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Digital
Cross Connects:
Managing High-Speed Copper and Fiber Interconnections in
Central Offices, User Premises and Carrier Hotels
2000-2005
a market research report
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The explosion of data traffic, new user
applications, and new carriers requires a new generation of equipment to
interconnect huge amounts of copper and optical fibers. While digital
cross connect systems (DCS) have been available for the past 20 years,
the next generation DCS promise to efficiently manage disparate traffic
protocols and line speeds not only at the CO, but in remote field
locations, carrier hotels, and user premises.
The market for DCS opportunities consist of two major segments: access
network transmission, where the opportunities lie in the provisioning of
new types of services on copper wire plants that go beyond POTS, and
metro/LD transmission, where the opportunities are in the immense growth
of traffic, bandwidth, and communication links associated with the
introduction of new fiber optic technologies.
The six types of DCS devices in this report each represent a
multi-billion dollar business opportunity. Insight predicts that the US
market for all DCS devices will grow to $35 billion by 2005, from $4.8
billion this year, a 50% compound annual growth rate (CAGR).
Digital Cross Connects 2000-2005 uncovers the drivers,
inhibitors, and constants affecting the market, from the growing
importance of transmission facilities management to the continuing
dominance of the telco CO. Insight presents five-year forecasts of DCS
installed base (systems and ports), annual revenue, and deployment in
six product categories. This comprehensive 152-page study outlines
potential customers, sites, price elasticity, external factors, and
marketing channels for each type of DCS device.
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Report Excerpt
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Market Growth
While digital cross connect (DCS) equipment has been available for 20
years, a new generation of equipment is emerging to meet the varied
network requirements created by the explosion of traffic volumes, new
user applications, and new carriers. Digital cross connect or DCS is a
device that manages the connections between two or more transmission
facilities. The types of network cross connections managed by a DCS can
range from the terabit speed of fiber optic cables to relatively
low-speed copper data rates used to provide access to a group of homes.
The focus of these opportunities is the DCS. The US market for these
devices is currently estimated at $4.8 billion in annual revenue
(excluding transmission). The market is increasing at about 50 percent
annually and is estimated to be worth about $35 billion in revenue by
2005.
Segmenting the Opportunity
The DCS market opportunities can be divided
into:
- access network transmission, and
- metro/LD transmission.
Opportunities in the access network
involve the provisioning of new types of service on copper wire plant
that go beyond POTS. Opportunities in the metro/LD plant come from the
immense growth of traffic, bandwidth, and communication links
concomitant with the introduction of new fiber optic technologies.
Insight has identified six types of DCS devices, each representing a
multi-billion dollar business opportunity.
- Integrated Access Device- a
customer premises located device which interfaces with both voice
and a number of different data protocols, and aggregates and cross
connects these to an enhanced speed copper wire loop.
- Customer Service Node - a
similar product to the IAD, but equipped for larger customers and
fiber optic loops.
- Digital Loop Carrier - an
enhanced or next generation DLC equipped to aggregate multiple
user protocols and be connected to the network through a SONET
ring.
- Access Manager - CO-located
access device equipped to handle enhanced speed copper wire loops
with multiple protocols and to segregate and cross connect these
to appropriate links in the metro network.
- Ring Manager - CO-located
device equipped to manage and cross connect channels from multiple
SONET rings. These SONET rings are employed in both the access
network and the metro or inter-office network.
- Trunk Manager- hub or tandem
office-located device equipped to manage and cross connect
channels from multiple fiber optic trunk lines.
The first four devices are elements of
the local access network while the last two are part of the metro/LD
plant. The term manager is applied to the last three types of DCS to
emphasize the growing requirement for network level management
capability within these units.
If the DCS is situated at a transmission
intersection with other network devices and routes traffic, and if its
functions include management, line testing and monitoring, how is it
different than a Class 5 switch or a core network router? In a sense
these other types of devices perform the same function as DCS. The key
differences between the POTS switch, a router, or an ATM cell switch and
the DCS are connection duration and control. The DCS is designed for
connections with average duration of hours to months with connections
controlled by a network management system. Other types of switches are
designed for connection duration of minutes down to milliseconds with
connection control based on user-provided call control information such
as a telephone number or an universal resource locator (URL).
Also the call-controlled circuit and packet switches are closely tied to
specific services, the DCS is applied only to common transmission
management. And unlike most telecom services where switch control is an
inherent element of the service provided to customers, DCS control is an
engineering and provisioning process.
Where the Opportunities Lie
There are vendors today addressing each of these six areas. Most of
these vendors are new companies, many with recent splashy initial public
offerings (IPOs) or acquisitions. The early customers for next
generation products are primarily new companies, competitive local
exchange carriers (CLECs,) intereXchange carriers (IXCs,) and wireless
carriers. The incumbent local exchange carriers (ILECs) are more
cautious, meeting growing requirements by expanding existing DCS device
capacity.
