online and new applications take hold.

·         2015: Global IP traffic to triple between 2014 and 2019, when it will reach a record 2 zettabytes. This equates to a CAGR of 23% and marks the first global CAGR increase in consecutive VNI forecasts in nearly a decade.

·         2014: Global IP traffic to grow three-fold from 2013 to 2018, reaching 1.6 zettabytes annually by 2018, representing a 21% CAGR over the forecast period.

·         2013: Global IP traffic to reach 1.4 zettabytes (23% CAGR from 2012 to 17).

·         2012: Global IP traffic forecast to be 1.3 zettabytes by 2016.

In short, this year's Cisco's VNI predicts a 26% CAGR for global IP traffic over the next five years, which means that growth is not just ripping along but actually accelerating. The universe is expanding quickly and accelerating. It is an important observation with implications for everyone in the network ecosystem.

Looking at these big numbers for overall Internet traffic, and knowing that video represents such a significant percentage of that 26% CAGR, one cannot help but wonder why Content Delivery Networks (CDNs) would not have mitigated more of this traffic load. Considering the load an all-day Netflix binge on a 4K monitor, if tens of millions of viewers in the same cities and neighbourhoods are engaged in similar behaviour and watching the same shows, how effective are CDNs? The Cisco VNI numbers indicate that CDN traffic is growing even faster! A 44% CAGR globally and even faster in many regions.

Cable provider IP traffic is a different category

One might also think that the 26% CAGR for public IP traffic would be partially due to the migration or planned migration of cable operators to IP delivery platforms. But that is not the case. Cisco VNI has a separate category for Managed IP video, which is defined as IP traffic generated by traditional commercial TV services. It is not considered Internet traffic because its remains within the footprint of a single service provider. Below are the numbers for that category.

Wednesday, June 7, 2017

ABI survey finds 55% plan to use telcos for connectivity only

According to the latest Industry Survey: Transformative Technology Adoption and Attitudes – Implementers' Perspective of Telco and Cloud report from ABI Research, despite telecom operators' efforts to enter new enterprise markets and create new business opportunities, the B2B technology survey indicates that technology implementers predominantly see telcos as providers of connectivity, and not value-added, vertical specific services.

The ABI survey finds that 55% of implementer respondents expect to use telcos for connectivity alone, with 31% favouring a 'connectivity+' approach, presenting an opportunity for telcos to bundle value-added, vertical-specific services with connectivity. However, only 13% of survey respondents expect telcos to create new ecosystems for IoT, data-related, IT and cloud services.

ABI noted that connectivity+ involves bundling vertical-specific services on top of connectivity, allowing telcos to leverage existing assets such as data, devices management, applications and services management, security and analytics to add value for implementers.

The research firm stated that the survey also indicate that telcos cannot, and should not, attempt to compete with web-scale companies in cloud computing services.

Specifically, ABI finds that only 4% of implementers surveyed intend to utilise telcos for cloud computing services currently, and projects that this will decline to 1% over the next five years. However, the survey shows that 12% of respondents are currently using hybrid cloud, and forecasts that this will increase to 38% in the next five years as the industry recognises the growing importance of using more than private and public cloud services on a standalone basis.

Commenting on the survey, Dimitris Mavrakis, research director at ABI Research, said, "Verizon has done well to offload its cloud businesses and other Tier 1 telcos will follow… competing with web-scale companies in their own field is impossible for telcos… implementer requirements and telco strategies seem to be disparate for the moment, for example, telcos are focusing on the automotive vertical, but the survey indicates that the retail, government and logistics markets are very interested in telco services".

Tuesday, May 23, 2017

Crehan: Early 25GbE Adoption Faster than 10GbE

The adoption of 25GbE gigabit Ethernet (GbE) is off to a much stronger start than either 10GbE or 40GbE, according to a new Server-Class Adapter & LAN on-Motherboard (LOM) Report from Crehan Research Inc.

In fact, 25GbE shipments have handily surpassed two hundred thousand ports in just a little over a year, a milestone that took 10GbE about six years to reach and 40GbE about four – see accompanying figure. Moreover, each of these successive Ethernet networking technologies has ramped faster than its predecessor in response to changing data center networking traffic demands.

