Report on 40/100 gigabit ethernet markets predicts first revenues in 2010

According to a new report from US-based telecom and data communications industry analyst firm CIR, the market for 40/100 gigabit ethernet products will begin to take off in 2010. The projections in the report titled ‘40/100 GigE Markets: 2009–2013’, show that revenues from 40/100 gigabit ethernet transceivers will reach US$482 million in revenues by 2013.

The report suggests that the economic downturn won’t delay early adopters of 40/100G ethernet, as companies such as Google and Amazon have a "desperate need” for 100G connections today. And scaling carrier networks to 100 Gbps will now only be accomplished using a 40/100 Gbps variant.

The adoption of 40G ethernet will occur first in high-end servers and high-performance computing applications. Within the 40G ethernet environment, initially as much as 80% of the market will be accounted for by the SR4 version of the 40/100G ethernet standard. However, the SR4 version is expected to lose share to CR4 over time as 40-Gbps-over-copper becomes more viable.

CIR believes that 100G ethernet will be adopted in the core of the network, driven by growth in 10G ethernet server connections and access points. As 100G ethernet begins to generate revenues in around 2012, CIR expects the LR4 variant to account for half the market, with SR10 taking another 20%. However, improvements in copper technology should drive CR10 share of the 100 Gbps space to around 25% by 2016.

The initial solutions for the 40G ethernet CR and SR variants will rely on existing technology which should give vendors a faster time to market. The ability to produce low-cost VCSEL arrays will be especially critical to success in the SR markets.

The report offers an assessment of where the opportunities are likely to be in a near-term economic environment in which both IT spending and carrier CAPEX are under pressure. The report also addresses which applications and systems will be the first to need 40/100G ethernet and how big that demand will be and how it will play out in long-haul networks and data centres.