HEAVY READING | VOL. 11, NO. 3, MARCH 2013 | METRO PACKET-OPTICAL TRANSPORT 2.

0: A HEAVY READING SURVEY ANALYSIS

VOL. 11, NO. 3, MARCH 2013
Metro Packet-Optical Transport 2.0:
A Heavy Reading Survey Analysis

The metro packet-optical transport systems (P-OTS) product
segment has grown from nothing in 2007 to more than $1.2
billion in equipment sales in 2012. However, because these
systems were not truly best-of-breed in both packet and TDM
functionality, and because packet technology itself was not ready
as a true replacement for TDM transport, the P-OTS market has
failed to live up to expectations thus far.

We are now entering a new "P-OTS 2.0" era that seeks to build
on the packet shortcomings of the first generation. As we enter
this new phase, P-OTS is finally poised to make the crossover
and unseat Sonet/SDH as the dominant form of optical transport
and metro and aggregation networks. In this new era, we expect
to see: 1) the focus of packet-optical shifts from TDM functions to
packet functions; 2) pure-packet implementations of P-OTS
begin to ramp and, ultimately, dominate; 3) switched OTN enters
the metro, removing the need for Sonet/SDH fabrics in new
elements; and 4) 100G takes hold in the metro.

As we enter this new metro P-OTS 2.0 phase, Heavy Reading
issued a global operator survey to get a better understanding of
operator plans, strategies, and perceptions regarding the present
state and future of packet-optical transport. This survey forms
the basis of this report.

AUTHOR: STERLING PERRIN, SENIOR ANALYST, HEAVY READING
KEY FINDINGS
Pricing is paramount
in metro packet-optical
transport
Other important
differentiators include
integration with Layer
2/3 packet networks
and superior OAM/
management abilities
The Sonet/SDH
MSPP era has clearly
and abruptly ended
The primary drivers
for metro P-OTS are
converged services
transport, P2P Ether-
net services delivery
and mobile backhaul
IP/MPLS is a serious
contender for metro
network architectures
of the future
Operators worldwide
most associate Ciena
with metro P-OTS
leadership, followed
by Cisco, Alcatel-
Lucent and Huawei
Operator interest in
OTN in the metro is
real, but uptake will
likely be less than
some suppliers predict
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HEAVY READING | VOL. 11, NO. 3, MARCH 2013 | METRO PACKET-OPTICAL TRANSPORT 2.0 2
Introduction & Key Findings
Heavy Reading has been tracking metro packet-optical transport systems (P-OTS) since 2007.
Since that time, the product segment (as defined by Heavy Reading) has grown from nothing to
more than $1.2 billion in equipment sales in 2012.

Heavy Reading believes that we are entering a new era of P-OTS, which we'll call P-OTS 2.0,
which seeks to build on the packet shortcomings of the first generation. Figure 1 shows that, as
we enter this new phase, P-OTS is finally poised to make the crossover and unseat Sonet/SDH
as the dominant form optical transport and metro and aggregation networks.

Figure 1: Metro Optical Revenue by Segment, 2010-2016

Source: Heavy Reading

In this new era, we expect to see the following:

The focus of packet-optical shifts from TDM functions to packet functions
Pure packet implementations of P-OTS begin to ramp and, ultimately, dominate
Switched OTN enters the metro, removing the need for Sonet/SDH fabrics in new elements
100Gbit/s (100G) takes hold in the metro

Heavy Reading conducted a global operator survey to get a better understanding of operator
plans, strategies and perceptions regarding the present state and future of packet-optical
transport. The survey was conducted in November 2012. Respondents were drawn from the
network operator list of the Light Reading readership database. A total of 114 service provider
respondents participated in the survey.

