Ovum sees the availability of enterprise-grade optical routers, together with the ability to lease individual strands within dark fiber routes, encouraging companies to light their own fiber links, with financial market participants at the forefront of this trend.
It recommends that capital markets institutions consider the economics of managing their own optical links, particularly in the most demanding geographies.
Carriers with dark fiber, meanwhile, should study how to offer self-lit, self-managed capacity to the most tech-savvy hedge funds.
If your company has sufficient traffic on its wide area network (WAN) to warrant a fiber-optic link, the normal way to get one is to go to a carrier such as AT&T or Verizon in the US, or to Orange, BT, or another of the big national incumbents in Europe.
There are, of course, other competitors that are not household names - such as Interoute or AboveNet - but they are still network operators providing a service.
While this model of optical service provision is still overwhelmingly the norm, the third Dark Fiber Convention held last week in London revealed signs of change in particular market niches, with capital markets being a case in point.
Optical equipment vendor Vello Systems said it has signed up some 30 hedge funds since it started selling to enterprises 18 months ago. These firms have leases or fractional fiber contracts, running anywhere from one to ten years, on dark fiber routes that they are lighting and managing themselves.
The reasons for this development are several. Firstly, such institutions will typically be running at least two data centers for purposes of disaster recovery/business continuity and thus need to link them.
As these facilities move from 1Gb to 10Gb Ethernet connectivity, the bill to upgrade to the new, faster protocol is such that the economics of a “do-it-yourself” approach can be compelling.
Secondly, as Ovum’s latest research shows, this year banks have been big buyers for network upgrades that were delayed through the crash cost reductions of 2009. This is a highlight of our upcoming report Global Services Contracts 1H10: Telcos on a Bankers’ Bonus.