Ciena, Cisco and Infinera take dominant spots in optical data center interconnect market, says Dell’Oro

Cisco, Ciena and Infinera have carved out a sizeable niche in the disaggregated WDM systems market for data center interconnect (DCI) applications, taking a combined 85% share.

Dell’Oro Group estimated that disaggregated WDM systems reached an annualized run rate of $400 million, growing 225% year-over-year. This is partly because these systems are finding utility in the DCI market segment.

Optical disaggregation calls for the breaking down of optical equipment into its elemental functions, and service providers are looking at several variations of this method.

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One is the separation of transponders/modems from the line equipment (e.g. ROADMs and amplifiers). This requires interoperability between the different equipment types and gives network operators the advantage of not being locked into one equipment vendor. It is also expected to allow for more flexibility in equipment upgrade cycles, and to reduce capex costs.

AT&T is a supporter of this type of approach and has backed the ‘OpenROADM’ MSA (multisource agreement).

Jimmy Yu, VP at Dell’Oro Group, said that while the disaggregation concept is not new, service provider adoption in the data center segment is.

“In most—if not all—purchases, we found that these new systems were being employed in DCI across both metro and long haul spans,” Yu said in a release. “So far, the largest consumers have been internet content providers that appreciate the platform for its simplicity, capacity, and power savings.”

Yu added that “based on second quarter results, where disaggregated WDM systems represented nearly one-third of the optical DCI equipment purchases made, we have to say that Disaggregated WDM systems are truly hitting the sweet spot for DCI.”

As wireline operators look to diversify their revenue mix, the DCI market has a compelling growth path driven by the consumption and distribution of various data forms over the public internet and private networks.

Outside of DCI, the overall WDM market, which consists of WDM Metro and DWDM Long Haul, grew 2% year-over-year in the second quarter, says Dell’Oro. The research firm noted that growth was driven by strength in the Asia Pacific region, especially China and India.

The share of 100G WDM wavelength shipments going to DCI was 14% in the quarter.