This caution is not altogether unwarranted. There are numerous
unresolved issues with the next generation DCS products, not the least
of which is the network management issue. Also, the early customers for
next generation DCS products are not above hedging their bets with the
simultaneous purchase of legacy equipment.
As the world's telecom networks expand in every dimension, the role of
network management becomes enormously more complex and important. The
DCS, because of its physical positions at the junctions of telecom
routes and because of its responsibilities as the transmission manager
has a significantly expanded role in the management of these networks.
Survivability in the event of system failure or even peak traffic loads
is a given.
The DCS is also in an ideal position for testing and monitoring. The
huge growth of telecom channels and providers makes assigning channels
and maintaining inventory records on their assignment and availability
major tasks. These tasks require a network management system (NMS) and
the operations support systems (OSSes) so revered by the ILECs. It is in
fact the lack of these tools which engenders the caution among the ILECs.
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Market Segmentation
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- Trunk Managers
- Unit Installed Base
(Systems & Ports)
- Annual Revenue
- Deployment
- Ring Managers
- Unit Installed Base
(Systems & Ports)
- Annual Revenue
- Deployment
- Access Managers
- Unit Installed Base
(Systems & Ports)
- Annual Revenue
- Deployment
- Digital Loop Carriers
- Unit Installed Base
(Systems & Ports)
- Annual Revenue
- Deployment
- Customer Service Nodes
- Unit Installed Base
(Systems & Ports)
- Annual Revenue
- Deployment
- Integrated Access Devices
- Unit Installed Base
(Systems & Ports)
- Annual Revenue
- Deployment
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Table of Contents
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Chapter I
EXECUTIVE SUMMARY
1.1 Market Growth
1.2 Segmenting the Opportunity
1.3 Where the Opportunities Lie
Chapter II
MARKET OVERVIEW
2.1 Defining Digital Cross Connect Systems
2.2 Background
2.2.1 Telecom Networks
2.2.2 Digital Cross Connect Systems
2.2.3 Comparing DCS to Other Types of Switches
2.3 Network Transmission Areas
2.3.1 The Access Network
2.3.2 The Metro Network
2.3.3 The Core Network
2.4 Six DCS Products
2.5 Other Devices in the Transmission Network
2.5.1 Modems
2.5.2 Multiplexers
2.5.3 Packet Switches
Chapter III
MARKET FORCES: DRIVERS, INHIBITORS AND CONSTANTS
3.1 Market Drivers
3.1.1 Growth of Data Traffic
3.1.2 Loop Technology
3.1.3 Optical Technology
3.1.4 Other Optical Technologies
3.1.5 Network Growth
3.1.6 Competition
3.1.7 Function Integration
3.1.8 Function Separation
3.1.9 Scarcity of Qualified Personnel
3.2 Market Inhibitors
3.2.1 Legacy Systems
3.2.2 Network Transport Systems
3.2.3 Network Operating Support Systems
3.2.4 Standards
3.2.5 Alternative (or Competing) Technologies
3.3 Market Constants
3.3.1 Users' Physical Locations
3.3.2 End Offices and Other Network Nodal Points
3.3.3 Revenue Sources
Chapter IV
DCS APPLICATIONS
4.1 The Growth of DCS Equipment
4.2 DCS Applies to Customer Type
4.2.1. Telecom Carriers
4.3 DCS Applies to Functional Applications
4.2.2 Functional Applications
4.3.1 Grooming
4.3.2 Packing
4.3.3 Multiplexing
4.3.4 Remote Provisioning
4.3.5 Test Access
4.4 DCS Applies to Topographic Applications
4.4.1 Access Networks
4.4.2 Digital Loop Carrier Systems
4.4.3 Function of Digital Loop Carrier Systems
4.5 DCS Applies to Capacity Applications
4.5.1 Trunk Manager
4.5.2 Access Manager
4.5.3 Digital Loop Carrier Systems
4.5.4 Customer Service Node
4.5.5 Integrated Access Device
4.5.6 Ring Manager
Chapter V
DCS USERS
5.1 Network Access Market
5.1.1 Basic Residential User
5.1.2 Advanced Residential User
5.1.3 Small/Medium Business Users
5.1.4 Large Business Users
5.1.5 Wireless Carriers
5.1.6 Multi-tenant Residential Buildings
5.1.7 Multi-tenant Business Buildings
5.1.8 Home Office Users
5.2 Network Access Service Providers
5.2.1 ILECs
5.2.2 CLECs
5.3 Local Service Providers
5.3.1 Inter-office Network
5.3.2 Intra-LATA
5.4 List of Users
5.5 Core Network Providers
Chapter VI
DCS VENDORS
6.1 DCS Vendor Categories