“The ramp of 25GbE shipments is off to a stellar start, driven by compelling pricing and rapid, broad ecosystem alignment, as well as new data center application bandwidth requirements," said Seamus Crehan, president of Crehan Research. “Looking at the broader high-speed networking adoption arcs, we are seeing an acceleration in adoption as customers move to stay ahead of numerous network traffic demands including big data and related analytics, a rapidly growing and changing mobile internet, Network Function Virtualization (NFV), machine learning, and augmented and virtual reality."

Crehan’s report also notes that in conjunction with the stellar performance of 25GbE, both 50GbE and 100GbE are also seeing rapid growth, with each already exceeding an annualized shipment run-rate of over one hundred thousand ports. “The simultaneous strong initial ramp in three new higher-speed Ethernet networking technologies suggests that we may be at an inflection point in data center networking bandwidth demand," Crehan said. "Furthermore, it reflects additional segmentation of the Ethernet market as this market shifts away from the one-size-fits-all deployment model that used to dominate.”

Wednesday, May 17, 2017

LightCounting expects Ethernet transceivers to drive silicon photonics market

LightCounting, in a research note on the silicon photonics (SiP) market, has reiterated its forecast for the product segment based on updated projections for sales of Ethernet and DWDM transceivers, specifically finding that while the share of SiP products in the total market has not changed significantly the product mix has, and noting that the success of SiP will be more dependent on Ethernet transceivers and less on DWDM modules.

LightCounting notes that projection for sales of active optical cables (AOCs) and embedded optical modules (EOMs) have not changed since its AOC-EOM report of December 2016, with demand for AOCs in early 2017 consistent with forecasts, although stating that the EOM market was very slow in the first quarter. However, it expects Intel to start shipping SiP-based EOMs in 2018 to support its latest supercomputer project.

The research firm notes that EOMs and co-packaged optics/ASICs were key topics at OFC 2017. In particular, supporting its long term forecast for SiP-based EOMs LightCounting cites Ayar Labs, which announced its first product - SiP-based EOMs – designed to sit adjacent to complex ASICs to enable connectivity with network interface cards. The first chip is designed to support 3.2 Tbit/s of capacity. Such SiP-based solutions are able to operate at the high temperatures required for EOM applications.

In terms of optical transceiver technology, LightCounting reports that in 2016 the market of over $6 billion was largely made up of InP devices, split roughly equally between discrete and integrated InP products and accounting for around $4.5 billion of the total. The SiP market segment accounted for around $500 million, with the remainder accounted for by integrated and discrete GaAs devices.

In 2017, the SiP-based optical transceiver market is forecast to rise to around $700 million, in a total market of approximately $7 billion, growing to just over $1 billion in 2019 and around $2.2 billion by 2022, when the total optical transceiver market will reach around $11.5 billion.

LightCounting observes that while SiP technology has been proven in terms of technical performance, it remains to be seen whether it can help the optical components industry move towards sustainable profitability.

The research firm notes that in this context the performance of Acacia has been encouraging, although the company's products are neither high volume nor low cost. In addition Luxtera, whilst a privately held company, is believed to have had a good 2016 and likely gaining share in the PSM4 segment based on the first quarter earnings report of Applied Optoelectronics.

Friday, May 12, 2017

ABI forecasts NFV market to reach $38bn by 2022

According to ABI Research's latest Network Functions Virtualization Tracker and Forecasts report, after a slower start than initially anticipated, the network function virtualisation (NFV) market is set to experience moderate growth based on continuing NFV investments by major telcos.

ABI Research forecasts that North America will be the largest market, accumulating $13 billion in NFV-related investments during 2022, while Europe will see the highest growth rate with an estimated 53% CAGR between 2017 and 2022. The research firm notes that early adopters claim benefits offered by NFV-enabled systems including reductions in network capex and opex, service agility and faster deployment of new network elements.

ABI forecasts that overall NFV market revenue will reach $38 billion in 2022, although hardware expenditure, including servers, storage devices and switches, is expected to decline over time, while software and services segment spending is forecast to experience growth rates of 55% and 50%, respectively.

