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MSSPs Rising Star in Optical Networking
July 30, 2003
By Dan Muse
Describing it as a "particularly resilient" segment of the optical networking market, research firm IDC reports that the worldwide Synchronous Optical Network/Synchronous Digital Hierarchy (SONET/SDH) multiservice provisioning platform (MSPP) market posted a 25-percent revenue gain to reach $1.4 billion in 2002.
The gain is particularly impressive, IDC notes, because the overall optical equipment market continues to contract. In fact, according to a report by the Framingham, Mass.-based company, MSPPs could emerge as the largest segment in next-generation optical networking as early as the end of this year.
MSPPs are network elements built on next-generation SONET/SDH technology and are designed to replace older SONET/SDH add/drop multiplexers (ADM) in carrier networks.
"In the span of three years, a market segment that began with a small California start-up has become a cornerstone of next-generation optical networking. Moving forward, the MSPP segment remains positioned for further growth," said Sterling Perrin, senior research analyst, Optical Networks, at IDC.
IDC describes MSPPs as an evolutionary technology designed to add flexibility to the handling of emerging data services while preserving all of the time-division multiplexing (TDM) functionality of traditional SONET/SDH gear. IDC credits the evolution of MSPPs technology to Cisco's 1999 acquisition of start-up Cerent.
In Worldwide Multiservice Provisioning Platform Forecast and Analysis, 2003-2007, IDC forecasts that MSPP revenue will approach $1.6 billion in 2003 and will increase at an 18-percent compound annual growth rate to reach $3.2 billion by the end of 2007. IDC cites that several factors have converged to boost the acceptance of MSPP:
A move away from CLECs and back toward incumbent carriers has favored MSPP growth.
Continued growth in data traffic and increased strategic focus on data services are driving carriers to choose MSPPs over legacy SONET/SDH ADMs. Key to the MSPP value proposition, IDC reports, is its capability to handle data traffic more efficiently and more affordably than legacy SONET/SDH equipment.
Traditional telecom vendors are bringing MSPPs to market, making the decision to move to MSPPs less risky for their existing carrier customers.
Although MSPPs were initially launched during the North American telecom boom, MSPP vendors generated 64 percent of their revenue outside North America in 2002.
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