Don’t Count SONET Out For Ethernet (Yet)

UPDATED: Ethernet  may be widespread, but it doesn’t actually plaster the earth as a networking standard. At least, not yet.

A new study from Frost and Sullivan notes that synchronous optical network (SONET) technology , at least in the short term, remains the leader in the metro private line networking space. Metro Ethernet, however, may not be all that far behind.

SONET is a standard for fibre optic data and voice communication. Different Optical Carrier (OC)  transmission levels run over SONET, including the popular OC-192 pipe, which runs at 9.95 Gbps (gigabits per second).

In recent years as Ethernet has become increasingly pervasive, Metro Ethernet  has risen in popularity as an alternative to SONET.

SONET faces strong competition from Metro Ethernet, but it is holding its own, for now.

Frost and Sullivan’s report said wholesale sales of SONET private line and SONET ring services are expected to peak at $2.25 billion in 2011, up from only $1.66 billion in 2004. The continued growth of SONET is surprising, said Maria Zeppetella senior analyst, telecommunications services information and communication technology services for Frost and Sullivan.

“It is surprising in that it is greater than expected due to price stabilization, which is now taking place,” Zeppetella told internetnews.com. “Sales of SONET have remained strong over the past few years, but due to the glut, and too many competitors in the market, prices had taken a hit.”

SONET’s ascendancy will change by 2012 though, when revenues are forecast by Zeppetella to decline to $2.19 billion from the $2.25 billion forecast for 2011.

Not everyone shares Frost and Sullivan’s outlook on SONET. IDC, for one, does not have the same optimistic forecast for the growth of SONET through 2011.

“SONET in general has been declining quarter over quarter, albiet slowly,” IDC Research Manager Eve Griliches told internetnews.com. “While it is still a large portion of the optical market, that portion is declining, not growing at all.”

That said, IDC does see growth in a SONET sector: next ‘generation’ SONET/SDH (SDH – Synchronous Digital Hierarchy  boxes, called Multi-Service Provisioning Platforms (MSPP’s). Those are growing, Griliches noted, but they are not the traditional SONET/ADM (add/drop multiplexing  box, and they incorporate Ethernet and packet technologies.

Demand for bandwidth overall is strong, said Frost and Sullivan’s Zeppetella, and wholesale SONET demand in particular is being driven by wireless backhaul needs and increasing broadband connectivity. SONET is a mature and reliable technology that currently has an “extensive” installed base, which gives it somewhat of an edge as carriers build out to meet demand.

“Carriers hate rip and replace; an evolution is clearly preferred,” Zeppetella said. “In carrier networks that are SONET-based, they are already providing Ethernet via Ethernet over SONET technology, which allows them to leverage their installed base of equipment, while offering new services that are in demand.”

Ethernet’s ascendancy is being driven by the continued evolution of Ethernet standards and the rise of Voice over IP  and other packetized data.

Zeppetella does not expect that Ethernet will cause SONET to go away anytime soon in Telco networks because carriers still prefer SONET’s reliability and quality of service features.

“The private line market is quite strong now and is being driven largely by sales of SONET lines to wireless carriers for backhaul needs as well as content providers,” Zeppetella said. “While Ethernet is enjoying strong growth, the dollar amount spent on Ethernet is still quite small compared to SONET private line sales.

“We expect SONET to remain fairly strong, although Ethernet will continue to grow at a much stronger pace.”

SONET may well be nearly displaced by Ethernet in access networks, according to Zeppetella, but it won’t cause SONET to disappear.

“Nothing ever disappears entirely in carrier networks – X.25 is still out there!” Zeppetella said. “SONET will clearly not disappear but will definitely begin losing share as Ethernet applications become favored. Newer network builds may avoid any SONET infrastructure entirely.”