Home / Metro WDM market poised for growth says IDC

Metro WDM market poised for growth says IDC

According to IDC, storage area network (SAN) extension projects and demand for Gigabit Ethernet services is fuelling growth in the metro WDM market.

Although the dense wavelength division multiplexing (DWDM) market is continuing to languish, there are signs of a shift towards metro WDM. According to IDC, the demand for the ‘early stage,’ next generation optical equipment segment is expanding at 25.3% compound annual growth rate (CAGR).

The analyst group predicts the market will grow from US$484 million in 2002 to $1.5 billion by the end of 2007.

“Vendor and industry attention is increasing in metro WDM,” says Sterling Perrin, senior research analyst in IDC’s Optical Networks program.

“Although metro WDM will not compensate for the sharp drop that vendors have experienced in their long-haul and legacy lines, it will be an important growth opportunity within optical networking,” he adds.

Gigabit Ethernet services and storage area network (SAN) extensions are key applications driving the demand for metro WDM networks.

Carriers are increasingly deploying metro WDM equipment as infrastructure for Gigabit Ethernet service offerings to end user. Furthermore, metro WDM kit can be used to offer managed wavelength services to customers for carrying their storage traffic across metro areas.

Business continuity and disaster recovery applications, in part prompted by security considerations, are also driving the enterprise SAN extension deployments.

IDC is also predicting that fibre relief—the initial driver of metro WDM deployments—will also remain an important application, but its dominance will diminish over the next five years.

The collapse of the CLEC bubble and the shift in spending back to incumbent carriers are the biggest reasons for the change. With far fewer green field network builds there is less need for WDM as an alternative to fibre in the metro core.

Moreover, general capital constraints and the focus on 'success-based builds' favour the applications, such as Gigabit Ethernet and SAN extension, that are closer to the customer and closer to revenue.

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