The balance of power in the optical networking market has undergone a seismic shift in recent years. Data center interconnect (DCI) has emerged as the main driving force for innovation and spending, shaking up the entire structure of the industry. This new market focused purely on DCI networks has become the engine for expansion and innovation, completely disrupting the traditional supply chain and even altering equipment design.
As DCI reshapes the landscape, we’re seeing deployed bandwidth capacity climb 25 to 30 percent year-over-year. One-hundred gigabit per second (100GB) transport is now finally unseating the technology warhorse of the past decade, 10GB, with 100GB deployments expected to grow five times over in 2017. That’s because data centers are the early adopters and drivers of 100GB across the globe.
Brave New DCI
We’re hearing more and more about the world’s largest Internet content providers (ICPs) and cloud service providers (CSPs) – the challenges they’re facing, the technologies they’re building and the partnerships they’re developing. The phenomenal growth in Internet traffic and the fierce migration to cloud-based services in recent years are combining to force a dramatic rethink of how data centers are connected. If data center operators are to continue meeting customer expectations, they need to build an optimized data center interconnect infrastructure that can be scaled indefinitely.
DCI-optimized networks are necessary to eliminate data bottlenecks and to accommodate the enormous demand for flexible, cost-efficient growth. ICPs, CSPs and the like are all too aware that they need transport technology purpose-built for the task of interconnecting data centers. Without it they’ll be unable to continue their current business momentum, resulting in direct financial consequences.
So, why are the needs of interconnecting data centers different than those of traditional transport networks? Why is a fundamental shift toward DCI-optimized technology required to ensure continued business expansion? And, how will it enable ICPs, CSPs and the other businesses in the DCI ecosystem to scale to meet demand both now and in the future?
What They Want, How They Want DCI
The needs in DCI are different than traditional optical networking. Data centers organize their data differently, so they require technology built specifically for their requirements. And with purchasing clout now tilted in their favor, data center operators are finally driving the design decisions in the optical networking industry.
Data center operators start with a stringent set of demands for density, scalability and energy: more than a terabit per second (Tbit/s) per shelf for optimal utilization of space and equipment in colocation and leased spaces; open solutions featuring open protocols, hardware and software interfaces for scaling best-of-breed, multi-vendor networks; and less than 500MW of energy usage per Gbit/s of bandwidth delivered for superior efficiency. Furthermore, data center operators need a lower number of touch points and inventory items. What’s more, they need plug-and-play simplicity.
What they really care about is software-defined networking (SDN) and open application programming interfaces (APIs). Data center operators began building orchestration software to run their own internal networks long before they started worrying about the transport connections among data centers. ICPs and CSPs need more than just scale and energy efficiency if they’re to truly expand their DCI connectivity. Software and ease of integration are critical but often overlooked factors. For example, they want a wide range of customizable APIs for programmability, no matter the size or architecture of the underlying network (simple point-to-point networks, meshed networks, global-scale virtualized networks, etc.)
Data center operators are no longer satisfied with settling for technologies that the Tier 1 telcos wanted. They want what they want, and they demand it on their own business terms. That’s because they now have the purchasing clout and are finally getting exactly what they demand.
Hot DCI Vs. Not so hot DCI
There are important distinctions between the requirements of traditional Tier 1 telcos and data center operators that must be accounted for when optimizing DCI infrastructures:
Where telcos derive revenues from transporting bits, data center operators derive revenue from applications and content (in fact, transport is a cost center).
Where equipment flexibility is key to telcos, cost-per-port is a higher priority with data center operators.
Where telco network design is driven by reliability and service-level agreements (SLAs), cost and capacity requirements, plus real estate constraints, drive network design for data center operators.
Where telcos typically own their fiber assets, data center operators typically lease.
Where telcos have typically sourced their control planes from vendors and settled for limited interoperability, data center operators want open-source, open-vendor solutions and SDN.
A New DCI Market to Conquer
DCI is an entire ecosystem. Yes, the major ICPs and CSPs drive a lot of the spend, but there are more than 1,000 other companies in the same line of business: dark fiber and wavelength service providers, colocation providers, and leased equipment vendors. All of these enterprises have decided to connect their own data centers and all the links from data center to IXP to point of presence.
Data center network spending has now eclipsed that of Tier 1 telephone companies. That’s a trend that has utterly disrupted the optical networking supply chain. Not long ago it was very stable and established – from research and development, to component provider, to subsystem provider, to equipment provider, to value-added reseller, to network builder, to dark-fiber trencher. But no more. Today, players along the old chain are scrambling to secure their place in the new DCI-driven world.
The Future of DCI Beckons
So, given the unique needs of data center operators, where does the optical networking industry go from here? It’s likely we’ll see devices that are more open, more programmable, denser, cheaper and require lower power. They’ll have a migration path to 500 petabits per second as well as open line systems, both optical and management. We’ll see greater spectral efficiency enabled by new modulation techniques and adoption of Raman and other optical technologies to maintain distance and improve flexibility; and there’ll certainly be more focus on optimized space, cooling and security solutions and less and less vendor/technology lock-in. A fundamental shift toward technology specifically optimized for the DCI opportunity has overtaken the optical networking industry. It looks like it could be the major driver of equipment design decisions for years to come.
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