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January 30, 2008

CIR Expects 40 Gbps and 100 Gbps Broadband LANs to Generate $4.3 Billion in Revenue by 2016

By Anuradha Shukla, TMCnet Contributor

According to a new report from CIR, an industry analyst firm, the IEEE's (News - Alert) efforts to create 40 Gbps and 100 Gbps Ethernets will result in $4.3 billion in annual revenues by 2016. This report, about broadband networks that could be used for data or IP voice services, indicates that the initial demand for the new networking speeds will come from large data and switching centers. CIR believes that the impact of these new standards will be felt throughout the network.
The key findings in this CIR report include:
* The new Ethernet standards will bring an end to the "cold war" that has existed between the data communications and telecommunications industries since the 1980s. Ethernet will lead the way in terms of speed in future, and offer a high data rate formats available. The ITU will encapsulate these formats into its own Optical Transport Network which will gradually replace SONET/SDH. According to CIR, this new stability in the standards-making process will reduce the risk of investment in new chips and optical components needed for the next leap forward in networking to occur.
* The report indicates that the near-term potential for next- generation networks has increased considerably now that the 40 Gbps option has been introduced as it can be built with today's laser and modulation technologies and existing MSAs. Power users in large data centers high-performance computer environments and Internet exchanges who today are using 10 Gbps link aggregations (LAGs) are experiencing considerable pent up demand. CIR expects these users to make a rapid move to 40 Gig server ports once these become available. The market for 40 Gbps Ethernet is expected to reach $3.1 billion by 2016.
* The new Ethernet standards will impact every segment of the network from long-haul to interconnect. However, the initial demand thrust is expected to come from servers, which will account for just over 40 percent of the 40/100 Gbps Ethernet market by 2016. Currently, a lot of the current standards activity for next-gen Ethernet is being carried out with servers in mind.
* There will still be a need for 100 Gbps, especially for switch connections, which will represent half of the 100 GigE market in 2016.
* According to CIR, both components and modules firms are preparing for the next wave in networking. There is a new enthusiasm for InP based optical integration, a proliferation of new modulation schemes, most notably the recent introduction of PolMux DPQSK, and serious discussion of new MSAs, especially QSFP MSA, which the research firm believes is the most likely candidate for both 40 and 100-Gig transceivers.

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Anuradha Shukla is a contributing editor for TMCnet. To read more of Anuradha’s article, please visit her columnist page.

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