40/100GbE Market Will Begin to Take Off in 2010

According to a new report from CIR, an industry analyst firm, the market for 40/100 Gigabit Ethernet products will begin to take off in 2010. The latest CIR projections, which are provided in detail in the report titled, 40/100 GigE Markets: 2009-2013, show that revenues from 40/100 GigE transceivers will reach $ 482 million in revenues by 2013.

Findings from the report:
The economic downturn will not delay early adopters of 40/100 GigE as companies such as Google and Amazon have a ‘desperate need’ for 100G connections today. And, although the current economic situation is having an impact on carrier network upgrades, scaling carrier networks to 100 Gbps will now only be accomplished using a 40/100-Gbps variant.

A handful of firms have the opportunity to shape the future of 40/100 GigE. These include Cisco, Juniper, Sun Microsystems, Force10, Nortel at the OEM level; JDSU, Finisar, Avago, Luxtera and Opnext at the transceiver level. At the component level there is Xilinx, Altera, IBM, LSI, Gennum, AMCC, Vitesse and Broadcom.

The adoption of 40G Ethernet will occur first in high end servers and High Performance Computing applications. Within the 40GigE environment, initially as much as 80 percent of the market will be accounted for by the SR4 version of the 40/100 GigE standard. However, the SR4 version is expected to lose share to CR4 over time as 40-Gbps-over-copper becomes more viable. The CIR expects both CR4 and SR4 to quickly lose share once serial 40GigE becomes a reality in 2014.

100G Ethernet will be adopted in the core of the network, driven by growth in 10GigE server connections and access points. As 100GigE begins to generate revenues in around 2012, CIR expects the LR4 variant to account for maybe half the market, with SR10 taking another 20 percent of the market. However, improvements in copper technology should drive CR10 share of the 100 Gbps space to 25 percent or so by 2016.

The initial solutions for the 40G Ethernet CR and SR variants will rely on existing technology leveraged from InfiniBand which should give vendors a faster time to market and reduced R&D costs. The ability to produce low-cost VCSEL arrays will be especially critical to success in the SR markets. The highest investment in new technology will come from the 100G LR and ER variants which require new 25G technology for the electronics and the optical components. This will include lasers, modulator drivers, PIN diodes, TIAs and SERDES technology.

About the Report:
CIR has been covering the 40/100 GigE since its inception and this is the firm’s third report. 40/100 GigE Markets: 2009-2013 offers a realistic assessment of where the opportunities are likely to be in a near term economic environment in which both IT spending and carrier CAPEX are under pressure. The report also addresses which applications and systems will be the first to need 40/100 GigE and how big will that demand be, how 40/100 GigE will play out in the metro and long-haul networks as well as in the data center. This new CIR report also discusses the most likely technology roadmap for the first commercial 40/100 GigE products with coverage of transmission formats, MSAs and the 40/100 GigE strategies of leading firms active in this space.