Heavy Reading
EXECUTIVE SUMMARY

ROADMs and the Future of Metro Optical Networks

The concept of reconfigurable optical add-drop multiplexers isn't new in fact, ROADMs have been around for at least four years and have been part of a handful of vendors' WDM gear in both North America and Europe since 2002. Long-haul DWDM networks have nearly all been constructed with ROADMs in the past three years, setting the stage for a migration of this functionality into metro and regional networks as prices drop and network flexibility requirements escalate.

The marketplace has long been rather wary of ROADMs carriers have asked for more flexibility in their optical networks and simpler wavelength provisioning, monitoring, and management, but they have been loath to pay the price premium or invest in immature technologies. In addition, ROADMs are by their nature devices, not whole systems a distinction that has led to some confusion in the marketplace about just what constitutes a ROADM system, when some vendors offer products with similar functionality based on different underlying device technologies.

Today, it is more accurate to define the ROADM market space by function, rather than by technology. Heavy Reading chooses to call this market opportunity the "reconfigurable optical networking market," which encompasses what are often dubbed "ROADM systems," "optical add-drop switches," wavelength switching systems (WSS), and even what one vendor refers to as "digital optical networking." What these systems have in common is the ability to network wavelengths in a granular, automated fashion in metro and regional networks, with integrated transport and switching at both the wavelength and Sonet/SDH layers in a single network element. ROADM, therefore, really stands in for the more cumbersome "next-gen metro optical networking system."

ROADMs and the Future of Metro Optical Networks provides a detailed look at how network operators are likely to reshape their metro core optical networks, focusing on multiservice reconfigurable optical networking markets and opportunities. The report is based on a broad survey of service provider professionals, direct interviews with a wide range of network operators, and conversations with key players in the supplier community. It delivers a complete assessment of the metro optical networking opportunity, from the values of different hardware platforms to the key criteria operators have laid out in their most recent RFPs.

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Network operators interviewed for this report include:

Alltel Corp. (NYSE: AT)
Broadwing Corp. (Nasdaq: BWNG)
Global Crossing Ltd. (Nasdaq: GLBC)
MCI Corp. (Nasdaq: MCIC)
NEON Communications Inc. (OTC: GBXX)
PPL Telcom LLC (NYSE: PPL)
SBC Communications Inc. (NYSE : SBC)
TelCove Inc. (formerly Adelphia Business Solutions)
Verizon Communications Inc. (NYSE: VZ)
WilTel Communications Group Inc. (NYSE: LUK)

Equipment vendors surveyed include:

ADVA AG Optical Networking (Frankfurt: ADV)
Alcatel (NYSE: ALA; Paris: CGEP:PA)
Ciena Corp. (Nasdaq: CIEN)
Cisco Systems Inc. (Nasdaq: CSCO)
ECI Telecom Ltd. (Nasdaq: ECIL)
Fujitsu Network Communications Inc. (OTC: FJTSY; Tokyo: 6702)
Infinera Inc.
Lambda Optical Systems Corp.
Lucent Technologies Inc. (NYSE: LU)
Mahi Networks Inc.
Marconi Corp. plc (Nasdaq: MRCIY; London: MONI)
Meriton Networks Inc.
Motorola Inc. (NYSE: MOT)
Movaz Networks Inc.
Nortel Networks Ltd. (NYSE/Toronto: NT)
OpVista Inc.
Scientific-Atlanta Inc. (NYSE: SFA)
Siemens AG (NYSE: SI; Frankfurt: SIE)
Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA)
Tropic Networks Inc.

The report includes full results and analysis of an exclusive, worldwide survey of telecom service providers regarding their network expansion plans and the anticipated role that ROADMs will play in that expansion. Nearly 70 service provider professionals participated in the survey, representing a wide range of network operator types from around the world.


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Key Findings

Key findings of the report include the following:

Rollouts of triple-play access infrastructure and business Ethernet services infrastructure will drive demand for reconfigurable optical network systems. Ethernet and triple play will push a lot of traffic onto carrier interoffice facilities (IOFs) and metro core facilities, requiring more than simple, incremental bandwidth additions. The unique transport requirements of these services will force operators to move to a new generation of optical systems and architectures.

The strict network-design limitations imposed by conventional metro DWDM systems have created a demand for a more agile photonic layer. The ROADM is the first step in that direction, followed by the wavelength-selective switch. Alternative approaches, using low-cost optical-to-electrical-to-optical (OEO) architectures, are also coming to market to challenge this design. The result will be a more flexible, automated metro optical network.

Most service providers are now either considering or already deploying ROADMs. In our survey of network operators, more than 60 percent of respondents said their company was either considering using ROADMs or had already begun deployment. Survey results indicate that this market is poised for initial growth in late 2005, with the bulk of operators focused on 2006-2007 as the timeframe for more aggressive deployments.

A migration to mesh architectures is a secondary driver for ROADM architectures. A handful of operators are planning to implement mesh architectures in their metro/regional networks, using ROADM systems to create a flexible optical layer over which wavelengths can be provisioned and protected across a physical mesh.

The primary value of ROADMs to network operators is operational. ROADMs can help carriers overcome the strict limitations of conventional metro DWDM networks with fixed OADMs and banded architecture. Their ability to offer flexible deployment topologies and hitless addition of wavelengths and nodes ranks high for service providers.

The challenge for equipment vendors is that operational savings typically make for a difficult sale and problematic market trigger. Many operators continue to focus capex on new revenue opportunities (IPTV, broadband, VOIP), which can easily divert funds away from metro core optical deployments that are not directly associated with new services.