6.1.1 Major Telecom Manufacturers
6.1.2 Transmission Equipment Manufacturers
6.1.2 Data Communication Vendors
6.1.3 New Infrastructure Vendors
6.1.4 New Infrastructure Vendors
6.2 DCS Vendors by Market Segment
6.2.1 Trunk Manager Market
6.2.2 Ring Manager Market
6.2.3 Access Manager Market
6.2.4 Digital Loop Carrier Market
6.2.5 Customer Service Node Market
6.2.6 Integrated Access Device Market
Chapter VII
DCS BUSINESS OPPORTUNITIES AND MARKET FORECAST
7.1 Six New Products in Two Areas
7.2 Customer Premises Access Market
7.2.1 Integrated Access Device
7.2.2 Customer Service Node
7.2.3 Digital Loop Carrier
7.2.4 Access Manager
7.3 The Intra-Network or Metro Network Market
7.3.1 Ring Manager
7.3.2 Trunk Manager
7.4 Universal Requirements
7.4.1 Cross Connect
7.4.2 Scalability and Flexibility
7.4.3 Network Management
7.5 Potential Markets for Six Product Categories
7.5.1 Pricing
7.6 Forecast
7.6.1 Integrated Access Device
7.6.2 Customer Service Node
7.6.3 Digital Loop Carrier
7.6.4 Access Manager
7.6.5 Ring Manager
7.6.6 Trunk Manager
7.7 Forecast Summary
Chapter VIII
AN OVERVIEW OF DCS TRENDS
8.1 Transmission Facilities Management
8.2 Transmission Rates
8.3 Number of Ports
8.4 Multi-protocols at the Edges
8.5 Device Function Integration
8.6 Network Function Segregation
8.7 Mesh Networks
8.8 Data Networking Technology
8.9 Targeting Market Niches
8.10 The Growth of Virtual Networks
8.11 Circuit Switching of Core Transmission
8.12 Dominance of the Telco Central Offices
Table of Figures
Chapter I
I-1 DCS Forecast Summary, 2000-2005, ($Millions)
Chapter II
II-1 Origins of the Digital Cross Connect
II-2 Evolution of the Digital Cross Connect
II-3 Service Integrated Networks
II-4 The Transmission Network, Level 0
II-5 The Transmission Network, Level 1
Chapter III
III-1 Optical Fiber Capacity, 1975-2000
III-2 Wireless Subscribers to Cellular Phones and Pagers, 1999-2005
III-3 Typical CLEC Network
Chapter IV
IV-1 Network Configurations
IV-2 Transmission Topographies
IV-3 CSA Network
IV-4 DCS Devices by Capacity or Size
IV-5 Typical Trunk Manager
IV-6 Access Manager
IV-7 Next Generation ADM/DLC
IV-8 Customer Service Node
IV-9 Integrated Access Device
IV-10 Ring Manager
Chapter V
V-1 Inter-Office Network
Chapter VII
VII-1 Price Pattern for Telecom Ports
Chapter VIII
VIII-1 Tellium Optical Switch
VIII-2 Impact of Additional Carriers on Metro Networks
VIII-3 Eastern Research's Multi-Protocol Access Manager
VIII-4 Devise Integration
Table of
Tables
Chapter II
II-1 Transmission Network Characteristics
II-2 Total Number of US User Premises, 2000
II-3 Types of Multiplexers
Chapter III
III-1 Forces Impacting the DCS Market
III-2 Total US DSL Connection, 1999-2005 (Millions)
III-3 Different Forms of xDSL
III-4 Telecom Service Networks
III-5 Characteristics of Switched Telecom Networks
III-6 US Housing Units, 1995 (Millions)
III-7 US Non-Residential Establishments, 1999 (Thousands)
Chapter IV
IV-1 Number of Premises Access Lines, 1998 (Millions)
IV-2 Long Haul Networks by Fiber Route and Protocol
IV-3 Number of Fibers per Route, 1985-1998
Chapter V
V-1 Access Market Segments
V-2 Types of Local Access Service Providers
V-3 DSL Links Installed by ILECs, 2000
V-4 Total Mileage of Installed Fiber by ILECs
V-5 Total Mileage of Installed Fiber by CLECs
V-6 Competitive Local Exchange Carriers
V-7 Regional Carriers, Fiber Route Miles and Protocol.
V-8 Long Haul Carriers Fiber Route Miles and Protocol
V-9 ISP Hubs
Chapter VI
VI-2 New Firms Offering DCS Devices
Chapter VII
VII-1 DCS Market Summary by Product Type
VII-2 Potential Market for Integrated Access Devices
VII-3 US Forecast for Integrated Access Devices, 2000-2005
VII-4 Potential Market for the Customer Service Node
VII-5 US Forecast for the Customer Service Node, 2000-2005
VII-6 Forecast for the Digital Loop Carrier Market
VII-7 US Forecast for Digital Loop Carrier, 2000-2005
VII-8 Potential Market for the Access Manager
VII-9 US Forecast for the Access Manager, 2000-2005
VII-10 Potential Market for Ring Manager
VII-11 US Forecast for the Ring Manger, 2000-2005
VII-12 Potential Market for the Trunk Manager
VII-13 US Forecast for the Trunk Manager, 2000-2005
VII-14 DCS Forecast Summary, 2000-2005 ($Millions)
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