Thanks for the detailed response and follow up. I’ve always recommended HeavyReading to others exactly because there is no forecast.

Going forward, if you do forecast, it would be good to adopt a format where you track accuracy. This would help people see trends in your projects and add value. It also shows that you’re willing to be accountable, something most market research firms avoid like the plague.

Hope to see you soon.

Andrew

Thanks for the write-up. good stuff and glad you could make it.

On the forecasts, we actually started Heavy Reading with a mission NOT to do forecasts – we figured numbers were rather discredited after the bubble, as you point out, and it was time for more qualitative research. I think we were right, and we got some great analysts here to go right to the source and do surveys of service providers, customers, and then talk to vendors and get a sense if they were on target or not.

I ended up relenting on optical because as it has started to truly grow again, I find numbers are an important way to tell that story, at least part of the story. I put together the numbers over the past four months by getting reports from all the vendors about their CY 2005 revenues, including great detail from Huawei, then went out and met face to face with major telcos and MSOs. We’re still going to put out qualitative analysis, but the numbers help flesh out the whole story.

I agree enterprise and govn’t are great drivers for metro DWDM today, and provide much better margins than telcos, but when we forecast out to 2008, every major operator with massive capex told us video was driving their optical networks growth, particularly for regional networks. I didn’t find any real coherence on just what these optical architectures would look like, though obviously Ethernet/packet over WDM is a common theme. But the big ROADM RFPs out there in the telco and cable MSO space are explicit about video carriage.

I’m with you on Akamai, caching has to be a big part of this, but for now I’m sticking with video as a driver for 2007-2008 in the WDM market because the plans are in place. that said, it’s quite possible that “video” is just a sexier way of saying “broadband” now, so we may really be talking about the same thing.

On the Sonet forecast, I went back and checked the survey out and filtered the results to just show those operators with capex of $1 billion or more annual. The pie chart was about the same – evenly split between expanding with current gen of multiservice Sonet, deploying new generations of MS Sonet, and capping Sonet in favor of packet over optical. So the capex weighting doesn’t yield a big change in the numbers, though I will warn that these surveys are not always taken by the person holding the pen over the check. I’m totally in agreement with you about how the spending on MS Sonet will shift away from TDM to OC-48 and Ethernet. No doubt abougt that at all.

In placing bets on who will dominate LH DWDM, you have to go with Infinera and Huawei. They are both differentiated in their own way, and quite disruptive. Both are game changers like none other.

cheers,

Scott Clavenna