1/4/2005 -- While some areas of the networking industry -- such as IP/MPLS and VPNs -- are enjoying explosive growth, others aren’t so fortunate.

Take the optical networking space, for example. In the third quarter of 2004, optical network hardware revenues were down by 3 percent from the previous quarter, according to researcher Infonetics Research. What’s more, optical market doldrums aren’t likely to improve any time soon; in fact, Infonetics projects slow growth through 2007.

Of course, all’s not bleak for purveyors of optical networking solutions. The metro SONET/SDH switching category, for example, should post revenues that outpace those of other product categories in the optical networking space.

“Metro SONET/SDH equipment is king of the hill with 58 percent of the entire optical network hardware revenue now, growing at a low single-digit CAGR from 2003 to 2007,” said Michael Howard, principal analyst of Infonetics Research, in a statement. “Meanwhile, intelligent metro SONET technology is holding ground in the face of difficult market conditions. We expect the intelligent metro SONET/SDH switching category to grow faster than transport through 2007.”

In particular, Howard cites product entries from Cisco (with the ONS 15454), Nortel, Alcatel, ECI, Lucent, Siemens and Marconi that -- thanks to integrated DCS functions, Ethernet, WDM interfaces and data-accommodating functions such as GFP, VCAT and LCAS -- could help stimulate continued growth.

In Q3, Alcatel was the worldwide revenue market share leader for intelligent and legacy optical network hardware, followed by Nortel, Huawei and Fujitsu. For the quarter, intelligent optical networking hardware made up 89 percent of all optical network hardware revenue, while legacy hardware continued to decline at 11 percent -- down from a 12 percent share in Q2 2004, and plummeting to 1 percent by 2007, Infonetics says.

In terms of topography, metro makes up 75 percent of all optical networking hardware revenue, while long haul comprises 25 percent. -Stephen Swoyer