WDM vendors like Alcatel-Lucent, Ciena and Cisco will continue to see revenue benefits over the next four years as more service providers upgrade their metro networks, a segment that Dell'Oro says will grow at a 10 percent CAGR. Demand for metro WDM capacity will drive up the overall optical transport revenues to $15 billion by 2019.
Although the optical equipment market is becoming increasingly fractured between companies that are focused on one of three markets--traditional service providers, competitive service providers or Internet content providers--three companies are leading the way. According to the 2015 IHS Infonetics Optical Network Hardware Vendor scorecard, which profiles the top vendors in this space, Ciena, Cisco and Infinera have the strongest market presence and momentum.
A top Cisco executive sees a host of ongoing opportunities to equip its service provider customers with 100G optical switching and optical gear. Speaking during the Cisco Financial Analyst day, Kelly Ahuja, SVP, Service Provider Business, Products and Solutions for Cisco, said that they are seeing more of its service provider customer base migrate their core and optical networks to 100G.
Ciena's move to diversify its customer base beyond large Tier 1 service providers like AT&T and Verizon continued to pay off in its fiscal second quarter of 2015 as revenues rose year-over-year to $621.6 million.
If Ericsson were to purchase Ciena or Juniper, the argument is that it could bolster its lagging wireline portfolio, but one Citigroup analyst says that neither deal is likely to happen.
With Nokia's recent move to acquire Alcatel-Lucent in full play, Ericsson is now looking at its own purchase options, which, reports say, potentially could include Juniper or Ciena.
Global optical network hardware spending rose 5 percent in the first quarter of 2015 as EMEA began to show signs of recovery and North American web-based companies continued to enhance their optical networks, according to IHS Infonetics Research.
Electric Lightwave, Integra's wholesale and large business services arm, is serving up a new 100G managed optical Spectrum service that it says will serve as an alternative to a wholly-owned dark fiber solution.
Ciena is moving to acquire Cyan for $400 million in cash and stock, a deal that will enhance the vendor's ability to respond to emerging demands from carriers to provide virtualized on-demand services for customers by using a mixture of software defined networking and network functions virtualization.
Speculation over Ericsson's future strategy has intensified following Nokia's announcement this week that it plans to buy Alcatel-Lucent, with some saying the Sweden-based vendor will be forced to expand its fixed-line business.