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Despite Slow Uptake, 40/100GE Adoption Is Set to Grow, Heavy Reading Finds

Companies mentioned in this article: Heavy Reading

NEW YORK, Aug. 5, 2014 /PRNewswire/ -- Although bandwidth demand has grown exponentially, ultra-high-bandwidth (UHB) Ethernet services haven't had the huge uptake expected; however, it seems as if adoption will pick up in 2014, according to the latest report from Heavy Reading Insider (www.heavyreading.com/insider), a subscription research service from Heavy Reading (www.heavyreading.com).

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40/100G Ethernet Service Update: Slow but Steady Progress reviews how both U.S.-based and some non-U.S.-based international carriers are addressing UHB Ethernet services. It explores significant issues affecting adoption of 100GE and 40GE services, including equipment and service cost ratios in relation to long-established 10GE service. It also explores the relationship between the 100G and 40G bandwidth levels, the nature of the adopter population and other market drivers and obstacles. Finally, the report includes status reports on how various carriers are deploying and selling services and a market forecast of U.S.-based UHB services.

For a complete list of companies covered in this report, please click the following link: http://twimgs.com/audiencedevelopment/LRHR/PDFS/hri0814_companies.pdf

"While bandwidth demand continues to escalate and carriers upgrade their networks accordingly for 100Gbit/s transmission, UHB Ethernet services sold by carriers are still a relatively modest presence," says Steve Koppman, contributing analyst with Heavy Reading Insider and author of the report. "The resulting high 100GE:10GE 'cost ratio' keeps potential buyers using relatively attractively priced multiple 10GE circuits rather than migrating to the higher bandwidth level."

100GE services are taking time to become the major and widely adopted market presence they will surely be, Koppman says. "Despite radical bandwidth demand increases, this new generation of UHB services has only emerged modestly so far, slowed by high equipment prices," he continues. "However, 100GE equipment prices will decline gradually at unpredictable points over the next two to three years, based on competitive market forces."

Key findings of 40/100G Ethernet Service Update: Slow but Steady Progress include the following:

    --  100GE adoption is picking up in 2014 but remains relatively modest,
        hampered by high router (and other equipment) prices.
    --  6:1 to 7:1 are typical cost ratios between 100GE and 10GE -
        incrementally lower than a year ago.
    --  Cost ratios remain higher for equipment, especially routers, slowing
        adoption; 100GE switches have declined more in price than routers, and
        core network equipment more than end-user termination gear.
    --  100GE router prices will fall over the next few years, but timing
        remains unpredictable.
    --  100GE services sales in the U.S. will reach $150 million in 2016 and
        $275 million in 2017, increasing 15-fold from 2014 levels.
    --  The market dilemma is that vendors wait for more buyers before lowering
        prices, while buyers wait for lower prices before buying.

40/100G Ethernet Service Update: Slow but Steady Progress is available as part of an annual single-user subscription (12 issues) to Heavy Reading Insider, priced at $1,995. Individual reports are available for $900 (single-user license).

To subscribe, or for more information, please visit: www.heavyreading.com/insider. For more information about other Heavy Reading Insider research services, please visit: www.heavyreading.com/research.

To request a free executive summary of the report, or for details on multi-user licensing options, please contact:

David Williams
Global Director of Sales, Research
Heavy Reading
858-829-8612
dwilliams@lightreading.com

Press/analyst contact:
Dennis Mendyk
Vice President of Research, Heavy Reading
201-587-2154
mendyk@heavyreading.com

About Heavy Reading
Heavy Reading (www.heavyreading.com), the research division of Light Reading, offers deep analysis of emerging telecom trends to network operators, technology suppliers, and investors. Its product portfolio includes in-depth reports that address critical next-generation technology and service issues, market trackers that focus on the telecom industry's most critical technology sectors, exclusive worldwide surveys of network operator decision-makers that identify future purchasing and deployment plans, and a rich array of custom and consulting services that give clients the market intelligence needed to compete successfully in the global telecom industry.

About Light Reading
Light Reading (www.lightreading.com) combines its research-led online communities and targeted events portfolio to help those in the global communications industry make informed decisions. Lightreading.com is the ultimate source for telecom analysis for more than 350,000 subscribers each month, leading the media sector in terms of traffic, content, and reputation. Light Reading produces targeted communications events and focused one-day conferences each year for cable, mobile, and wireline executives across five continents.

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SOURCE Heavy Reading