Data centers to drive optical networking equipment market to $20 billion by 2017

Data centers are expected to drive optical networking equipment demand to $20 billion by 2017.

The highest growth region will be Latin America, driven by network modernization efforts to enhance regional connectivity in support of mobile and broadband access network buildouts.

North America is expected to exhibit solid growth as tier-1 network operators embrace new technology to meet growing data center needs.

Growth in Asia-Pacific is expected to continue but will cool a bit after 5 years of torrid growth.

The new bandwidth driver is data centers. Large-scale data centers continue to be built out both the multi-tenant, carrier-neutral variety and private data centers.

“The data centers are being placed in brand new locations, creating brand new optical networking demands. For example, the new Facebook data center at Lulea, Sweden, near the Arctic Circle, will require terabits of bandwidth. These new demands are not unique to Lapland – they are emblematic of a trend unfolding in multiple European and North American locations,” said Ian Redpath, principal analyst in Ovum’s Network Infrastructure practice.

In EMEA, Russian network operators have visions of supplying pan-Asian capacity interconnecting the Far East to Europe overland. The southeast U.K. is another hotspot, with over 150 data centers.

In China, the optical network market has trebled in size over the past 5 years and continues to grow. Much of the core backbone was built in support of early generations of mobile technology, but there is still a wave of high-speed fixed broadband and next-generation mobile to come.

The ON market in Latin America is in great shape as incomes have been rising, enabling network operator revenue growth. Broadband is recognized as an essential service, and inter- and intra-continental connectivity is undergoing an upgrade.

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