Passive Optical LAN offers lower maintenance, operational costs, but analysts says larger vendor presence will advance market

Passive optical LAN (POL) technology is showing promise of greater bandwidth with a future-proofed architecture that surpasses copper-based LANs, but analysts say what will help it grow will be the entry of larger vendors.

A recent Building Services Research and Information Association (BSRIA) study, says that POL needs a number of larger vendors to jump on board to drive it into a larger market opportunity.

"For the short term, POL will continue to be a market driven by smaller players," said Martin Chiesa, senior researcher for I.T. cabling and related technologies at BSRIA, in a marketing brief. "The market will expand at double digit rates, but will only really take off when a big player or several medium sized players enter the market with a clear go-to-market strategy – as opposed to a me-too approach – or there is a greater awareness among specifiers and the relevant parties."

Regardless of the early stages of the market, BSRIA proclaims that POL is becoming a threat to copper cabling in LAN applications.

POL provides a number of benefits over copper-based solutions, particularly in terms of capex as these products have longer replacement cycles, require less power and a single access point.

Vendors such as Nokia (NYSE:NOK), Tellabs, and Zhone are lining up with new solutions for enterprises that want to take advantage of POL.

Nokia, via its Alcatel-Lucent subsidiary, recently debuted its POL solution.

However, Nokia did not have to look too far to create it. The solution set leverages its existing GPON ISAM platforms -- 7360 ISAM FX fiber platform and the 7368 ISAM ONT fiber termination points. It also includes the 5571 POL command center (PCC) intuitive management system.

In order to appeal to potential customers in Asia-Pacific, Nokia has struck a partnership with IBM and KDDI. IBM will serve as a systems integrator by deploying and maintain POL system contracts Nokia wins in the region.

Ana Pesovic, fixed networking marketing lead for fiber at Nokia, told FierceInstaller that a number of vertical markets ranging from the federal government, sports arenas, health care and hospitality are looking more closely at POL.

"The addressable market for passive optical LAN is very big," Pesovic said. "POL is emerging as a new market trend as there's a challenge for traditional LAN solutions to increase the capacity in order to enable the introduction of a new generation services like cloud, Wi-Fi, and bring-your-own-device."

Pesovic added that in a copper-based LAN solution, a bandwidth upgrade requires a change out of all of the wiring and equipment.

"In order to increase the capacity with traditional LAN solutions, you need to change all of the existing cabling and replace the switches, which is typically done every 6-7 years," Pesovic said. "When the organization needs to do that kind of investment, they throw out the cables and put in the new one and replace the switches, but passive optical LAN breaks the traditional upgrade cycle."

Nokia claims that POL can reduce opex for enterprises that deploy it in a relatively short period.

The company's Bell Labs R&D division conducted a business case study comparing a traditional copper-based LAN to passive optical LAN that took consideration over 100 parameters, including cost of installation, cost of copper, and cost of new switches. Depending on the size of the building, in some cases the savings could be up to 50 percent in capex and 50 percent in opex.

"It means that just in the first year you get savings in putting POL in place and then every year there's recurring cost savings in operations," Pesovic said.

One of the big savings will come from less power. Since the POL systems are passive, there's no equipment between the ends of the network that needs to be powered. A POL system can save about 40 percent on power.

"In a traditional LAN environment, the switches need to be powered, they need an enclosure, but this active equipment is replaced by a passive splitter," Pesovic said. "This passive splitter is small and can be put in the ceiling, wall or the floor and there's no maintenance and power supply."

Besides power, the other benefits of POL are a reduction in floor space and maintenance.

"You can use the floor space to do something more useful for your business," Pesovic said. "The third main contributor to savings is maintenance because passive optical LAN has only one central access point to be maintained and updated and everything else like the customer premises ONT equipment don't require any upgrades."

Joining Nokia is Tellabs, a vendor that's been gaining momentum particularly with federal government agencies like the Department of Defense (DoD).

In March, Tellabs completed another round of the DOD's JITC testing for its Optical LAN (OLAN) GPON software and hardware. This System Release 29 (SR29) JITC certification means it has become a preferred solutions provider to the U.S. armed services and federal government.

Along with an emerging cadre of vendor solutions, new and emerging standards are also going to help advance the POL market with various speed profiles. Under the current ITU-T POL (ITU-T G.984) standard, equipment can deliver 2.4/1.2 Gbps speeds.

With the next generation (ITU-T G987) standard that's expected to be released this year, users will be able to get symmetrical 10 Gbps. Looking beyond 10 Gbps, the ITU-T is also setting the foundation for a future 25 Gbps and 100 Gbps POL standard.

For more:
- see this APOLAN release
- here's Nokia's release

Related articles:
AT&T simplifies PON, Ethernet installation processes, sees communities' FTTB demand growing

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