Figure 2 shows the breakdown of the 114 qualified respondents by the geographic location of the
company's headquarters.
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
2010 2011 2012 2013 2014 2015 2016
B
i
l
l
i
o
n
s

MS Sonet/SDH P-OTS Metro WDM
HEAVY READING | VOL. 11, NO. 3, MARCH 2013 | METRO PACKET-OPTICAL TRANSPORT 2.0 3
Figure 2: Respondent Breakout by Geographic Location (N=114)


Key findings of this report include the following:

Pricing is paramount in metro packet-optical transport. Few equipment suppliers lead with
this differentiating feature, but overall system pricing topped the list of differentiating features in
our survey by a significant margin. Heavy Reading has been saying for years that the funda-
mental mission of transport innovation is to reduce the cost per bit, and this survey finding
underscores that message.

In addition to overall pricing/cost, two other differentiating features rose to the top:
integration with Layer 2/3 packet networks and superior OAM/management abilities. The
emphasis on Layer 2/3 integration is consistent with the overall trend seen throughout this survey
that the future of P-OTS is in packets, not TDM. We note that the three lowest-scoring differentia-
tors were all about Sonet/SDH and TDM. Interestingly, OAM/management features scored signifi-
cantly higher than the "speeds and feeds" features by which optical suppliers typically describe and
market their products.

Converged services transport, point-to-point Ethernet services delivery (or E-LINE) and
mobile backhaul are the three primary drivers for metro packet-optical transport. In our
survey, switched Ethernet services, or E-LAN services, also scored high (3.84) and should also
be included as a significant driver, based on survey results.

IP/MPLS is a serious contender for metro network architectures of the future. Based on the
results, we cannot deny that IP/MPLS is set to play a major role in metro transport architectures
in the future. The definition of transport has broadened beyond OSI Layers 0 (WDM) and 1
(Sonet/SDH and OTN). As a result, carrier "transport" capex will increasingly be spent throughout
Layers 0-3. Equipment suppliers with little expertise in IP/MPLS must adjust to this reality either
by building IP/MPLS products of their own or by conceding a sizeable portion of the metro packet-
optical market to IP/MPLS competitors.

Operators globally most associate Ciena with metro packet-optical innovation and leader-
ship, followed by Cisco, Alcatel-Lucent and Huawei. Among North American operators in
particular, Ciena's leadership perception is extremely strong. In Europe, Cisco led the voting,
followed by a three-way tie for second among Alcatel-Lucent, Ciena and Huawei. Asia/Pacific
voting was led by Cisco and Huawei, followed by Alcatel-Lucent. In the rest of the world, Ciena
and Huawei tied for first, followed by a two-way tie between Cisco and Alcatel-Lucent. Notably
absent from the top rankings (even in North America) was Fujitsu, whose Flashwave 9500
system is the worldwide (and North American) metro P-OTS leader based on revenue.
North America
22%
Europe
33%
Asia/Pacific
25%
Rest of World
20%
HEAVY READING | VOL. 11, NO. 3, MARCH 2013 | METRO PACKET-OPTICAL TRANSPORT 2.0 4
Survey Analysis
Heavy Reading's Fall 2012 Metro Packet-Optical Transport Survey is organized in five
subsections: Drivers and Applications; Features and Functions; Adoption Timelines; Packet-
Optical Control Plane; and Vendor Leadership. This special report focuses on survey results
related to vendor leadership.

We make one important note on scope and definitions before delving into the results and findings.
While Heavy Reading has a specific definition for metro packet-optical transport systems (P-
OTS), we did not provide a packet-optical transport definition to operator respondents or restrict
them to any specific definition in responding to their questions. As a result, the survey reflects a
broader scope than metro P-OTS as covered in Heavy Reading's Packet-Enabled Optical
Networking Quarterly Market Tracker. Specifically, some operators view carrier Ethernet
switch/routers (CESRs) and multiservice edge/Ethernet Service Edge (MSE/ESE) platforms as
packet-optical transport, and some responses reflect these views.

As optical transport-centric products add more packet functionality and as packet-centric products
add more optical transport functionality (such as integrated DWDM optics) the lines between
previously distinct categories of products blur. This blurring is beginning to happen in packet-
optical transport and is reflected, to a degree, in our survey results.

