While optical DCI applications for disaster recovery and business continuity have been a well-established part of the DCI market for over 20 years, the past five years have seen a sharp rise in demand for optical connectivity to interconnect hyperscale data centers. In fact, a new market for high-capacity DWDM solutions has been created, primarily driven by the so-called FAMGAs - Facebook, Amazon, Microsoft, Google and Apple - and requiring different functionalities and characteristics compared to the traditional WDM markets.
Naturally, the industry's key analysts have begun to focus on market data for this segment. In 2014, Ovum were one of the first teams to analyze this market in more detail. As their data shows, FAMGAs or hyperscale ICP/CNPs, have initiated a race for density, low power consumption and smooth and simple operational processes. Due to their specific needs, these giants are eager to extrapolate their architectures, deployment and operational models from the server and storage world to the world of DCI.
The push for open hardware and control architectures is another result of extrapolating the hyperscale philosophy to the world of optical transmission, evoking the creation of open line systems with their integrated SDN-based programmability and control using open APIs. Today, there isn't a single optical system vendor who is not following this trend. The hyperscale DCI market for ICP/CNPs has evolved into a significant opportunity nobody wants to miss out on. Ovum estimates this market to generate USD 1.5 billion annually in 2020, which is more than 10% of the total amount spent on optical transport globally.
Each and every system and component vendor has now created a dedicated solution, pushing density, power efficiency and capacity on a single fiber pair to the limit. This race has reached a point where differentiating between the resulting 1RU systems is becoming harder and harder. There's no real-estate left to fit additional ports on the front plate, cabling is becoming challenging often consuming more space than the system itself, and capacities have reached close to 40Tbps per fiber pair.
And on top of this, with the levels of density and power efficiency that have been achieved, further advances are merely incremental, contributing little to the overall level of efficiency when deployed in hyperscale environments.
So, will this be the end of the industry's advances and will commoditization now kick in? Not quite! The industry's focus has turned to functionalities that go beyond hardware arrangements and power consumption. Operational aspects, continuous network visibility and security have become front and center for advances in optical connectivity, and there has been a lot of progress made with innovations in the field of system and network automation to simplify and speed up operations.
Zero touch provisioning concepts have been adopted, reducing initial provisioning complexity and efforts significantly. Complex manual or script-based configuration has been overcome by adopting intelligent routines utilizing end-to-end network visibility and by introducing new NETCONF/XML languages. Engineers can now configure systems much more intuitively with the help of agents running in the background and supporting their work.
Automating network maintenance as well as installation and turn-up requires access to telemetry information. Telemetry streaming is a core technology that enables network agents to be fully up-to-date with what's happening in the network at any time. In contrast to traditional network management architectures, information on the status of a network element is no longer retrieved selectively from the element but streamed immediately to a central agent, where big data techniques are used to analyze and trigger action. Only when compiling the entire set of information available, can the right decisions be made in real time.
Telemetry streaming can include a multitude of different parameter sets, all helping agents and routines to achieve the best possible network visibility. This goes far beyond service alarms and includes real-time information on local and remote optical links, including optical interface statistics as well as protocol-specific analysis and information about the security status of the network.
Finally, network security is crucial. While encrypting data in motion is a standard requirement for many BCDR installations, the demand for data security for hyperscale DCI networks has soared to an all-time high. New regulatory requirements and data protection obligations, the constantly increasing cost of data breaches and the general sensitivity to handling data in a more secure and protected way has fueled this trend. Encryption at the speed of light with up to 600Gbit/s per wavelength has become a requirement, driven by the ICP/CNP's customers' concerns and needs.
This increasing significance of hyperscale DCI shows no sign of slowing. The industry's major achievements in terms of density and energy efficiency receive much less attention today, even though they remain important. In deploying and operating WDM solutions over the past few years, ICP/CNPs are now pointing to new areas where optical systems can evolve to make their lives easier. True commoditization lies several years in the future - if it will be realized at all.