ABI notes that although the NFV market is evolving and technical expertise is starting to mature, the standardisation and multi-vendor involvement challenges will remain over the next two years. It adds that software and services vendors will have the opportunity to identify NFV use-cases for enterprise verticals and leverage these to deliver end-to-end integrated systems.

In terms of suppliers, ABI believes that the established vendors, including Ericsson, Huawei and Nokia, plus specialists such as Amdocs and Netcracker, will see early success, with systems integration becoming ever more important. It also notes that vendors are investing in open source software, which may increase business opportunities initially but could create difficulties in the future, particularly if telco interest in specific open source projects wanes.

ABI notes that currently, NFV is primarily seen as a means of reducing costs, but that new revenue opportunities will require a wider transformation which is likely to be driven by 5G after 2020.

Commenting on the report, Neha Pachade, senior analyst at ABI Research, said:

-           "In 2015 and 2016 the market experienced some early successes, but mostly reconsiderations and failures with NFV… early adopters conducted proof of concept testing and NFV-integrated system demonstrations to understand the impact of NFV in the technical, operational and cultural domains".

-           "Forecasts indicate that NFV will become a sizeable opportunity for vendors, although it is not yet clear whether it will cannibalise existing hardware-based product lines or create new market use cases".

Friday, May 5, 2017

IDC reports China smarphone sales up 1%

According to market research firm IDC in its latest Quarterly Mobile Phone Tracker, 104.1 million smartphones were shipped to China in the first quarter of 2017, up 1% year on year, with the low growth in part due to the high inventory levels from the previous quarter.

IDC notes that the first quarter was also relatively quiet in terms of new products, with few launches aside from Huawei's new P10, P10 Plus and Honor V9, which combined with strong momentum for its Honor brand meant that Huawei reclaimed the top position by market share from OPPO.

The research firm finds that the top five smartphone companies have a dominant 70% share of the market, and predicts that this overall share will continue to increase, together with consolidation amongst the smaller companies, during the year. IDC does not expect any new smartphone companies to have a significant effect on the Chinese market.

In terms of vendor market share, for the first quarter IDC reports that Huawei led the China market with unit sales of 20.8 million and a share of 20.0%, up from 16.8% in the prior fourth quarter. OPPO was the second ranked supplier with sales of 18.9 million units and a share of 18.2%, up from 18.1% in the fourth quarter. The third placed vendor was vivo, with sales of 14.6 million units and a 14.1% share, down from 16.0% in the prior quarter.

The fifth ranked vendor was Apple with sales of 9.6 million units and a share of 9.2%, versus 11.0% in the fourth quarter, and Xiaomi was sixth with sales of 9.3 million units and a market share of 9.0%, compared with 7.4% in the prior quarter.

IDC notes that Android ASPs (average selling price) continued to increase, both sequentially and year on year, mainly due to the top Chinese smartphone companies Huawei, OPPO and vivo increasing their ASPs as consumers purchase flagship models. In addition, these key flagship models from Chinese suppliers offer upgraded specifications leading to higher prices. IDC cites Huawei's Honor 8, the OPPO R9s and vivo X9 as the most popular models from these companies in the quarter.

Commenting on the data, Tay Xiaohan, senior market analyst with the IDC Asia Pacific client devices team, said, "Despite a soft first quarter in China, the second quarter should pick up sequentially given not only's June promotions, but also activity around a number of new products such as vivo with its Y53, Xiaomi with its Mi 6, Meizu with its E2 and Gionee with its M6S Plus".

Tuesday, May 2, 2017

LightCounting reports record optical networking market in '16

Market research firm LightCounting finds in its latest Optical Communications Market Forecast report that while demand for optical networking equipment, modules and components attained record levels in 2016, the market was weak in the first quarter of 2017.

LightCounting reports that Huawei led the market in terms of growth in 2016, but significantly reduced purchases of optics in the first quarter of 2017 and forecasts that this weakness is likely to continue in the current quarter. However, the research firm believes that this a temporary slowdown in the optical market.

Looking at data for overall capex of the Top 15 service providers globally, LightCounting notes a sharp decline in Asia in 2016 due to lower spending by the big three Chinese operators, while spending in the U.S. and Europe remained stable versus 2015. Even so, 2016 was a record year for optical communications equipment revenue, which typically accounts for around 10% of service provider capex.


