As telecommunications carriers continue to build next generation infrastructure to accommodate increased network traffic and higher-bandwidth applications, they will increasingly turn to optical cross connect (OXC) equipment.
New analysis by Frost & Sullivan reveals that total revenues reached $336 million in 2001, and forecasts robust growth beyond $6 billion by 2006.
While other optical networking equipment market growth has been sluggish, the optical cross connect market will grow exponentially. Optical cross connects are capable of 10 to 20 times the bandwidth of traditional equipment.
‘Optical cross connect systems (OXCs) are the ultimate bandwidth productivity tool,’ says Frost & Sullivan Program Leader Mark Storm. ‘The technology dramatically reduces capital and operational expenses, while increasing network manageability. Optical cross connects systems’ undeniable cost-saving benefits are attracting carriers that have reduced budgets to sustain profitability.’
While many analysts in the industry have forecasted this market to reach between $15 billion and $20 billion, Storm advises industry participants to take a more conservative approach.
‘The promised benefits of optical cross connects have been hyped-up and overestimated during the last several years,’ says Storm. ‘Previous forecast estimates will not be realised, despite the true growth that will occur over the next six years.’
However, the optical cross connect market will grow at the expense of other market segments. Service providers are transitioning their network from equipment types widely deployed in the 1990s, including traditional synchronous optical network (SONET) and synchronous digital hierarchy (SDH) systems.
Providers are moving toward next generation systems, designed for multi-wavelength networks, including optical cross connects, dense wavelength division multiplexing (DWDM), and data-aware SONET and SDH equipment categories.