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    A Glass Half Full

    By
    eWEEK EDITORS
    -
    January 8, 2001
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      Money doesnt grow on glass anymore, so 2001 will be a year in which fiber-optic carriers that have already acquired rights of way, and the vendors ready to serve them, will be rewarded.

      But venture capitalists wont be handing out cash to carriers and vendors looking to catch up to competitors with Johnny-come-lately business plans.

      “The financial markets have tightened, and the models are under suspicion at this point,” says Roland Van der Meer, partner at venture capital firm ComVentures. “The people building these things dont have free capital anymore.”

      Still, revenue should flow like never before for such metro carriers as Broadband Office, Cogent Communications, Telseon and Yipes Communications, which have the infrastructure to connect metro rings to bandwidth-hungry office buildings and campuses.

      Metro carriers tend to prefer multiple vendors of optical components and will choose from a large group that includes such giants as Alcatel, Cisco Systems, Lucent Technologies and Nortel Networks. The vendor pool may also include agile pups, like Avici Systems, Ciena, Extreme Networks, Foundry Networks, IP Highway, ONI Systems, Sycamore Networks, Tenor Networks and Zaffire.

      Market analysis company RHK says the North American optical transport market will grow to $29.3 billion in 2001, from $20.6 billion in 2000. Europe will add $9 billion and Asia will chip in $6.1 billion to the worldwide optical transport market. The fastest growth will be in Dense Wavelength Division Multiplexing gear, which divides optic fiber into separate wavelengths, each capable of carrying data, voice or video traffic. That will mean a breakout year for the likes of Agilent Technologies, Agility Communications and ADC Altitun, makers of tunable lasers that can be manipulated to expand or shrink bandwidth.

      Vendors will compete to fill profitable niches, rather than trying to compete with market-leader Nortel as providers of end-to-end solutions. In the spirit of ever-faster, ever-easier architecture, 2001 will see growth in Gigabit Ethernet and a cautious embrace of Multiprotocol Label Switching technology.

      “There are enormous opportunities to make money in the sector,” says Paul DeBeasi, vice president of product planning at bandwidth provisioning software maker IP Highway. “The winners will be the most flexible products that can rapidly respond to market demand.”

      eWEEK EDITORS
      eWeek editors publish top thought leaders and leading experts in emerging technology across a wide variety of Enterprise B2B sectors. Our focus is providing actionable information for today’s technology decision makers.

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