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To: signist who wrote (10947)	10/25/1998 2:04:00 PM
From: Jack Colton	Respond to of 42804

Research released by independent telecoms analysts, Ovum Inc., reveals that market hype is currently running ahead of market reality in Wavelength Division Multiplexing (WDM)*. Analysts are concerned that equipment vendors are exaggerating product capabilities and market size in order to cash in as telcos prepare networks for the next century. Analysts at Ovum expect the global market for WDM to exceed $8 billion by 2005. The findings come in a new report from Ovum, WDM: Global Strategies for Next Generation Networks. According to Dr. Barry Flanigan, senior analyst with Ovum Inc. and worldwide authority on broadband networks, "The main driver for WDM today is the need to increase network capacity and relieve fiber network congestion. This is a result of the explosion in telecoms traffic, particularly data. But WDM is also part of a bigger story - the transition of telecoms networks towards all-optical networking technology. This has profound implications for how next generation telco networks evolve, dramatically impacting the cost of transmission and the development of high bandwidth services." Ovum cautions that much work remains to be done before the benefits of all-optical networks are realized. Dr. Flanigan continues, "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." Ovum points out that there are still significant barriers to overcome as WDM technology evolves over the next decade: -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 standardization process which is hard pressed to keep pace with market developments- -Proliferation of proprietary systems are making interworking between networks and vendors difficult- "The WDM supply market is currently undergoing great change," says Dr. Flanigan. "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. An understanding of the whole network and not just WDM will be a key success factor for vendors. We anticipate a large number of 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. But improvements in the price and functionality of WDM will make it cost effective to consider deploying WDM on shorter distance links in metropolitan and access areas of the network. Coupled with an increasing demand for bandwidth, this will drive market growth over the next decade. "Operators must develop strategies for evolving WDM and optical networking throughout their networks," concludes Dr. Flanigan. "Telcos must boost capacity and avoid network congestion in the short term. Longer term they must handle traffic more efficiently in the network at the same time as driving down the cost of transmission. WDM is a crucial technology for achieving these goals."