China Mobile was the largest consumer of optics in 2016 and added 30 million FTTH subscribers and deployed more than 50,000 ports of 100 Gbit/s DWDM optics into its core network. In addition, upgrades of China Mobile's metro and metro access networks drove demand for 10 Gbit/s optical components and modules. LightCounting notes that while some upgrade projects were completed in 2016, many are ongoing.

The research firm also cites a presentation by China Mobile at OFC 2017, in which the operator said that traffic growth rates in its network rose from 46% in 2013-14 to 88% in 2015-16, compared with a growth global rate of around 30%. Therefore, China Mobile, along with China Telecom and China Unicom, are expected to continue their high levels of spending to address above average traffic growth. LightCounting states that the capex-to-revenue ratio for Chinese service providers is around 25%, compared to 15% for all other operators.

LightCounting estimates that deployments of 100 Gbit/s DWDM ports in China in 2016 translate to a 70% increase in network bandwidth, and predicts that Chinese service providers will increase bandwidth in DWDM networks by a further 40% in 2017. However, it believes that deployments will increase in 2018 to keep pace with traffic growth.

Cloud DCI

Regarding DWDM deployments in the cloud/data centre interconnect (DCI) and enterprise segments, LightCounting observes that while this is a relatively small market in terms of total bandwidth, it is growing much faster that the service provider segment. As a result, bandwidth demand from cloud companies connecting data centres is expected to be very high in 2017.

LightCounting notes that Amazon and Facebook report that traffic inside their data centres is increasing by 100% annually. While growth in traffic between data centres is expected to be slower, based on the rate of construction of new data centres the research firm predicts 100% bandwidth growth for DCI traffic 2017. This increase in DWDM bandwidth demand for cloud DCI is expected to compensate for lower demand in China.

Wednesday, April 19, 2017

ABI: Cloud Deployments to take off after 2020, driven by roll-out of 5G

ABI Research predicts in its Telco Cloud Framework and Deployment Roadmaps study that large-scale telco cloud deployments will attain critical mass after 2020, in parallel with the deployment for 5G networks.

ABI expects that the fifth network generation will require a new core network to support advanced concepts such as network slicing and services geared towards a variety of business verticals. However, the research firm believes that early 5G deployments will focus on delivering enhanced mobile broadband, which will mean there will be no immediate requirement for a new telco core network.

ABI notes that AT&T, Deutsche Telekom, Telefonica and Verizon are currently refining their strategies for 5G and planning their networks as shared platforms, rather than a mix of individual network appliances. As a result, network resources will be virtualised, distributed and software controlled with the aim of creating a far more agile network. In turn, this model will allow the implementation of what it terms an 'untelco' strategy, involving the sale of tailored network resources to different verticals.

However, ABI finds there are signs that the deployment of end-to-end systems remains the end goal for operators. For example, Telefonica O2 UK has awarded Nokia an end-to-end contract for a cloud-native packet core. It notes that implementing a true vendor-agnostic, common-off-the-shelf (COTS)-based network in-house would present the operator with a considerable challenge. ABI anticipates the award of many more end-to-end telco cloud vendor contracts in the future.

Commenting on the report, Dimitris Mavrakis, research director at ABI Research, said:

-           "Although telcos are transforming their technology and business platforms to become more agile and to evolve past monolithic access-based business models, they are finding it much more challenging than anticipated… software, cloud computing and open source are promising and will simplify operations, but in the short term, telcos are preferring to rely on their trusted vendors".

-           "… open source projects are contributing valuable inputs toward the evolution of telco networks, (but) there is also competition among open source projects and the concept is misunderstood and in some cases misused… the golden ratio is somewhere between end-to-end systems and open source components, if vendors provide open interfaces and flexibility to integrate third-party and smaller vendors".

Tuesday, April 11, 2017

IDC: Accelerating IT Infrastructure Spending for Public Clouds

Total spending on IT infrastructure products (server, enterprise storage, and Ethernet switches) for deployment in cloud environments will increase 15.3% year over year in 2017 to $41.7 billion, according to a new forecast from IDC.

