OVUM/ Analysts warn many challenges still to be resolved in WDM market despite vendor hype
October 15, 1998 M2 PRESSWIRE via NewsEdge Corporation : Global WDM market to exceed $8 billion by 2005
WDM* (Wavelength Division Multiplexing) is emerging as a crucial technology in enabling telcos to prepare their networks for the telecommunications demands of the 21st century, according to independent telecommunications and IT consultants, Ovum. In a new report, WDM: Global Strategies for Next Generation Networks, Ovum predicts a rapidly growing market for WDM solutions, but warns that market hype is running ahead of market reality.
According to Dr. Barry Flanigan, Ovum consultant and lead author of the report, "The main driver for WDM today is the need to increase network capacity and relieve fibre network congestion. This is a direct result of the explosion in telecommunications traffic, particularly data. However, WDM is also part of a much bigger story: the transition of telecoms networks towards 'all-optical networking' technology. This will have profound implications on the way in which the next generation of telco networks evolves, dramatically impacting the cost of transmission and the development of high bandwidth services."
*Ovum defines WDM as a transmission mechanism which involves sending multiple wavelengths (i.e. colour) of light along a single optical fibre, thereby increasing the capacity of a link without the need to install more fibre, or use higher speed transmission equipment
However, Flanigan cautions that much work remains to be done before the benefits of the future 'all-optical network' become a reality. "As WDM starts to evolve throughout the networks, the immaturity of the technology has become a major issue. To an extent WDM is a victim of its own success - the market has grown so rapidly in the last three years that a tremendous amount of publicity has been generated. There is a great deal of hype about the capabilities of products and size of the market amongst equipment vendors, but near term expectations must be kept in perspective."
As WDM technology evolves over the next decade, Ovum points out that there are still some significant barriers to overcome:
* The lack of network management and performance monitoring capabilities for WDM technology
* A need to understand how WDM will interact with other network technologies
* Immature standards, combined with a slow standardisation process which is hard pressed to keep up with market developments
* Proliferation of proprietary systems are making interworking between networks and vendors difficult
Flanigan continues, "The WDM supply market is currently undergoing great change. Consolidation amongst equipment vendors will certainly accelerate, as the embryonic stage of WDM reaches an end. Carriers and vendors are now looking at developing more complex architectures and functionality, which requires WDM to be more closely integrated with other network layers. A knowledge of how the whole network works, rather than simply WDM, will be key to success in the vendor market. This will result in many new partnerships and repositionings in the vendor community as the market evolves."
Ovum notes that most commercial deployments of WDM have so far been limited to point-to-point links in long-distance terrestrial and submarine links. However, improvements in the price and functionality of WDM will make it cost-effective to consider deploying WDM on shorter-distance links, in the metropolitan and access areas of the network. Coupled with an ever-increasing demand for bandwidth, this will be driving market growth in the next decade.
Flanigan concludes, "Operators must develop strategies for evolving WDM and optical networking throughout their networks. Telcos must boost capacity and avoid network congestion in the short term, and in the longer term, handle traffic more efficiently in the network, whilst driving down the cost of transmission. WDM is emerging as crucial technology for achieving these goals. "
About the report
WDM: Global Strategies for Next Generation Networks
is available from Ovum in October and costs ?1695 in Europe. Authored by Dr Barry Flanigan and Susen Sarkar, the report looks at the development of optical networking and the market drivers and inhibitors of WDM. The report contains market forecasts up to 2002 and is the result of nine months' intensive research. For more product information contact Ovum on Tel: +44 171 312 7318.
About Ovum
Ovum is an independent information technology and telecommunications analyst group, providing high quality, authoritative information and advice on key market, technical and regulatory developments. Ovum funds its own research and accepts no sponsorship from vendors or interest groups. Ovum's customer base comprises leading blue-chip organisations including suppliers, users and policy makers worldwide. With offices in Boston, London and Melbourne, Ovum currently employs 170 staff worldwide.
<<M2 PRESSWIRE -- 10/14/98>>
CONTACT: Lorraine Pitt, senior press officer
Tel: +44 (0)171 312 7265
e-mail: lep@ovum.com
Laura Parker, press officer
Tel: +44 (0)171 312 7238
e-mail: lmp@ovum.com
Daniel Matkovits, press relations manager
Tel: +1 781 272 6414 x 19
e-mail: dma@ovum.com
Kelly Treacy, public relations co-ordinator
Tel: +61 3 9606 0499
e-mail: kat@ovum.com
[Copyright 1998, M2 Communications]
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