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Cloud datacenters continue to surprise the industry

LightCounting releases High-Speed Ethernet Optics Report

 

 

It is an exciting time for the industry!  Starting with early sales of 10GbE SFP+ optics to Google in 2007, the global demand for high-speed optics surged in 2010-2016. Volume shipments of 40GbE optics exceeded 3 million units in 2016 with 78% shipped to Cloud customers. Shipments of 100GbE optical transceivers are likely to reach 3 million units in 2017, exceeding our previous forecast by 20%.

Our forecast for shipments of 100GbE transceivers in 2017 was partly based on estimates for manufacturing capacity of leading suppliers. Many of these vendors were able to ramp their production faster than expected and several new vendors started shipping 100GbE modules in 2017. Leading customers for 100GbE products are planning to double and possibly event triple their purchases in 2018. It will be another busy year for suppliers trying to catch up with demand and make a profit. Reflecting this situation, we increased projections for shipments of many 100GbE products in 2018. This also impacted our longer term projections, including our forecast for 400GbE optics.

LightCounting’s forecast methodology includes correlation between the growth rates of the aggregated bandwidth of optical connectivity inside datacenters and the datacenter traffic. Amazon, Facebook and Google indicated that traffic in their mega-datacenters increased more than 100% in 2016 and it is likely stay at this rate in 2017. Data collected by LightCounting on shipments of optical transceivers to these vendors is consistent with close to 100% per year growth in traffic.

Figure below presents LightCounting data and forecast for the growth rate of bandwidth of optical connectivity inside Cloud Datacenters, showing a sharp increase in 2016-2017. The figure also shows projections for traffic growth inside Cloud Datacenters published by Cisco in 2016. The discrepancy between the curves illustrates how the industry underestimated the impact of mega-datacenter operators on demand for optics.

Figure: Growth rate of traffic and bandwidth of optical connectivity in Cloud Datacenters.

Source: LightCounting

The roadmap beyond 100GbE remains uncertain. Too many directions to choose from. Our report offers a detailed analysis of this situation, including forecast for several categories of 200GbE and 400GbE transceivers.

Goggle is very clear their next speed will be 200GbE. However, Google wishes to deploy 200GbE ports in 2x200GbE module in the OSFP form factor. This makes sense in that a “400GbE” switch with 32 OSFP ports will provide 64 200GbE connections. By doubling the radix of their switches, Google will likely save one tier of switching.

Microsoft and Facebook have said publically they don’t want 200GbE.¬† AWS is less public but pushing hard for 400GbE. They all want 400GbE as their next speed. Facebook’s 400GbE strategy is changing. Previously, they prioritized 400G-FR4 MSA modules to deploy 400GbE. Their new architecture will mostly use 400G-DR4 QSFP-DD modules in breakout mode to 1x100G modules, which does not require a 400GbE MAC. This approach enables higher front panel density and 4X higher radix switches than will be possible with a 400GbE architecture. This means less tiers of switching, less latency and other benefits. They will also be using 100Gb/s lambda technology once it becomes available.

More information on the report is available at: www.LightCounting.com/Ethernet.cfm

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LightCounting is a leading optical communications market research company, offering semiannual market updates, forecasts, and state-of-the-industry reports based on its analysis of primary research with dozens of leading module, component, and system vendors as well as service providers and other users. LightCounting is the optical communications market’s first choice source for the accurate, detailed, and relevant information necessary for doing business in today’s highly competitive environment. For more information, visit: www.LightCounting.com or follow us on Twitter at @LightCounting.