40Gbps and 100Gbps Ethernet in 2016

In the year 2016, today's nascent 40Gbps and 100Gbps Ethernet efforts will result in a $4.3 billion market, according to a recent forecast from research firm CIR.

The IEEE standardization effort for these Ethernet speeds has really just begun. The group looking at higher speeds only recently reached task force status, meaning it can go ahead and define standards. But CIR is already ready to quantify the market eight years from now, which should be well after the standards process is completed.

CIR expects demand for the new Ethernet speeds to come from large data and switching centers, high-performance computing environments and Internet exchanges. Anyone who is currently using aggregation of 10 Gigabit Ethernet will likely move to 40Gbps server ports as soon as they are available.

But CIR notes that the standards will make an impact throughout networks, including long-haul and interconnects. In fact, the firm says, these Ethernet speeds will mean the end of SONET:

"In the future Ethernet will lead the way in terms of speed, offering the highest data rate formats available. The ITU will follow by encapsulating these formats into its own Optical Transport Network which will gradually replace SONET/SDH. This new stability in the standards making process will reduce the risk of investment in new chips and optical components needed for the next leap forward in networking to occur."

CIR says the market for 40Gbps alone will reach $3.1 billion by 2016, with server connections leading the way. The firm says that the current standards activity is keeping servers in mind.

It's all about servers: Although the new Ethernet standards will impact every segment of the network from long-haul to interconnect, the initial demand thrust is expected to come from servers, which will account for just over 40% of the 40/100Gbps Ethernet market by 2016. Much of the current standards activity for next-gen Ethernet is being carried out with servers in mind.

Still seeking 100 Gbps: Even with 40Gbps Ethernet, there will still be a need for 100Gbps, especially for switch connections, which will represent half of the 100 GigE market in 2016.

Preparing for the next wave: Components and modules firms are preparing for the next wave in networking. Among the signs are (1) a new enthusiasm for InP based optical integration, (2) a proliferation of new modulation schemes, most notably the recent introduction of PolMux DPQSK, and (3) serious discussion of new MSAs, especially QSFP MSA, which CIR believes is the most likely candidate for both 40-Gig and 100-Gig transceivers.

About the Report:

CIR's new report analyzes and quantifies all of the key market opportunities for components and modules for the next generation of Ethernets. It covers the main applications drivers and developments in active components, modulations schemes, MSAs and media and the novel approaches to materials and manufacturing that are appearing to support next-generation networking. In addition, the report includes forecasts for 40Gbps and 100Gbps networks ports in volume and value terms with a break out by server, switch and router ports.

Jeff Caruso is site editor at Network World.