Network connectivity is critical to enabling our digital economy and emerging virtual and augmented reality environments, including the metaverse. Supporting increasing capacity demands that continue to approximately double every two years is critical. However, it is also critical for service providers to support connectivity for evolving data center architectures and the latest advances in 5G wireless networks, including distribution of computing resources. With limited incremental revenue for their efforts, service providers must evolve their networks as cost-efficiently and power-efficiently as possible. Power efficiency has moved up the decision criteria as service providers seek to minimize their carbon footprint and their utility costs. Our 2023 predictions thus focus on data center and 5G evolutions and the optical networking transformations and innovations needed to support them.
#1: Data centers distribute and go modular
As we exit 2022, there are more than 10,000 data centers and 700 hyperscale data centers worldwide (Sources: Omdia, Synergy Research, Infinera). But with data centers, one size does not fit all. More than five years ago, Microsoft led the move away from a single large data center per metropolitan area toward multiple smaller, distributed data centers. It turns out that in many urban or densely populated areas, acquiring land for and powering a large site can be more complex and costly than for multiple smaller sites distributed throughout the region. 400ZR coherent pluggable optics with sub-120-km reach were born largely to deliver cost-effective data center interconnect among such metro-distributed data centers.
Inside the data center, 400G is also on the rise, with 50% of data center switch ports projected to be 400G (vs. 100G) (Source: 2021 Dell’Oro DC Ethernet Switching) and 58% of data center optical ports to be 400G (vs. 100G) (Source: 2021 Omdia ICP DC Optical Component Forecast) in 2025. But the data center evolution continues. Modular data centers, where construction and integration tasks are moved offsite and then shipped and assembled onsite, are becoming mainstream and enabling compute and storage to be quickly and reliably deployed in all types of settings – from just a few racks in a small hut to megawatts of equipment in a multi-story configuration. In 2023, look for modular, distributed data center deployments to accelerate, along with 400 Gb/s, 600 Gb/s, and 800 Gb/s per wavelength coherent optical connectivity to support their interconnection.
#2: 5G grows fixed wireless access and prepares for MEC
As of November 2022, the Global mobile Suppliers Association (GSA) identified 509 operators investing in 5G licenses, trials, or deployments. But for all the promise of new services, only 36 operators in 21 countries, or less than 10%, have launched public 5G standalone (SA) networks with dedicated 5G mobile cores. A total of 111 operators, or 22%, have been investing in trials, planned, or actual 5G SA deployments. The point here is to acknowledge that the vast majority of 5G networks are running on 4G cores (non-standalone) while their operators are deploying new radios; expanding their wireless spectrum, including newly acquired C-band and millimeter wave; and expanding their mobile transport. In effect, the majority of 5G networks today are delivering faster 4G services.
So, what does this mean for 2023 and the immediate outlook? Look no further than Verizon and T-Mobile. Verizon has gone from 228,000 fixed wireless access(FWA) subscribers at the end of 2021 to well over 1 million at the end of Q3 2022. T-Mobile has signed up more than 1.5 million FWA subscribers. Fully 44% of Verizon’s FWA subscribers are business customers. To successfully deliver business internet to enterprise customers, FWA must deliver high capacity, high reliability, and competitive pricing. While mobile operators will continue to pursue 5G SA deployments and new services, 2023 is the year when global service providers will add millions of new FWA business internet subscribers while evolving their mobile transport networks well beyond 10 Gb/s radio connectivity with next-generation pluggable optics, including early use of 100 Gb/s coherent transceivers and point-to-multipoint architectures.
These same optical transport upgrades will lay the foundation to enable broader adoption of multi-access edge computing (MEC) – a technology still early in its lifecycle and at the intersection of distributed data center architectures and 5G mobility. By deploying compute resources near the radio edge, we will be able to realize a host of future low-latency services – for example, augmented reality for an airplane mechanic where lightweight, cost-effective glasses worn by the mechanic collaborate with edge compute resources to combine real-time on-site video with stored map or engine graphics and instructions to provide a unified visual experience to the technician for enhanced troubleshooting and issue resolution.
