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The Rise of Optical

Data Center Networks

#OpticalDCI

An Infonetics Research / IHS Webinar Co-produced with Infinera

This Webinar Will Begin Shortly

The Rise of Optical


Data Center Networks

#OpticalDCI

An Infonetics Research / IHS Webinar Co-produced with Infinera

Todays Speakers

#OpticalDCI

Andrew Schmitt

Dr. Stuart Elby

JoAnne Emery

Principal Analyst, Optical


Infonetics Research / IHS

SVP, Data Center Technology


Infinera

Event Director
Infonetics Research / IHS
(Moderator)

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#OpticalDCI

100G Is the New 10G


Evolution of Cloud Network Requirements
Why Data Center Customers Are Different

Data Center Interconnect Applications


Infineras Approach
Conclusion A New Optical Market
Q&A
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Optical WAN Capacity Deployed Per Year

Optical components are the best way


to look at deployed telecom capacity

Graph shows total transmission


capacity of long reach optical
modules shipped in a given year

Deployed bandwidth growing


25% to 30% year over year

100G unseating the technology


workhorse of the past decade 10G

Requires 100G costs to drop at least


20%30% per year

Requires new technology and


approaches to hit this cost target

Infonetics Research, October 2014


10G/40G/100G Optical Transceivers Market Size & Forecasts

100G Is the New 10G

Operators: Estimate the % each speed will be of


new wavelengths installed
Metro Wavelength (<600km) Deployments

10G fades but remains half of


new deployments in 2017
100G rises by 5x
400G is really 100G/200G
technology used in parallel

Interest in 200G isolated to only


two respondents

Infonetics Research, September 2014, 100G Deployment Strategies: Global Service Provider Survey

Data Centers Are the Catalyst for Metro 100G


Data centers and Internet content
providers are the major customers
for metro 100G

5.5

100G in Metro Applications

We need to transport 100GE interfaces


from our own switches/routers

Service providers see DCs and ICPs


as the big driver for metro 100G

5.2

We are waiting until 100G metro


pricing drops further before we begin
large scale deployments

Vendors need to address costs for


large scale deployments to take place

5.1

100G will be used mostly to carry


10G and address fiber exhaust issues

4.9

The near term opportunity is for using


100G to carry 10G more economically

3.8

Cost of metro 100G is competitive with 10G

The right products and technology


are not yet available

3.6

Flexible coherent modulation


is important enough for the metro
that we will pay a premium

3.5
0.0

1.0

2.0
3.0
4.0
Average Response

5.0

6.0

(0 = Strongly Disagree, 6 = Strongly Agree)


Infonetics Research, September 2014
100G Deployment Strategies: Global Service Provider Survey

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#OpticalDCI

100G Is the New 10G


Evolution of Cloud Network Requirements
Why Data Center Customers Are Different

Data Center Interconnect Applications


Infineras Approach
Conclusion A New Optical Market
Q&A
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Evolution of the Cloud: Past


Early cloud deployments leveraged the Internet for reaching
customers and interconnecting data centers

Customers

The Internet

vSwitch
V
M
V

V
M
V

M
V
M

M
V
M

PE
Routers

Optical
Transport

DC Fabric

Data Centers

Data Center
Common Network used for Customer Connection and Data Center Interconnect

Evolution of the Cloud: Present


Explosive growth in social networking & machine-to-machine (M2M) traffic
force larger connections directly between data centers
DC SDN
Platform

The Internet

Customers

vSwitch

V
M
V

V
M
V

M
V
M

M
V
M

PE
Routers

DC Fabric

Optical
Transport

Data Center
Interconnect

Data Centers

Data Center

Emergence of Dedicated Connectivity for Data Centers


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Todays Cloud: Interconnected Data Centers


Long Haul & Metro
Metro Data Centers
Long Haul DCI

Cloud
Exchange

Metro
Aggregation

Network
Operators

Mega data centers around the world


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Dynamics Driving Change in Cloud Infrastructure


IT Hardware & Data Networking Feb 19,2014

Technology Research

New players, big spenders

$90K

Greenfield advantage

No holdbacks from legacy OSS

Focus on innovation, speed, performance

$80K
$70K

$MIL

$60K

Big 7 ICP Spend

$50K

Telcos: forced to respond

7 Hyper-scale
ICP Spend
The Big
Big 7
Players
$40K
$30K

AT&T Domain 2.0 cloud-based


architecture

Verizon acquisition of Terremark

CenturyLink acquires Savvis

Tier 1 Telco Spend


Tier
1 Telco Spend

$20K

Top North American Carriers


$10K
$0
CY09

CY10

CY11

CY12

CY13

CY14E

CY15E

CY16E

CY17E

Source: ISI Group Report on Hyper-scale Capex Trends, Feb 2014

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Data Center Interconnection Growth