Report Scope and Structure

The underlying methodology for this report was designed to gather information critical to equipment suppliers and service providers in this competitive market. First, Heavy Reading conducted one-on-one interviews with network operator employees, typically senior network planners and architects. Subjects covered included the current state of their metro transport networks, their solutions for scaling those networks, and specifics on feature requirements for Sonet/SDH ring aggregation systems and ROADM systems.

Second, Heavy Reading conducted a worldwide online survey of telecom operators on the topic of Sonet/SDH networking, demand for integration or data features into Sonet/SDH gear, ROADM system values, and key features. The survey drew responses from nearly 70 service provider professionals, representing more than 40 incumbent and competitive operators.

Third, Heavy Reading surveyed a wide range of metro optical networking vendors to gather information on their Sonet/SDH aggregation products and ROADM systems.

ROADMs and the Future of Metro Optical Networks is structured as follows:

Section I provides a detailed overview of the reconfigurable optical networking sector, including complete key findings.

Section II begins with an assessment of the overall metro optical networking market, pointing out where new, more agile photonic systems will first penetrate carrier networks, and adding some thoughts on long-term direction. This section provides basic guidelines for sizing up the ROADM market opportunity, with detailed illustrations of key applications and demand drivers.


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Section III delivers a detailed look at the enabling technologies underpinning this new class of metro optical systems.

Section IV summarizes the interviews of operators conducted for this report.

Section V details results of Heavy Reading's worldwide online survey of service providers.

Section VI describes key vendor offerings in the ROADM/WSS and low-cost OEO solution market. The vendor ranking system used in this section takes into account technical strengths, availability of key features, current market presence and market power, and long-term outlook for product development to assign a value to each company.

The report is essential reading for a wide range of industry participants, including the following:

Equipment suppliers: How does your product portfolio match up with your competition's? Does your product line address the key issues that network operators are targeting with their network expansion plans? Which network operators are likely to be the most aggressive with their network expansion? What's the most likely timing for broad commercial deployment of ROADM and related technology?
Component and subsystem manufacturers: Which system solutions are emerging as the front-runners in the eyes of network operators? How do system vendor product development plans match up to your portfolio? Which operators are the most attractive prospects for your products?
Network operators: How do your network expansion plans match up with your key competitors? Which technologies are settling in as the most popular choices? Which vendors will be in the best position to deliver the products you need to build your next-generation network?
Investors: Which equipment makers are in the best position to capture market share in this important telecom industry sector? When will this sector begin to show meaningful and sustainable growth?

ROADMs and the Future of Metro Optical Networks is published in PDF format.
LENGTH: 71 PAGES
PRICE: $3,495
SCOTT CLAVENNA
Chief Analyst, Heavy Reading
Scott Clavenna is the head of Heavy Reading's team of analysts and a leading authority on next-generation telecom technology. He has 12 years' experience researching the optical networks and broadband networking markets...
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KEY FINDINGS
Demand for ROADMs will be driven by triple-play and Ethernet service rollouts
DWDM design limitations are creating demand for a more agile photonic layer
Most service providers are now considering or already deploying ROADMs
The primary value of ROADMs to network operators lies in added operational flexibility
The opex savings attraction will make ROADMs potentially a harder sell for vendors
Migration to mesh architectures is a secondary driver of carrier interest in ROADMs
NETWORK OPERATORS PROFILED:
Alltel Corp. (NYSE: AT)
Broadwing Corp. (Nasdaq: BWNG)
Global Crossing Ltd. (Nasdaq: GLBC)
MCI Corp. (Nasdaq: MCIC)
NEON Communications Inc. (OTC: GBXX)
PPL Telcom LLC (NYSE: PPL)
SBC Communications Inc. (NYSE : SBC)
TelCove Inc. (formerly Adelphia Business Solutions)
Verizon Communications Inc. (NYSE: VZ)
WilTel Communications Group Inc. (NYSE: LUK)
SYSTEMS VENDORS ANALYZED AND RATED:
ADVA AG Optical Networking (Frankfurt: ADV)
Alcatel (NYSE: ALA; Paris: CGEP:PA)
Ciena Corp. (Nasdaq: CIEN)
Cisco Systems Inc. (Nasdaq: CSCO)
ECI Telecom Ltd. (Nasdaq: ECIL)
Fujitsu Network Communications Inc. (OTC: FJTSY; Tokyo: 6702)
Infinera Inc.
Lambda Optical Systems Corp.
Lucent Technologies Inc. (NYSE: LU)
Mahi Networks Inc.
Marconi Corp. plc (Nasdaq: MRCIY; London: MONI)
Meriton Networks Inc.
Motorola Inc. (NYSE: MOT)
Movaz Networks Inc.
Nortel Networks Ltd. (NYSE/Toronto: NT)
OpVista Inc.
Scientific-Atlanta Inc. (NYSE: SFA)
Siemens AG (NYSE: SI; Frankfurt: SIE)
Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA)
Tropic Networks Inc.
DELIVERABLES
71 pages of analysis covering the reconfigurable optical networking market in terms of both network operators and technology vendors

Full results and analysis of an exclusive worldwide survey of service provider professionals on network expansion and ROADM deployment plans

In-depth rating of systems vendors regarding the strength of their reconfigurable optical networking product lines and their market position

Insight into operator plans for network expansion based on exclusive, one-to-one interviews

LENGTH: 71 PAGES
PRICE: $3,495
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