Making Sense of Metro DWDM, Part II
By: Lawrence Gasman, <%=company%>
Driven by the usual experience curve, Moore's Law, and mass production, the cost of metro dense wavelength division multiplexing (DWDM) systems will come down enough over the next two to five years to become economically attractive for many service providers. Vendors will no doubt resolve most technical issues in that time frame. These changes alone will result in a significant penetration of the metro area of service provider networks by DWDM.
While the cost reduction impact of DWDM is paramount to the technology's success today, the economics of metro DWDM will change as service providers begin to regard the technology more as a potential revenue generator. This could occur in two ways: Using DWDM as a multiservice platform, and using DWDM to deliver just-in-time bandwidth.
Serving as a multiservice platform, DWDM enables service providers to offer corporate customers a mix of services over a single fiber, but with each service running over a different wavelength. Combined with optical cross-connects, DWDM could deliver bandwidth dynamically, serving the needs of users such as ISPs and large financial institutions that want to buy bandwidth at off-peak rates. It could also serve the needs of a more general class of users that may want OC-48 to a Web server for some special event, such as a major sale.
Evolution
The introduction of metro DWDM is most likely to occur in evolutionary fashion. The first stage of this evolution retains synchronous optical network (SONET) equipment as a major part of the solution. DWDMs would serve customer premises SONET ADMs. As bandwidth demands by customers begin to increase, DWDM terminals would replace SONET ADMs with services provisioned directly over the optical layer in the second stage of evolution.
This evolutionary progression from SONET to DWDM in the metro environment will help boost the DWDM market significantly. But a more revolutionary change will occur as service providers learn to use DWDM in the metro area in conjunction with optical cross-connects to offer just-in-time bandwidth provisioning, or bandwidth-on-demand.
In theory, optical cross connects that route wavelengths from one fiber to another, when combined with metro DWDMs, could enable service providers to assign an OC-48 to a customer in seconds. If a significant market for such services emerge, it could ultimately prove the death for SONET serving the large business customer. However, it will be several years before OC-48s begin to sell en masse, and SONET will probably have lots of other work to do if it is forced out of this part of the network.
Displacing SONET
DWDM poses no short-to-medium term threat to SONET equipment in this segment of the network. SONET will continue to grow at the expense of T-carrier. However, as bandwidth demands from large business users and other service providers put competitive pressures on service providers to provision very high bandwidth pipes rapidly, SONET deployment may wane.
Current SONET architectures will not easily support the future demands for OC-12s (622 Mb/s circuits) by larger customers, because deployed SONET rings are already quite busy. To meet demand for OC-12s, service providers must either build a new customer ring from scratch, which usually takes more than six months, or merely upgrade SONET equipment, which still takes several months.
DWDM apparently offers an alternative to such delays. DWDM rings from the central office offer much higher data rates to the customer premises than stand-alone SONET add/drop multiplexers (ADMs). Carriers can also install DWDM at the customer premises and equip the system with cards that allow customers to add or drop wavelengths that can carry much higher data rates than conventional ADMs. Thus metro DWDM will enable service providers to be much more responsive to the needs of their largest customers.
Provisioning power
Rapid provisioning will be a key to success in the high end of the market and may serve as a distinguishing feature for competitive local exchange carriers (CLECs) and ISPs aiming at the more sophisticated user. It may take two or more years before the demand for rapidly-provisioned bandwidth has a significant impact on network equipment deployment, but the capability could be crucial for DWDM to displace SONET in the metro area. As SONET deployments continue to grow in the near term, that displacement will occur slowly. But in the coming provisioning wars, DWDM architectures will emerge as a more formidable weapon than SONET.
Given that DWDM appears to offer service providers new value-added revenue generation potential, deployment of the technology will accelerate. DWDM vendors will begin to make a value-added pitch of their products to service providers as more than just an alternative to putting in more fiber and SONET/ADMs. We are still a long way from all-optical networks, but the new metro DWDM platforms are a significant step towards the optical future.
Lawrence Gasman is President of Communications Industry Researchers of Charlottesville, VA. He can be reached at: ldg@cir-inc.com.