TABLE OF CONTENTS The GigE players aren t big buyers of optical systems, but they are forming a market for a new generation of Ethernet switches that are carrier-class and capable of handling gigabit speeds.
While primarily engaged in building GigE networks, the pure-play GigE carriers ( ELECs ) approach the market a bit differently. Along with targeting the Fortune 250, these service providers have also tapped into a promising customer base that has only emerged since late 2000: storage service providers (SSPs), Application Service Providers (ASPs), Internet Service Providers (ISPs) and owners of large shared facilities that contain banks of terminating equipment and server farms the carrier hotels.
The success of these new service providers depends on their ability to quickly adjust to the changing bandwidth requirements of their own customers. Day-to-day planning, management, and development are required. Deploying too much bandwidth at the wrong time raises costs and overhead for the carriers; deploying too little bandwidth means poor service delivery to their customers. This volatility means these new carriers cannot afford the long provisioning lead times inherent with networks that are based on Synchronous Optical Network (SONET).
Driven by demand for high-speed and instantly provisioned broadband capacity in the local loop, one estimate claims that GigE service revenues could reach $657 million by 2003. It s also predicted that capital expenditures (capex) will total $1.2 billion by 2003.
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