Fiber Optics News

Who Will Win And Lose In The Metro Core Optical Market.

This is Part I of a three-part series on the metro core optical market, based on interviews and data from the consultancy Communications Industry Researchers. This week: Primary Equipment Suppliers/Traditional Solutions. Coming Jan. 7: Vendors with Ethernet-based Solutions, and Jan. 14: The God Box Complex and Other Issues

Many companies are hoping to capitalize on what should be a very lucrative metro core optical networking market - but not everyone will.

In a new report, Charlottesville, Va.-based Communications Industry Researchers (CIR) takes its best shot at picking the winners and losers in this market, which CIR projects will grow steadily from about $1.6 billion in 2001 to more than $2.5 billion in 2005. CIR says the principal winners of this market will be incumbent suppliers of legacy gear, in particular SONET-based devices.

Cisco [CSCO] will be the vendor of choice in the next-generation SONET ADM market. Cisco has sold more than 30,000 of its ONS 15454 product line, has recently completed Telcordia's OSMINE process that RBOCs require, and attained price per port levels that are a huge competitive advantage.

CIR analyst David Gross, one of the authors of the report, says the market has embraced Cisco's strategy that simplicity and low price will beat out sophisticated and proprietary technology.

"Here is a platform that has more than 700 customers and not one is an RBOC," Gross says. "But it has completed OSMINE certification, and the feedback that we got from RBOCs is that the product is generally strong. The 15454 is really the big, giant competitive platform that startups are going to try to compete with. A minor element in Cisco's success comes from their aggressive financing of CLECs, but the product would have been successful without that."

There are a few factors Cisco must be wary of. Being first to market means that other competitors may use lower-cost ASICs to give Cisco a run for its money. It also remains to be seen how much Cisco can leverage its SONET base to offer metro DWDM gear.

Another company that bears watching is ONI Systems [ONIS], since it is also generating significant interest from RBOC accounts. …

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