"After the slowdown seen in 2016, we expect to see spending on IT infrastructure for public cloud deployments return to double-digit growth in 2017," said Natalya Yezhkova, research director, Storage Systems. "Growing demand for access to agile IT resources and proliferation of next generation workloads will continue driving adoption of cloud-based services. In turn, this move leads to a shift in IT infrastructure spending from traditional enterprise on-premises deployments to datacenters delivering cloud services and corporate private clouds."

Some highlights from IDC's Worldwide Quarterly Cloud IT Infrastructure Tracker:

  • Public cloud datacenters will account for the majority of spending, 60.5%, while off-premises private cloud environments will represent 14.9% of spending. On-premises private clouds will account for 62.3% of spending on private cloud IT infrastructure and will grow 13.1% year over year in 2017.
  • Overall, worldwide spending on traditional, non-cloud, IT infrastructure will decline 5.3% in 2017. However, it will still account for the largest share, 57.9%, of end user spending.
  • In cloud environments, Ethernet switches will be the fastest growing technology segment at 21.8% year over year growth in 2017, while spending on servers and enterprise storage will grow 17.9% and 10.7%, respectively. 
  • Long term, IDC expects spending on off-premises cloud IT infrastructure will grow at a five-year compound annual growth rate (CAGR) of 11.7%, reaching $47.2 billion in 2021. Public cloud datacenters will account for 80.4% of this amount.

Friday, March 31, 2017

LightCounting Forecasts Optics Sales to top 4 ICPs

LightCounting, in its latest High-Speed Ethernet Optics report, finds that demand for Ethernet optics from leading Internet content providers (ICPs) continues to rise, with sales to the Top 4 ICPs - Amazon, Facebook, Google and Microsoft - forecast to increase from $0.5 billion in 2016 to $1 billion in 2017 and nearly $2 billion by 2022, representing around 30% of the global market for Ethernet transceivers.

LightCounting notes that supply shortages for 100 Gigabit Ethernet optics limited market growth in 2016, as vendors worked to ramp production. The research firm projects that, based on estimated manufacturing capacity for the leading suppliers of optics in 2017, demand will continue to exceed supply until 2018. Meanwhile, it expects volume shipments of 200 and 400 Gigabit Ethernet transceivers for applications in ICP mega-data centres will commence in 2019 and 2021, respectively.

Broken down by technology, LightCounting forecasts that the 40 Gigabit Ethernet segment will continue to decline having peaked in 2016, while sales of 100 Gigabit Ethernet solutions will continue to grow rapidly and peak at around $1 billion by 2019. For the 200/400 Gigabit Ethernet segment, it projects that sales will ramp from 2018 to reach around $200 million in 2019 and approach $1.2 billion by 2022.

LightCounting's forecast is based on a correlation between the growth rate of traffic inside mega-data centres and the bandwidth of optical transceivers sold into the market segment, while Amazon and Facebook recently stated that traffic in their facilities is increasing at a rate of around 100% per year.

Meanwhile, data on transceiver sales indicates that the top 4 ICPs increased bandwidth of optical connectivity by 70% in 2016, which is consistent with reported shortages in supplies of 100 Gigabit Ethernet optics. For 2017, LightCounting expects that bandwidth will increase by 90% as supply chain shortages moderate.

For the period 2018 to 22, LightCounting's projections assume that traffic growth in mega-data centres will decline gradually, while ICPs will find ways to use optical connectivity more efficiently. Even so, the research firm predicts that the global market for Ethernet optics will increase by 18% annually and exceed $6 billion by 2022.

Wednesday, March 15, 2017

ABI reports 2bn LTE Subscribers Accounting for 67% of mobile traffic

According to the latest Mobile Networks Biannual Update report from ABI Research, the mobile telecoms landscape is evolving rapidly, with national 4G deployments nearing completion in most markets worldwide and estimating that the 2 billion global 4G (LTE) subscribers as of early 2017 will increase to more than 4 billion in 2022, meaning that globally over 50% of people will be using an LTE network by that time.

However, ABI notes that the 4G market is continuing to develop, with the first gigabit-capable LTE networks beginning to arrive, offering mobile connectivity at speeds of up to 1 Gbit/s for end users.

