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.
"The leaders in our 2015 optical scorecard--Ciena, Cisco and Infinera--are focusing on one of these markets or have the necessary scale to address both with independent solutions," said Andrew Schmitt, research director for carrier transport networking at IHS.
According to Schmitt, Ciena is the second-largest WDM optical equipment provider. The company was able to gain market share in 2014 and also made progress in the packet-optical transport domain.
Cisco, meanwhile, remains strong because of its "bulletproof" balance sheet and excellent customer perception, Schmitt said. In addition, Cisco has first-mover advantage in integration of the IP and optical layers.
Meanwhile, Infinera has become strong with Internet content providers and the data center interconnect market, mainly due to outstanding customer perception, large market share gains and tight finances.
Schmitt also notes that Alcatel-Lucent (NYSE: ALU) could reverse its multi-year decline in the market thanks to the company's Shift plan that it is implementing. The Shift plan calls for the company to reduce its costs and also look at non-traditional customers for new business opportunities.
Huawei, meanwhile, faces continued challenges. Schmitt said that while the company has huge market scale and R&D budget, its size prevents it from growing rapidly and its core base of Chinese customers have so far not adopted packet-optical solutions, which has slowed the company's momentum in this area.
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