1/20/2009 -- If recent trends are any indication, the optical networking segment is holding steady -- even as other sectors are going bust. That's one upshot of a new market study from Infonetics Research, which revised its optical market forecast upward.

What's driving optical uptake? For one thing, spending by non-traditional (i.e., non-service provider) customers. Last year, sales to non-service provider accounts accounted for about 14 percent of total optical equipment spending, according to Infonetics.

It's a category that should continue to grow at a healthy clip, in spite of the ongoing economic crisis. "Non-service provider verticals as a whole, and the finance and government sectors in particular, are buying more optical equipment, both for long-haul and metro deployments. Their optical equipment purchases are being driven by the need for high-capacity, highly available storage extension, datacenter interconnection for businesses, and secure transmission," said Michael Howard, a principal analyst for Infonetics, in a statement. "There are a lot of interesting applications being used by the government, education, finance and utility sectors for which they buy their own optical equipment, and these will continue to grow over the next few years."

On the service provider front, carriers continue to invest in optical networking gear to support IP network transformation projects, as well as increasing traffic from business customers. Carriers cited a range of other drivers, too, including growth in residential triple-play services and mobile backhaul build-outs.

While service provider spending, which currently accounts for about two-thirds of all optical networking spending, is still the primary engine for optical sales, Infonetics projects that investment by Internet content providers including Google, Yahoo and MSN will increase to 10 percent by 2011. --Stephen Swoyer