#3: Industry collaboration and market trends broaden open optical adoption
With the separation of optical line systems from coherent transponders and pluggables, multi-vendor open optical networking will continue to accelerate and broaden deployment in 2023. Why? The answer is multifaceted. With data center connectivity and 5G networks nearly doubling capacity demands every two years and modest incremental revenue for service providers, it is imperative that service providers adopt new generations of optical transmission technology faster. Open optical networking enables service providers to have more choice, faster innovation, and improved economics.
In addition, pandemic-induced supply chain challenges are pushing service providers toward increased optical engine diversity to reduce their risk and shorten delivery times. Industry maturity and collaboration with organizations like the Telecom Infra Project’s (TIP) Open Optical & Packet Transport (OOPT) project group are also easing adoption by driving consistency across vendor solutions with standard interfaces and data models. As an example, the TIP OOPT Mandatory Use Cases for SDN Transport subgroup recently initiated its badge evaluation process to demonstrate compliance and interoperability. Infinera’s GX G42 is among the first solutions to receive a TIP Bronze Badge for its open compliance.
#4: Innovations in coherent pluggables enable new opportunities
We previously mentioned 400ZR coherent pluggable optics that emerged as a connectivity tool for metro-distributed data center connectivity. In 2023, look for three additional innovations to enable even more opportunities for coherent pluggables.
First, high-performance pluggables with 0 dBm transmit power and low out-of-band noise will enable coherent pluggable transceivers to cover a richer set of use cases, including deployment in metro networks with multiple cascaded ROADMs. This increased transceiver performance will also push some pluggables beyond the 600-km metro threshold and into a portion of the long-haul network. Second, advances in intelligent pluggables management, as being defined in the 28-member Open XR Forum and with inputs to other organizations like the OIF, will ease deployment complexity and enable operational support for advanced functionality like remote diagnostics, auto-discovery, spectrum analysis, and streaming telemetry in all types of non-optical hosts, including switches and routers. Finally, a new class of coherent pluggables, such as Infinera’s ICE-XR with digital subcarrier technology, will enable commercial deployment of point-to-multipoint architectures, where a single high-speed (e.g., 400G) hub optic can communicate with multiple lower-speed (e.g., 25G to 100G in 25G increments) optics without requiring intermediate electrical aggregation – thus reducing the amount of equipment, space, and power utilized and the total cost of network ownership by up to 70% over multiple years.
#5: Greener and power-efficient solutions increasingly drive decision making
With increased focus on power consumption and carbon emissions and their costs and impacts to the planet, 2023 will be a year when power efficiency makes up a key part of the vendor and solution selection process. Multiple service providers have announced ambitious environmental goals. Among them is the European service provider Deutsche Telekom, which is targeting to be climate neutral in terms of its own emissions by 2025 and carbon neutral throughout its value chain by 2040. To achieve these future targets, DT and other environmentally conscious service providers will need to select products and network architectures today that will begin to close the gap. Technology innovations like 400G/100G pluggable XR optics that support both high-performance point-to-point and point-to-multipoint network architectures can provide leapfrog or step-function improvements in power and footprint by reducing the number of transceivers by almost 50% and eliminating the need for intermediate electrical aggregation. Together, we can reimagine the network and enable the road to the metaverse while reducing our environmental impact along the way.
So, that’s this year’s big five predictions that will help enable a new and virtual reality along the road to the metaverse.
- Data centers distribute and go modular
- 5G grows fixed wireless access and prepares for MEC
- Industry collaboration and market trends broaden open optical adoption
- Innovations in coherent pluggables enable new opportunities
- Greener and power-efficient solutions increasingly drive decision making
I wish you all a safe, healthy, and joyful 2023.
