CAGR for the product group around optical interconnects is 25% while applications for Datacom and Telecom will reach 13% with a initial market size of 0.8 B US$ and 2.5B US$ in 2009, respectively.   

Moreover, the forecast for many high-performance and low-power consuming nanophotonic network devices is less than 4-5 years (Figure 2). This is shorter than the lifecycle for most ­telecommunications network equipment. Operators and ­carriers who currently consider purchasing equipment or upgrading their networks should keep this in mind.    

A note with respect to the given timelines: Because the market for manufacturer equipment for telecommunications is fast-paced and highly competitive, new network transmission technologies could emerge in the meantime. One highly discussed candidate is P-OTN (Packet Optical Networks), a blend of packet network data technologies (e.g. Ethernet, MPLS) with optical network transmission technologies (e.g. WDM and ROADM). P-OTN has been seen as one of the hot topics in optical networking in 2008. However, nano-photonics will – without any doubt – also find its way into P-OTN.

Impacts of all optical switching   

Besides the (theoretical) technological superiority, all-optical switching will also enable advantages on the business side. The major impacts are:     

Increased flexibility and dynamic re-configurability: Packet based switching takes place on the lowest possible layer, adding a high degree of flexibility in application design to core networks. The core network can be changed or reconfigured in a dynamic way following sudden demand and environmental changes.    

Increased reliability and reduced complexity: Photonics tends to be more reliable than electronics leading to reduced maintenance costs, thus lowering OPEX. With its ability to act as a multi-degree all-optical wavelength cross connect (multiple inputs, multiple outputs) the PPS reduces the complexity of a network by consolidating management and transmission into the optical layer. It virtually removes the need for higher client layers, hence, lowers CAPEX as well.