Until recently, optical networking was the province of long-haul carriers, providing high-speed backbone routes across continents and countries, but out of reach, in financial and technical terms, of corporate network managers.
No longer. Optical networking is burgeoning in areas much closer to corporate networking. IBM recently signed a big deal for optical chips; Cisco and others are producing optical routers; the first all-optical metropolitan network was recently announced by ONI Systems and carrier Colt Telecom; Lucent has signed a number of high-profile deals to build optical networks in Italy and Russia; and US carrier Global Crossing is building a pan-European optical backbone network.
Why is this important for corporate networks? Because network managers are victims of their own success: as network use continues to grow dramatically, so bottlenecks are appearing. Everyone is looking for faster, cheaper, more reliable networking, not just for long-distance traffic, but for internal networks and between corporate sites. Lucent's optical networking system, for instance, provides speeds of up to 40 gigabits per second - four times faster than existing systems. At that speed, you could send eight million, one-page emails a second.
Jonathan Waldern, president and CEO of optical component manufacturer DigiLens, predicts that within a couple of years, all-optical networks will take off as broadband technologies such as Digital Subscriber Line (DSL) finally roll out. "When broadband is deployed, the only solution will be optical," he says. "The issue is not whether, but when."
The problem posed by broadband, and which optical technologies may help solve, is the gap between the huge demand for high bandwidth over long distances, driven by growing Internet use, and getting that bandwidth into local and city areas, where it can be accessed by corporate buyers.
A number of companies are working to build the equipment that will help bridge the gap, especially routers to handle high-speed optical traffic. These, in turn, depend on the development of cost-effective optical components, without which optical networking will remain too expensive for all but a few users.
"The new optical chips are small, low-power, low-cost components," says Waldern. Because of the huge capital investment in plant required, only a handful of companies make these chips, but Waldern believes they will power the roll-out of all-optical networks.
At the heart of all optical networks are the fibre-optic channels over which traffic can be driven for long distances at high speed. The top speed for data running over a single optical channel is about 10Gbps but greater speeds can be obtained by dividing up a single optical cable into a number of channels - you can get up to 160 wavelengths on a single fibre - providing vast, high-speed capacity which service providers are using for their next generation of backbone networks.
The great advantage of optical backbones will come from the ability to split the optical channels using dense wave division multiplexing (DWDM). Providers will 'turn on' bandwidth for customers simply by connecting them to the existing fibre-optic network rather than having to lay new cables. In theory, this process, known as dynamic provisioning, should let providers supply users with extra bandwidth in hours rather than weeks or months.
So what will push corporate buyers towards optical networking? George Georgiou, enterprise marketing manager at supplier Siemens Network Systems, believes storage is a big driver. Here, too, dynamic provisioning will be a major asset. "A lot of financial users are buying dark fibre and using DWDM boxes to extend storage capacity," says Georgiou. By setting up optical storage at remote locations and optical links to those sites, users get storage facilities that are faster, safer and cheaper.
Georgiou acknowledges that only the biggest corporates are likely to buy optical networks at the moment because of the cost, but he says the greater speed and capacity of optical systems make for a better return on investment than leasing standard lines from service providers.
"The price of bandwidth is dropping by between 30% and 50% a year and there is a lot of pent-up demand," says Vip Syngal, market development director at Nortel Networks, which is selling backbone optical networking kit that transmits up to a terabit of data a second. Syngal says demand for faster optical networking in metropolitan areas is in turn driving demand across greater geographic distances, which is why the carriers are upgrading their backbone networks.
But all this can present problems at the edge of the network, where optical networking meets copper, according to Mark Weeks, European VP of network company ASC, which focuses on giving copper more capacity. Weeks says the speed increases in the core optical networks create bottlenecks at the edge. "You have to interface between the copper and the fibre," he says. "There still has to be an on/off ramp to that marvellous shiny optical network."
This was first published in February 2001