Meanwhile, although 5G discussions and early developments are progressing ABI believes that LTE networks will continue as the backbone of broadband connectivity for many years yet as networks are upgraded to enable gigabit speeds and provide the foundation for 5G.

Further highlights of the ABI study include:

1. Mobile traffic totaled an estimated 109 Exabytes during 2016 and will reach 522 Exabytes in 2022, representing an average user consumption of 1.2 Gbytes per month currently, rising to over 5.7 Gbytes per month by 2022.

2. Over the period to 2022, LTE is expected to continue to be the dominant technology; at present LTE carries around 67% of total mobile traffic, and this is predicted to increase to 82% in 2022, while by that time 5G will account for only 13% of overall mobile data traffic.

3. Operator profitability is under pressure, with ARPU in the U.S., the most lucrative market, at around $43 currently, but expected to decline to less than $35 in 2022.

4. Network operator capex is also under pressure and looks set to continue to decrease until 2019, after which time it will rise as 5G deployments will ramp up.

5. 2G and 3G networks are expected to experience a double-digit subscriber decline for the second consecutive year; ABI notes that of the operators it tracks, 60 are twilighting 2G and 38 sunsetting 3G networks, meaning no more investments in upgrades, although consolidation of infrastructure and 2G/3G combinations with 4G continue.

Commenting on the report, Nick Marshall, research director at ABI Research, said, "Gigabit LTE appeared this month in Telstra’s network, and ABI expects more than 15 mobile operators to be offering gigabit speed services to subscribers by the end of 2017… this is a significant development, and one that will lead to new use cases from the increase in data speed available to end users".

Monday, March 13, 2017

ABI Reports 16.5m LTE-A Pro subs in 2016 and Forecasts 641m by 2021

ABI Research finds in its report, LTE-Advanced Pro/4.5G: Bridging the Gap to 5G, that as LTE-Advanced Pro deployments gain momentum the technology, which offers an upgrade from current LTE-Advanced networks, can enable the transition to 5G for mobile operators.

ABI estimates that global subscribers for LTE-Advanced Pro high-speed downlink services totalled 16.5 million at the end of 2016 and forecasts that global subscribers to high-speed data services will exceed 641 million by 2021, with 87% of the total in Asia Pacific, North America and Western Europe region,

The research firm notes that delivering downlink speeds of between 450 Mbit/s and up to 1.2 Gbit/s utilising LTE-Advanced Pro is dependent on a number of technology enhancements, namely a minimum of 3-component carrier aggregation (CA), 4 x 4 MIMO antennae and 256QAM downlink combined with 16QAM uplink modulation. The use of these technologies allows high speed user access as well as freeing up limited network resources and optimising the spectral efficiency of the mobile network.

ABI estimates that there are currently approximately 120 LTE-Advanced Pro trials or commercial deployments in place. Notably, Australia's Telstra launched its Gigabit-class LTE service in January 2017, while other operators with projects underway include AT&T, Sprint and T-Mobile in the U.S., NTT DOCOMO in Japan and SK Telecom in South Korea.

The research firm adds that while current smartphones are not yet capable of supporting gigabit LTE speeds, it expects that mass device production will begin later this year based on early announcements of flagship gigabit LTE smartphones by several established OEMs during the recent Mobile World Congress 2017.

Commenting on the report, Jake Saunders, VP at ABI Research, said, "LTE-Advanced Pro gives mobile network operators a capex-friendly option to continue upgrading their networks… 5G may be still out of the reach for many operators, but through incremental investment LTE-Advanced Pro guarantees features that will generate new business cases for operators and better user experience for end users, while preparing for 5G deployment".

Friday, March 10, 2017

IDC: Worldwide Ethernet Switch Market up in Q4

The worldwide Ethernet switch market (Layer 2/3) recorded $6.7 billion in revenue in the fourth quarter of 2016 (4Q16), an increase of 3.5% year over year, according to  the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker.