Heavy Reading's metro P-OTS and CESR definitions are as follows:
P-OTS
These products converge DWDM transport, Sonet/SDH, large-scale packet switching and
connection-oriented Ethernet in a single chassis/device. Heavy Reading has created detailed
definitions for metro core/regional, edge/aggregation, access and core/backbone P-OTS. P-OTS
is alternatively referred to as packet-optical networking platform (P-ONP) or packet-optical
transport platform (P-OTP).
CESR
CESRs are platforms that meet two basic criteria: (1) they offer a comprehensive, or nearly
comprehensive, set of carrier-grade features required to support high-performance enterprise
Ethernet services, triple-play services and/or mobile-backhaul applications; and (2) their primary
purpose is to aggregate and/or transport Ethernet traffic. This category includes all carrier-class
Ethernet switches, some carrier Ethernet transport switches and some products described as
carrier Ethernet routers. We include certain Ethernet transport switches in our CESR category if
they have a packet-based fabric, provide multiple QoS options, offer full support of MEF-defined
services, include Ethernet OAM features, aren't based on a DWDM/ROADM platform and lack full
Sonet/SDH ADM features (e.g., UPSR/BLSR functionality).

Carrier Ethernet routers have the customer-facing characteristics of a carrier Ethernet switch and
some of the network characteristics of a service router. They use a combination of IP and MPLS
protocols (e.g., IS-IS, RSVP-TE and LDP) to create full mesh connectivity and then tunnel
Ethernet traffic through the MPLS network. But, like the carrier Ethernet switch, the primary (if not
sole) purpose of these platforms is to handle Ethernet traffic for enterprise, residential or mobile
backhaul applications.
Vendor Leadership
We asked operators about supplier leadership in metro packet-optical transport. To get a com-
prehensive and candid gauge of supplier leadership, we asked the following question in a free-
response format meaning that respondents could write in any company they wished, and as
HEAVY READING | VOL. 11, NO. 3, MARCH 2013 | METRO PACKET-OPTICAL TRANSPORT 2.0 5
many companies as they wanted. The survey question was: "Which supplier(s) do you believe
deliver the highest technological superiority and innovation in metro packet-optical transport
products?" In total, 76 respondents answered the question, and 18 different suppliers were
named. Figure 3 shows the results for the top scorers.

Figure 3: Worldwide Metro P-OTS Technology & Innovation Leaders (N=76)


Ciena led the voting with 28 votes, followed by Cisco at 22, Alcatel-Lucent at 19 and Huawei at
17. Infinera and Juniper tied for fifth, followed closely by Ericsson and Tellabs. Ten additional
suppliers were named, typically with one or two votes each.

There were a few surprises in the ranking. Ciena's leadership here is one surprise, as the
company is much smaller than Cisco, Alcatel-Lucent and Huawei. While Ciena is a market-share
leader in core networks, including 100G, the company is not at the top of the pack when measur-
ing metro market shares, including metro WDM. The supplier is focusing on metro packet-optical
integration and its messaging and innovation are clearly resonating with operators, even if this is
not yet reflected in market shares.

Looking at North America only, Ciena topped the list (by a large margin); 60 percent of all North
American respondents who answered this question cited Ciena as a leader. The North American
technology and innovation leadership ranking is shown in Figure 4.

Figure 4: North America Metro P-OTS Technology & Innovation Leaders (N=20)

0 5 10 15 20 25 30
Ciena
Cisco
Alcatel-Lucent
Huawei
Juniper
Infinera
Ericsson
Tellabs
Number of Votes
0 2 4 6 8 10 12 14
Ciena
Cisco
Alcatel-Lucent
Juniper
Tellabs
Infinera
Number of Votes
HEAVY READING | VOL. 11, NO. 3, MARCH 2013 | METRO PACKET-OPTICAL TRANSPORT 2.0 6
Ciena also led leadership scores among "Rest of World" respondents, which includes responses
from Latin America, the Middle East and Africa. Results are shown in Figure 5.

