Data Centers To Drive ON Equipment Market

New data-center demands will boost sales optical networking (ON) equipment over the next five years.

That’s one of the findings in a new report from Ovum, which expects the ON market to reach $20 billion by 2017 a 5 percent compound annual growth rate.

Latin America will drive that growth as companies there modernize their networks and support mobile and broadband access network buildouts. North America is expected to exhibit solid growth as tier-1 network operators embrace new 100G technology to meet growing data center needs. In Asia-Pacific,  growth will continue, Ovum says, but not as quickly as it has been, cooling off after five years of torrid growth. The EMEA market is expected to expand, despite the current economic problems there, due to deployment activity in Russia, the U.K., Eastern Europe and Africa.  

The new bandwidth driver is data centers. Large-scale data centers continue to be built out both the multi-tenant, carrier-neutral variety and private data centers,” said Ian Redpath, principal analyst in Ovums Network Infrastructure practice. The data centers are being placed in brand new locations, creating brand new optical networking demands. For example, the new Facebook data center at Lulea, Sweden, near the Arctic Circle, will require terabits of bandwidth. These new demands are not unique to Lapland they are emblematic of a trend unfolding in multiple European and North American locations.”

 All told, the global optical network market is at a very interesting point in its evolution. New demands are arising just as the industrys latest technology offering is coming to fruition,” said Redpath.  

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