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Data center investments leading to more spending on optical networking systems

By Max Burkhalter
July 26, 2012
Fiber-optic cabling technologies are increasingly popular in both internal and external network deployments, especially in light of the networking demands created by cloud computing and virtualization. The rise of the cloud is leading to a boom in data center development that is, in turn, leading to more optical network deployment. A recent Ovum study quantified this growth and identified the data center industry as a key driver for optical network component sales during the next few years.

Ovum found the long-term potential of the optical networking market is high, as the sector will experience a compound annual growth rate of approximately 5 percent between 2012 and 2017, bringing revenues to an annual total of approximately $20 billion in 2017. Ian Redpath, principal analyst in Ovum’s network infrastructure practice, explained that new data center projects and general trends in the data center sector are fueling optical network investments.

"The new bandwidth driver is data centers. Large-scale data centers continue to be built out - both the multi-tenant, carrier-neutral variety and private data centers," said Redpath. "The data centers are being placed in brand new locations, creating brand new optical networking demands. For example, the new Facebook data center at Lulea, Sweden, near the Arctic Circle, will require terabits of bandwidth. These new demands are not unique to Lapland - they are emblematic of a trend unfolding in multiple European and North American locations."

Ovum anticipates Latin America to be the greatest area of growth in terms of optical network market potential because the region is experiencing rapid modernization. This is leading to a boom in new data center construction in areas needing optical cabling installation to go along with the new facility.

Many experts also agree that internal fiber-optic cable deployment is also rising. Because cloud computing and virtualization partition physical hardware into virtual machines that communicate with each other frequently, not just with end users, the need for high-bandwidth functionality is becoming a key consideration within data centers. As a result, more operators are turning to internal optical networks in place of copper infrastructure.

However, copper still meets many internal networking demands. Because of this, fiber-to-Ethernet media conversion is emerging as a key tool because it allows organizations to pick and choose where they will use copper and where they will deploy fiber without having to make an either/or decision.

Perle has an extensive range of Managed and Unmanaged Fiber Media Converters to extended copper-based Ethernet equipment over a fiber optic link, multimode to multimode and multimode to single mode fiber up to 160km.


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