Some highlights from IDC:

  • For the full year 2016, the market recorded $24.4 billion in revenue, for a full year growth rate of 2.4%. 
  • The worldwide total enterprise and service provider (SP) router market recorded $3.87 billion in revenue in 4Q16, increasing 1.5% on a year-over-year basis. 
  • For the full year 2016, this market finished at $14.58 billion, an increase of 1.3% over 2015. These growth rates are according to results published in
  • 10Gb Ethernet switch (Layer 2/3) revenue increased 3.4% year over year in 4Q16, coming in at $2.42 billion, while 10Gb Ethernet switch port shipments grew 18.9% year over year with over 11.7 million ports shipped in 4Q16. For the full year 2016, 10Gb Ethernet revenues increased 1.5% over 2015, with port shipments increasing 19.4%. '
  • 40Gb Ethernet revenue came in at $696.6 million in 4Q16, the same as in 4Q15, while port shipments fell just below 1.4 million, representing a decrease of 1.0% year over year. For the full year 2016, 40Gb Ethernet revenues grew 19.6% over 2015, with shipments increasing by 59.0%. 
  • The worldwide enterprise and service provider router market grew 1.5% on a year-over-year basis in 4Q16 based on a 2.0% increase in the larger service provider segment and a 0.3% decrease in enterprise routing. For the full year, the combined market increased 1.3%, upon a 0.9% increase in the SP segment and 2.4% growth in the enterprise segment. 

"As the Ethernet switching market reaches a greater level of maturity from 1GbE to 10GbE, it is increasingly characterized by customers moving more quickly to higher speeds at lower port costs, especially in the datacenter," said Rohit Mehra, vice president, Network Infrastructure at IDC. "While overall port shipments continue to grow, it is the revenues from the fastest speeds that continue to buoy the market."

Monday, March 6, 2017

Crehan: Branded Data Center Ethernet Switch Revenue Tops $10B in '16

Branded data center Ethernet switch sales exceeded $10 billion in 2016, according to the latest report from Crehan Research Inc.  The report notes that this revenue level, a record, was accompanied by the strongest market growth rate since 2013.

“2016 was a strong year for data center Ethernet switching, with robust customer spending on public, private and hybrid clouds," said Seamus Crehan, president of Crehan Research. “40GbE and 100GbE switches were the main market drivers, with a total of over one billion dollars in revenue growth. However, 40GbE data center switch spending softened in the second half of the year, while spending on 100GbE continued to increase throughout the year."

In addition to the strong top-level revenue performance, notable results from Crehan’s data center switch report include:

  • 25GbE shipments ramped exponentially during 2016, exceeding a one-and-a-half million annual port run-rate by 4Q16, driven mostly by Cisco’s Cloud Scale Nexus 9000 series 
  •  100GbE shipments increased dramatically throughout the year, also surpassing a one-and-a-half million annual port run-rate by 4Q16, with data center switches from Arista and Cisco accounting for most of the year’s volume 
  • 10GBASE-T data center switch shipments increased more than 60% for the full year 2016  Cisco accounted for over half of total branded data center Ethernet switch revenues in 2016 
  • Arista, Huawei and Juniper all saw data center switch revenue increases in excess of 30% in 2016, resulting in share gains  
  • The top-line 2016 average selling price per data center switch port was almost identical to that of 2015  

“The total market average selling price remained remarkably stable in 2016, despite factors such as intense data center switch competition and the price negotiating power of the large hyper-scale cloud customers," Crehan said. "Migration to higher speeds and strong adoption of modular switching were key factors in the stability.”

Sunday, March 5, 2017

Vertical Systems: 2016 Global Provider Ethernet LEADERBOARD

Orange and Colt retained the top two positions on Vertical Systems Group's year-end 2016 Global Provider Ethernet LEADERBOARD.  The results are as follows (in rank order based on retail port share): Orange Business Services (France), Colt (U.K.), AT&T (U.S.), BT Global Services (U.K.), Level 3 (U.S.), Verizon (U.S.) and NTT (Japan). The Global Provider LEADERBOARD, the industry's benchmark for multinational Ethernet network market presence, ranks companies that hold a 4% or higher share of billable retail ports at sites outside of their respective home countries.

Based on year-end 2016 Global Provider port share, Orange and Colt retain the first and second LEADERBOARD positions, respectively. AT&T gains share to move into third position, ahead of BT Global Services.

