Folks, this is a repost from the paid-for Infinera message boards. It seemed appropriate to include here for the folks who follow Infinera. Comments are most appreciated and welcome.
A couple of threads ago a few analyst research articles were provided attempting to size up Infinera and making a call on where they were headed. The problem with these articles is they come from the perspective of a sell-side analyst which is someone with a finance degree rather than a true market research analyst who focuses on the the entire industry.
Below are references to two articles that show high level information on growth, size, and anticipated demand in the network equipment space. The articles are written by Infonetics Research. I do not have access to the written market research material myself, but, I do have a registered account with IHS so I can download and review some of the highlights.
The first article was published around mid-August.
IHS forecasts huge growth for 100G optical ports
http://www.lightwaveonline.com/articles/2015/08/ihs-forecast…
Coherent 100G port shipments for metro regional fiber-optic networks grew a whopping 145% last year and are expected to grow 118% more this year, predicts IHS in its report, “IHS Infonetics 100G+ Coherent Optical Equipment Ports.”
"Adoption of 100G coherent technology has surged, first in long-haul networks and now becoming a material part of metro networks,” observes Andrew Schmitt, IHS research director for carrier transport networking. "100G is poised to explode in 2016 as new equipment built specifically for the metro reaches the market, allowing 100G technology to economically reach new portions of the network such as metro edge and metro regional.“
In 2014, growth in 100G port shipments was led by massive purchases in China from China Mobile. Most of 100G coherent technology deployed last year was for long-haul applications, but metro regional (<600 km) and metro access (<80 km) applications will start ramping next year. In 2017-2018, 100G coherent will make another quantum jump, displacing 10G in the 80-km or less metro access market, IHS predicts.
A small number of systems houses control the majority of 100G market share: Alcatel-Lucent, Ciena, Huawei, Infinera, and ZTE. The only potential catalyst for shifts will come from deployment in shorter reach metro and data center applications - the next growth vector for 100G.
The IHS report provides granularity for 100G+ coherent and non-coherent port shipments on optical transport equipment, tracking the evolution of 100G as operators increase the flexibility and capacity of their networks. It tracks 100G by application, including metro regional, metro access, and long haul, as well as specific technology derivatives such as flex-coherent and direct-detect 100G.
The second article was recently published earlier in the month.
http://press.ihs.com/press-release/technology/2016-breakout-…
2016 a Breakout Year for 100G Technologies in Network Equipment Markets
“Deployments of 1G and higher networking ports continue unabated by both enterprises and service providers as they seek to bring capacity in line with the demands placed on their networks. In general, the higher the port speed, the higher the growth rate, which means that 40G and 100G are the key growth segments of the market.
“2016 is poised to be a breakout year for 100G technologies as coherent 100G ports ramp in metro networks, and companies such as Google, Microsoft and Amazon introduce 100G Ethernet switching technology into their massive hyperscale data centers.”
NETWORKING PORTS MARKET HIGHLIGHTS
• 1G/2.5G/10G/40G/100G port shipments are anticipated by IHS to exceed 700 million in 2015, totaling $45 billion
• 100G port shipments more than doubled in 2014 from the prior year, reaching 163,000
• IHS forecasts worldwide 100G port revenue to grow at a 137 percent compound annual growth rate (CAGR) from 2014 to 2019
Both articles link to paid-for market research pieces. As I mentioned, I don’t have access to specific information, but with my “guest” account I am able to see some interesting pieces of information, such as the TOC. Below are a few of the TOC highlights:
TOP TAKEAWAYS: 1G/2.5G/10G/40G/100G REVENUE REACHED $___ IN 2014, ON TRACK TO HIT $___ IN 2015
Port shipments and revenue on steady upward path through 2019
40G moving from “old” service provider 40G to “new” enterprise 40GE
Exhibit 6 40G Growth Spurred by 40G WDM and 40GE Data Center Switches
100G won, 40G lost in the service provider market
Optical ports moving to coherent 100G
Exhibit 7 Service Provider Equipment Drives 100G Ports in Early Years
More service provider port revenue than enterprise; 10G and 100G are growth areas
Exhibit 12 Service Provider Port Revenue: 1G Declining, 100G Outgrows 40G
Geography: Asia Pacific leads, little change ahead
MARKET DRIVERS: TOP DRIVER IS UNRELENTING BANDWIDTH GROWTH
The numbers in the first line were blanked out in the TOC summary, but they forgot to bleep the second number on an advertising page where it shows the size being at $45B. This is the spend for all network equipment and it is expected to land at $45B for the year. Wow.
Last point to note, the report summary also highlights changes since the last report (these are quarterly reports). In the list of vendors Infinera shows up along with their list of products, and CX is the product with the highlight, meaning, something new and interesting about CX is included in this quarter’s report which is different from the prior quarter’s report. None of Infinera’s other products have an update to their projection. Infinera’s Transmode products are still listed under Transmode. None of their products had a highlighted change.
I will refrain from drawing conclusions directly, but leave it for you to decide how well Infinera is positioned and what their prospects are with respect to their current market share and their TAM for the future.
Best,
—Kevin