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18 January 2012
Industry commentators – CEOs, executives and analysts – are upbeat about telecoms' prospects in 2012 while expecting the year to be one of change. As operators continue to struggle with traffic growth, the expectation is that network configuration and management must change. More intelligence and multi-layer optimisation will be needed in the network and even application awareness.  
 "We need to see networks that can effectively govern and optimise themselves," said Brian Protiva, CEO of ADVA Optical Networking.
Optical networking technologies such as 100Gbps and next-generation ROADMs will also play their part. US operator Verizon says it has significant rollout plans for 100Gbps technology in its network this year. "The key technology enabler in 2012 will be the flexible grid optical switching that can support data rates beyond 100 Gigabit," said Glenn Wellbrock, Verizon's director of optical transport network architecture and design.
Change will not be confined to the network: a struggle for protocol dominance is playing out within the data centre. The Internet Engineering Task Force (IETF) is developing several protocols while the Institute of Electrical and Electronics Engineers (IEEE) has its IEEE 802.1aq Shortest Path Bridging, which has broad applicability in networks as well as the data centre. The other data centre contender is OpenFlow.
"It will be interesting to see if a large internet data centre operator decides to embrace the OpenFlow concept at this very early stage of its development," said Joe Berthold, vice president of network architecture at Ciena.
Meanwhile, the optical component market is expected to have a sluggish start in 2012. 
Larry Schwerin, CEO of Capella Intelligent Subsystems expects more consolidation among the optical system and component players in 2012, a view shared by analyst, Eve Griliches, managing partner at ACG Research. 
"We'll definitely see some mergers and acquisitions – expect low acquisition prices too – and some companies exiting this market," said Griliches. "There are just more companies out there who can't support the declining margins. I think margin erosion will be key to who survives." 
Overall, market research firm LightCounting expects a smoother ride for the optical industry in 2012, especially given the significant disruption caused by last year's events such as the Japanese tsunami and the flooding in Thailand that affected manufacturing for several component vendors (see Thailand’s floods threaten optical manufacturing).
By Roy Rubenstein