Figure 5: Rest of World Metro P-OTS Technology & Innovation Leaders (N=16)

0 2 4 6 8
Ciena
Huawei
Cisco
Alcatel-Lucent
Ericsson
Number of Votes
HEAVY READING | VOL. 11, NO. 3, MARCH 2013 | METRO PACKET-OPTICAL TRANSPORT 2.0 7
Vendor Profile: Ciena
Ciena is one of several vendors targeting packet-optical transport with multiple product lines.
Ciena's packet portfolio includes pure packet devices and P-OTS systems, scalable from 30G
transponder-based switching to terabit-scale centralized switching, managed via the single cross-
layer OneControl Unified Management system.

The 6500 comes to Ciena from the Nortel assets acquisition. Announced in late 2004, the 6500
made Nortel the first vendor to introduce a product into what became the P-OTS segment.
(Alcatel-Lucent's 1850 TSS line debuted in late 2005.) The product differs from Nortel's older
MSPP lines in many ways, including VT switching fabric size (80G on the 6500 vs. 10G on the
3500), the combination of Sonet and SDH in a single box and integration of DWDM transport. In
addition, the 6500 has added significant packet innovation over time since its initial offering of
MSPP-based packet aggregation.

Key to the 6500 P-OTS configuration is the Layer 2 Muxponder (L2 MOTR) card, scalable from
30G-60G, which was introduced in 2009. This module integrates packet switching and transport
functions in one blade. MEF-9 and -14 compliant, the L2 MOTR supports E-LINE, E-LAN and
EPL with failure state propagation. It also features G.8032 Ethernet Ring Protection, which offers
50ms resiliency in a packet-switched transport network. Traffic management capabilities include
policing, traffic shaping and class-of-service-based queuing and scheduling. Another aspect is the
ability to mate cards to offer higher capacity as well as protection options. Integrated capabilities
include transport-compatible OTN protection schemes, as well as OTN mapping onto integrated
photonics for extended reach applications. For 2013, the company is planning a next-gen version
of the card that will boost capacity 10x (120G-300G).

OTN was introduced across the 6500 line in 2011 (announced in June). Fabric-based OTN
addresses regional and metro core network applications in the 14-slot and 32-slot 6500 chassis.
Card-based OTN extends OTN to metro edge applications, in the seven-slot and two-slot chassis
version of the 6500. Included as part of the OTN introduction was the addition of Ciena's One-
Connect Intelligent Control Plane on the 6500 line (based on the software developed for the 5400
and legacy CoreDirector lines).

The fabric that supports OTN switching is a single packet/OTN fabric, operating at 600G in the
14-slot 6500 chassis and at 1.6 Tbit/s in the 32-slot chassis. Centralized packet switching was
introduced in early 2013. Looking further into 2013, Ciena plans to double the 6500 fabric
capacities to 1.2 Tbit/s and 3.2 Tbit/s per system, complementing Ciena's core switching products
that scale up to 15 Tbit/s.

Ciena's packet networking portfolio includes more than a dozen CESR and CEAP devices. Its
CESR portfolio consists of multiple service aggregation switches in the 5000 family, including: the
5410, which supports 1 Tbit/s of full-duplex switching capacity with future plans to scale to 4Tbit/s
announced in September 2009; the 5305, which supports copper and fiber 1G/10G for metro-
edge deployments generally available since June 2007; the compact 5140, which fits in outdoor
cabinets available since April 2009; and the compact 5150, which supports PBB-TE, MPLS, 48
GE ports, up to four 10GE ports, and is optimized for mobile backhaul and business services
introduced in May 2010.

Ciena's CEAP portfolio consists of the widely deployed 3000 family of service delivery switches,
with highlights including the 3930/3931, which is built for LTE backhaul, with two NNI SFP+ ports
that support 1GE or 10GE, four 100M/1GE SFP UNI ports and four dual-mode UNI ports; the
3916, with two NNI SFP ports that support 1GE, two 100M/1GE SFP UNI ports and two dual-
mode UNI ports; the 3940, with 24 1G user ports; the 3960, with four 10G and eight 1G ports; and
the 3902 single-port 1GE demarcation platform targeted for small businesses.