100G port shipments are simply not lining up with deployments or revenues. ACG Research tracks 100G ports but does not report on them for this very reason. Let's take a look at some of the factors influencing the market:
- Route distance: In some cases 100G will require regeneration, some will not. Most 100G deployments are layered on top of 10G routes so that regeneration sites are already established, but with coherent technology, longer distances are clearly achievable. If a service provider deploys a longer route, there will be fewer ports. If the provider has to regenerate, the port count will double. Thus, long-distance products can have lower port market share and are “penalized” simply by having better technology. In other cases, the routes are shorter, and more regeneration is an accepted fact. Either way, the numbers get skewed.
- 100G ports are often split between metro and long-haul deployments; yet, the definition for metro can be widely assumed to be anywhere from 300km up to 700km. 100G total port counts may be recorded, but disparity of metro definitions by vendors and analysts adds to the confusion.
- Some shipments are recording nonrevenue field trials, spares and free products as port shipments (not a standard process) and this presents a challenge to defining what constitutes true port counts.
- As we are in the first year of 100G shipments, there have been the usual technical issues with any new and significantly higher bit rate. This often results in additional sparing or replacement parts, which are added to the total shipped port counts.
- In some cases, ports reported in previous quarters have been revised upwards.
We know that 100G pricing has been extremely volatile this past year. To determine an average selling price of a 100G port becomes even more problematic when revenues cannot be tied to shipments.
Success metrics at this time should not be based on port count. Inherently, there are flaws in the current market that are distorting market share. Moving forward, we expect this to change as the market matures. As we see the price of 100G stabilize and the technology maturing, the situation will improve.
The following are some guidelines if you are looking for overall value and sustainability in the market:
- Review other success factors in the segment. Are revenues trending up in a difficult market?
- Which vendors are service providers selecting? Are they announcing them?
- Request names of customers deploying 100G. Most use two vendors (some exceptions) for 100G.
- Examine the deployment roll-outs. How large are they? One route does not a network make.
Note: we target no specific vendor or analyst with this report. These issues will eventually resolve themselves. We merely want to clear the air now until there is better visibility.
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