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DWDM in the metro loop takes off.

A potentially explosive new market is starting to emerge as metro optical network service providers take advantage of DWDM technology to layer onto one strand of fiber multiple types of data that typically do not work well in a shared infrastructure.

"DWDM in the metro has an entirely different value proposition than DWDM in the long haul," says JR Roedel, vice president of strategic development for GiantLoop Networks. "In the long haul, DWDM is about cramming a bunch of traffic all onto one fiber strand to get better fiber utilization. The fiber utilization issue still comes into play in the metro, but it is not as important to get a lot of traffic on it. It is important to get different types of traffic onto that same network."

Connecting data centers is a primary driver for the use of private optical networks. Roedel cites a recent example of a large financial institution that wanted to collapse disparate SAN networks across two neighboring states into one virtual SAN. The nonoptical option cost about $750,000 per month. The private optical solution, including fiber, equipment, and managed care and control services came to roughly $150,000 per month.

"DWDM is very important technology," says Roedel. "It is huge factor for driving down the cost of private optical networking. The DWDM technology allowed us to use one physical set of strands ... to move multiple channels of information to the same end points."

According to a recent report from Cahners In-Stat Group, the installation of new fiber in the long-haul market will slow, resulting in an annual decline of 12% predicted for 2001. In contrast, short-term sales growth is expected for DWDM equipment among the metro carriers. This represents a new market, one that did not exist as recently as 1999, and that reached about $900 million in the year 2000. By 2005, the market is anticipated to be worth nearly $21 billion per year.

Citing an end of first-quarter increase in companies considering metro optical networks, Roedel comments, "It seems to have changed from something that just early adopter players were doing, to include some mainstream companies." Roedel concludes from this that "the next 12 months should be a period of fantastic growth for optical to the enterprise."

The next step for this quickly emerging market is for companies to standardize their equipment and increase interoperability. "Right now, you have a very immature DWDM equipment market in the metro," says Roedel. "The next major challenge is what technology standards will begin to evolve."
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Comment:DWDM in the metro loop takes off.
Author:Peckham, Ray
Publication:Communications News
Geographic Code:1USA
Date:Sep 1, 2001
Words:420
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