The Challenge Tier of Global Providers includes companies with share between 2% and 4% of this defined market. Six companies qualify for the 2016 Challenge Tier (in alphabetical order): Cogent (U.S.), SingTel (Singapore), T-Systems (Germany), Tata Communications (India), Telefonica Worldwide (Spain) and Vodafone (U.K.).

"Global carriers are rolling out dynamic network services that provide enterprises with unprecedented levels of agility and reliability," said Rick Malone, principal at Vertical Systems Group. "Ethernet is playing a critical role in emerging SDN-based architectures that will support the increasing demand for hybrid WANs, and high-speed data center and cloud connectivity."

The three leading Global Providers - Orange, Colt and AT&T - are working with MEF and TM Forum on the first standard application programming interfaces (APIs) for orchestrated Carrier Ethernet services over SDN architectures. These efforts are a significant advancement toward standardizing dynamic service connectivity between network providers throughout the world.

Monday, February 13, 2017

Intel: Building Trust in a Cloudy Sky

IT professionals are gaining trust in public cloud services, according to the second annual cloud security report from Intel Security, which surveyed more than 2,000 participants. The finding validates an overall perception that confidence in public cloud services continues to improve year over year. Those who trust public clouds now outnumber those who distrust public clouds by more than 2-to-1.

“The ‘Cloud First’ strategy is now well and truly ensconced into the architecture of many organizations across the world,” said Raj Samani, EMEA chief technology officer, Intel Security. “The desire to move quickly toward cloud computing appears to be on the agenda for most organizations. This year, the average time before respondents thought their IT budgets would be 80 percent cloud-based was 15 months, indicating that Cloud First for many companies is progressing and remains the objective.”

Some key findings:

  • Shadow IT - due to the ease of procurement, almost 40 percent of cloud services are now commissioned without the involvement of IT
  • Visibility of these Shadow IT services has dropped from about 50 percent last year to just under 47 percent this year. As a result, 65 percent of IT professionals think this phenomenon is interfering with their ability to keep the cloud safe and secure. 
  • The number of organizations using private cloud only has dropped from 51 percent to 24 percent over the past year, while hybrid cloud use has increased from 19 percent to 57 percent. 
  • On average, 52 percent of an organization’s data center servers are virtualized, 80 percent are using containers and most expect to have the conversion to a fully software-defined data center completed within two years.
  • User credentials, especially for administrators, will be the most likely form of attack. Organizations need to ensure they are using authentication best practices, such as distinct passwords, multi-factor authentication and even biometrics where available.
  • Security technologies such as data loss prevention, encryption and cloud access security brokers (CASBs) remain underutilized. Integrating these tools with an existing security system increases visibility, enables discovery of shadow services, and provides options for automatic protection of sensitive data at rest and in motion throughout any type of environment.
  • Organizations need to evolve toward a risk management and mitigation approach to information security. They should consider adopting a Cloud First strategy to encourage adoption of cloud services to reduce costs and increase flexibility, and put security operations in a proactive position instead of a reactive one.

Wednesday, February 8, 2017

Dell'Oro: Cloud Data Centers Drive Toward 400G by 2019

Cloud Data Centers are forecast to drive the transition toward 400 Gbps by 2019, according to a newly published report from Dell'Oro Group.

“Cloud Service Providers (SP) are entering an expansion and mega-upgrade cycle driven by increased capacity demand and aging infrastructure,” said Sameh Boujelbene, Senior Director at Dell’Oro Group. “We anticipate at least two major product cycles by 2021. The first cycle will ramp this year and will be driven by 25 GE SERDES technology, mainly using Broadcom’s Tomahawk-based silicon. The second cycle will start in 2018 – 2019, driven mainly by 50 GE SERDES technology,” Boujelbene explained.

Highlights from the Ethernet Switch – Data Center 5-Year Forecast Report:

  • The overall Ethernet Switch – Data Center market is expected to reach over $14 B by 2021.
  • Data Center switching deployment scenarios are expanding to more areas, such as Data Center Interconnect.
  • Disaggregation of the switch hardware and switch operating system will spread significantly beyond white box systems over the forecast period.
  • Apart from Google, all major Cloud SPs are asking for 400 Gbps. We anticipate that 400 Gbps will become the next major speed after 100 Gbps, provided availability of 400 Gbps optics.

See also