With OFC 2019 rapidly approaching, due to start on March 3, 2019, a number of industry themes are crystallizing that will garner substantial interest at the conference.
400G will have a central role in the long-haul transport, metro data center interconnect (DCI), and the inside data center, intra-connect markets. The high-performance, coherent digital signal processor is the engine and the key competitive differentiator for the long-haul transport and subsea segments. The systems vendors will provide updates on the development and commercialization progress for their marquee assets.
The metro DCI and data center campus interconnect consists of a number of smaller submarkets: single wavelength connect, direct detect, and space-power optimized coherent. Ovum expects to hear progress updates on all of the submarkets as the transition to 400G begins.
For the optical fabric inside the data center, the road to 400G is paved with a dizzying proliferation of approaches. Three fundamental constructs provide context to an array of proposed solutions: time-to-market versus long-run high volume, distance subsegments, and preexisting fiber-plant-deployed solutions.
The industry is constantly wrestling with quick time-to-market solutions versus the long-run high-volume solutions. The latter are typically more technically elegant with a greater potential for superior performance, but research and development challenges need to be overcome. The time-to-market solutions typically leverage proven technology, but may have more discrete, constituent parts. The leading edge of the market is pushing toward 400G but, for some, 200G may be a stop along the way.
The second factor that drives the proliferation of solutions is distance. The short reach inside the data center market spans between 100 meters and 2km, with a number of segments in between. Vertical cavity surface emitting lasers (VCSELs) still loom large in the "up to 100 meters" portion of the market. Silicon photonics–based solutions have potential in the "up to 1km" distance as the technology establishes a track record. The third factor that drives complexity is the preexisting fiber plant within the existing operational data centers: single mode or multimode.
The data center operators are heading toward a very classic telecoms-style problem. The allure of minimizing capex for ever-finer segments of the business will increase equipment types and operational complexity. For the vendors, the grand prize is always the high-volume solutions, but the market start and ultimate form can be an elusive moving target. Money can be made on time-to-market solutions but fewer customers pursue intermediate solutions when the end-game is in sight.
The industry is in the midst of a wave of mergers. Differing types of mergers have been occurring: mergers of system and component vendor peers and vertical integration mergers. We expect updates on the progress of the merger activity in the form of new consolidated product roadmaps.
The 3D-sensing market is broadening from a smartphone-consumer market to include more industrial applications such as automotive. The market is in its infancy but has much potential. Ovum expects to hear more on the efforts to leverage well-established communications technologies and manufacturing expertise in the emerging application space.
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