The ROADM space

At this year’s Optical Fiber Communications conference, like many before it, there was a lot of talk about reconfigurable optical add/drop multiplexers (ROADMs). During one panel discussion, CIBC analyst Jeff Osborne pointed out that, although ROADMs were a hot topic in optical networking, the market was overcrowded, at least at the component level. About 20 component vendors are chasing about five to seven key ROADM equipment vendors, he said. And the market at the system level is becoming ever more concentrated, as we see by today’s announcement that Alcatel-Lucent will acquire ROADM start-up Tropic Networks.

Within that handful of key equipment vendors Osborne alluded to are more overlapping layers. As separate entities, Alcatel and Lucent Technologies sold ROADMs made by Tropic Networks and Movaz Networks, respectively, along with their own in-house gear. But as Alcatel-Lucent, the company effectively has a stable of ROADM gear in its portfolio. Accelerating ROADM sales in Europe was a significant factor helping Alcatel-Lucent maintain its place as the world’s leading supplier of optical gear last year. The vendor took nearly a third of the European (and Middle Eastern and African) metro optical market in last year’s fourth quarter, according to Ovum-RHK. For the entire year, Alcatel-Lucent took more than 23% of the global optical networking market.

The ROADM space will contract as Alcatel-Lucent grooms its product portfolio over time. But that will take a while. So far the company can’t be pressed to admit than any of its children are less beautiful than the others. And so, for the time being, carriers will have plenty of ROADMs to choose. At the end of this month, the number of ROADM vendors will drop by one, but the number of ROADMs on the market will stay the same. The emergence of winners will also help clarify the space. Tellabs has helped that process somewhat by winning the business of Verizon Communications (which recently predicted it would deploy up to 500 ROADM nodes by the middle of this year) and more recently, according to some reports, Qwest Communications.

E-mail me at ed.gubbins@penton.com.