5X 100G metro wavelengths over


the next 4 years: 65% CAGR per
Infonetics Research

Long haul 100G growing at over


25% CAGR

DCI market expected to exceed


$1.0 billion by 2017

Source: Infinera, February 2015

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This Is a Market Truly Driven by Fast Innovation


Sales Price

The Innovation Gap

Cloud needs fast innovation

Cost

$/Gb

Time to Market
Innovation Gap

Moores law
expectation

Technology is a tool to drive price down

Leveraging Moores Law is a necessity

Speed to Market is essential

Profit
Innovation
Reality

ICPs will sacrifice features for speed

Operational simplicity is paramount

t=time

Need to shrink the innovation gap

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#OpticalDCI

100G Is the New 10G


Evolution of Cloud Network Requirements
Why Data Center Customers Are Different

Data Center Interconnect Applications


Infineras Approach
Conclusion A New Optical Market
Q&A
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Data Centers vs. Traditional Carriers


Revenue comes from transporting bits
Equipment flexibility is paramount
Reliability and SLAs drive network design

Revenue comes from applications and


content; transport is a cost center
Cost per port; flexibility not important

Fiber assets are owned, not scarce

Cost and capacity requirements plus real


estate constraints drive network design

Vendor supplied control planes and


limited interoperability

Fiber assets are leased, not owned


Open source, open vendor, softwaredefined networks (SDN)

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Two Different Markets Already Exist


What % of your 100G coherent wavelengths were metro (<600km)
in 2014? What do you expect in 2017?

Some service providers already


deployed metro 100G aggressively
during 2014

Competitive providers focused on


enterprise and data center
interconnect applications

Networks still metro heavy in 2017

This market needs a purpose built


metro solution, not repurposed
long-haul equipment

Infonetics Research, 2012 and 2013


40G/100G and ROADM Deployment Strategies: Global Service Provider Survey

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Key Platform Requirements


Metro Aggregation
Decision Factors

OSS

Integration with
legacy systems
Siloed operations and
engineering teams

Multi-service support

Backwards/legacy
compatible

Telco compliance, e.g.,


NEBS, ETSI

DCI
Decision Factors

DC Systems

Simple and fast integration


with DC systems

Support for DevOps

Single-service
(VLAN, IP, etc.)

Density (Gbps/RU)

Power efficiency
(Watts/Gbps)

Simple capacity growth:


Rack and Stack
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#OpticalDCI

100G Is the New 10G


Evolution of Cloud Network Requirements
Why Data Center Customers Are Different

Data Center Interconnect Applications


Infineras Approach
Conclusion A New Optical Market
Q&A
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DCI Deployment Example


Data Center
Switch

Rack & Stack


Optical Transport

WDM Mux/Demux

Data Center

DC
LAN

Terabits per second fiber


10 GE

100s of Gbps WDM

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#OpticalDCI

100G Is the New 10G


Evolution of Cloud Network Requirements
Why Data Center Customers Are Different

Data Center Interconnect Applications


Infineras Approach
Conclusion A New Optical Market
Q&A
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Cloud Xpress - A Purpose Built DCI Platform


Cloud Xpress Metro Platform

Hyper-Scale Density

2RU (500Gbps / RU)


Rack & Stack growth

1Tb/s input and output in 2 RU


500G PIC based super-channel line side
500G client w/mix of 10/40/100 GE
Instant Bandwidth

Simple Operation

Power Efficiency

~100W per 100G: ALL


INCLUSIVE

Simple 1-2-3 step provisioning


Server-like operational experience

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#OpticalDCI

100G Is the New 10G


Evolution of Cloud Network Requirements
Why Data Center Customers Are Different

Data Center Interconnect Applications


Infineras Approach
Conclusion A New Optical Market
Q&A
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Data Center Networks Disrupt the Supply Chain

10G is the workhorse technology

100G coherent rapidly becoming the


workhorse technology for all customers

Metro and data center applications addressed


by re-purposed and re-priced long-haul
technology and hardware

Vendors offer purpose built equipment


for the unique needs of metro and data
center customers

Silicon photonics and InP allow photonic


integration and cut costs by 20%30% per
annum

Multi-vendor, open source, and multi-layer


management and control

100G coherent costs limited by traditional


discrete component technology
Balkanized networks with proprietary
management solutions

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#OpticalDCI

100G Is the New 10G


Evolution of Cloud Network Requirements
Why Data Center Customers Are Different

Data Center Interconnect Applications


Infineras Approach
Conclusion A New Optical Market
Q&A
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Audience Q&A

#OpticalDCI

Andrew Schmitt

Dr. Stuart Elby

JoAnne Emery

Principal Analyst, Optical


andrew.schmitt@ihs.com
Infonetics Research / IHS

SVP, Data Center Technology


selby@infinera.com
Infinera

Event Director
joanne.emery@ihs.com
Infonetics Research / IHS
(Moderator)
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#OpticalDCI

Thank You
This webcast will be available on-demand for 90 days.
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