Ovum is projecting an upbeat long-term forecast for sales of optical networking (ON) equipment, driven by brand new data center demands.
The global analysts expect the ON market to reach $20 billion by 2017 with a 5% compound annual growth rate (CAGR).
The latest Ovum forecasts show that growth in Asia-Pacific is expected to continue, but cool a bit after five years of torrid growth.
“In China, the optical network market has trebled in size over the past five years and continues to grow. Much of the core backbone was built in support of early generations of mobile technology, but there is still a wave of high-speed fixed broadband and next-generation mobile to come,” predicts Ian Redpath, principal analyst in Ovum’s Network Infrastructure practice.
The highest growth region will be Latin America, driven by network modernization efforts to enhance regional connectivity in support of mobile and broadband access network buildouts. North America is expected to exhibit solid growth as tier-1 network operators embrace new 100G technology to meet growing data center needs. The EMEA market is meanwhile expected to expand, despite the current macro-economic malaise, due to deployment activity in Russia, the UK, Eastern Europe and Africa.
“The new bandwidth driver is data centers. Large-scale data centers continue to be built out – both the multi-tenant, carrier-neutral variety and private data centers,” says Redpath.
Redpath says the data centers are being placed in brand new locations, creating brand new optical networking demands. For example, the new Facebook data center at Lulea, Sweden, near the Arctic Circle, will require terabits of bandwidth. These new demands are not unique to Lapland – they are emblematic of a trend unfolding in multiple European and North American locations.