Optical Transport Network Equipment Market Growth Promoted by Growing Applications of IoT| Technavio

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LONDON–()–The global optical transport network (OTN) equipment market is expected to grow at a CAGR of close to 22% during the period 2017-2021, according to a new market research study by Technavio.

The report categorizes the global optical transport network equipment market by technology (WDM and SONET/SDH) and end-user (communication service providers, public sector, and enterprises). The report also determines the geographic breakdown of the market in terms of detailed analysis and impact, which includes key geographies such as APAC, the Americas, and EMEA.

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Market driver: high demand for data centers

Optical networking, as a part of transport networking, is the core of data storage centers and business connectivity solutions. The increasing demand for high-bandwidth and consumer data use has resulted in larger investments in data centers by the data center and telecom operators. Modern data centers currently transfer data at the rates of 10 GB or more. Maintaining such rates of data transfer is becoming a challenge for copper wire-based electrical interconnects. New data centers currently require a larger portfolio of fiber-optic modules to connect servers and switches. Therefore, with the growing data traffic and the emergence of the cloud in data centers and applications, data center operators are relying on new-age technologies such as optical transport networks.

According to Jujhar Singh, a lead analyst at Technavio for embedded systems research, “Analytics applications used for big data analytics and other complex cloud-based applications require high-speed Internet connectivity. Data centers owned by Amazon, Google, Facebook, and Microsoft are equipped with energy-efficient and high-performance storage infrastructure. Fiber-optic network hardware is a crucial element of these data centers. For instance, the data center of Google, located in Council Bluffs, Iowa, is connected to the Google websites through an OTN and can run at a speed, which is 200,000 times faster than a typical US home Internet. This will fuel the demand for OTN equipment during the forecast period.”

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Market trend: increasing applications of the IoT

The IoT is the latest trend in the global technology arena. It connects all essential home devices to the Internet. It basically means that all the electronic gadgets can be interconnected, and it is expected that in the future, they will be able to interact among themselves. All the major gadget makers such as SAMSUNG, Dell, Apple, and Microsoft, have dedicated considerable resources for the R&D of the IoT. Owing to this, the future households will have a lot of connected nodes and appliances that are interconnected wirelessly so that they can together sense the surrounding environment and act accordingly. The increasing applications of the IoT will require OTNs that have the capacity and capability to support high bandwidths.

Market challenge: high initial investment

Customers such as telecommunication providers and data center providers are finding a significant surge in the data consumption, which increases the requirements for OTN equipment. However, the fast-growing traffic requires the adoption of newer technologies and services such as long-term evolution-advanced (LTE-A), big data, IoT, and cloud computing. Although optical transport network solutions support the increase in bandwidths and low latency using the WDM technologies, such solutions are expensive for many customers.

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Key vendors in the market

  • Huawei Technologies
  • Ciena
  • Nokia
  • ZTE
  • Infinera
  • Cisco Systems
  • Coriant

The global OTN equipment market is fragmented in nature. This is due to the presence of a leading cluster of vendors such as Ciena, Nokia, and Huawei Technologies, followed by a few niche providers such as ADVA Optical Networking and BTI Systems. The market vendors are concentrating on certain geographies where the adoption and applications of the technology are more than the other regions. The coherent technology is a major area of R&D focus, and it forms the differentiating factor among equipment and component vendors.

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Maria Burns

Maria Burns

Maria is a Viral News Editor who graduated from the University Of California. She likes social media trends, being semi-healthy, Buffalo Wild Wings and vodka with lime. When she isn’t writing, Maria loves to travel. She last went to Thailand to play with elephants and is planning a trip to Bali.
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