Copyright © Ciena Corporation 2014. All rights reserved. Confidential and Proprietary

Mitch Simcoe: Ciena Industry Marketing

Ian Redpath: Ovum

June 2014

© Copyright Ovum. All rights reserved. Ovum is a subsidiary of Informa plc.3

Ovum: Data Center Update

Google: €450mn in Hamina, Finland Data Center (DC), 90

miles from Helsinki

ATT: $200mn DC in a Kings Mountain, N.C., 30 miles from

Charlotte, NC

IBM: $1.2bn for 15 DCs with one in Barrie, Ontario, 60 miles

from Toronto

NYSE is operating a 400,000 sqft DC in Mahwah, N.J., 30

miles from Manhattan

Banco Santander: 85,000m2 DC in Campinas, 60 miles from

Sao Paulo

DRT expanded their optical network by over 60 miles to

interconnect their suburban London DCs beyond the M25 in

Woking, Redhill and Crawley

All represent a data center interconnect (DCI)

opportunities and represent network extensions to

suburban and more “remote” sites

Evolving data center deployments catalyzing new connectivity

requirements, new optical network architectures and network

extensions

Many site selection criteria for choosing data center placement:

Power: Access to low cost, diverse-supply, reliable and with a climate conducive to

minimizing power costs

Fiber: Latency, access to diverse fiber, international cable landing hubs

Site costs: Real estate costs and government incentives

Diversity: “out of flood plain”, “out of seismically active region”, far enough for diversity

but close enough for access

Leading to changes in data center placement: to suburbs & remote regions

Data center interconnect ongoing transition to higher capacity

Existing optical networks consist of metro, regional and long haul network layers

and may not have been designed for the new data center era

DCI requirements are diverse, dependent on the business

model Segment the DCI market to play into the value

chain

Data centers: now extend well into the suburbs

Fareham

Milton Keynes

Welwyn

Perivale

Acton

Chessington

Whyteleafe

Redhill

Corsham

Ash

Data Centers

London

Central London & Docklands: the historic data center location

The metro optical networks expanded to the new data

center footprint

500,000sqft~200,000sqft ~200,000sqft500,000sqftFiber routes 120,000sqft

Optical traffic needs to transit to central Washington State

data centers

Rocky Reach 1.3GW

Rock Island 0.6GW

Wanapum 1.0GW

McNary 1.0GW

The Dalles 1.8GW

Portland

Seattle

The Dalles

Umatilla

Quincy

Another data center cluster has formed in central North

Carolina

Forest City

Lenoir

Maiden

Charlotte

Kings

Mountain

500,000 sqft1,000,000 sqft$1.2 billion600,000 sqft

The data center market continues to evolve

providing ongoing DCI opportunities

North America

49%

EMEA34%

Asia Pacific14%

South & Central America

3%

Data centers by region, 1Q14

Source: Ovum

Telco42%

Carrier Neutral

37%

Financial10%

Internet Content

4%

Other 7%

Data centers by operator, 1Q14

Source: Ovum

Source: Ovum: Datacenters: Defying Gravity, Sept 2012

•

•

•

•

•

•

PMO

View in animation mode

Source: Ciena CTO group

N x10GE N x 10GE

40/100G WDM 40/100G WDM40/100G WDM

Metro Extension Core

•

•

•

•

Metro Extension

Enterprise

Data Centre

Enterprise

Data Centre

•

•

(70km)

(1km)

(260km)

Passive Bridge

(70km)

(1km)

(260km)

N x 10G

Core

ROADM

N x 10G

View in animation mode

PMO

N x 10G

0

10

20

30

40

50

60

70

80

90

100

Back to Back Metro-Regional OTN Aggregation

•

•

•

Source: Ciena CTO group

OTN

Aggregation

(<40km)

(600 km)

(625 km)

(<30km)

View in animation mode

N x 10G

•

•

•

•

•

•

•

•

Opportunity for OTN

Switching

CTO Planning Group

Existing DWDM Plane

New Metro Rings

Predicted demand

Actual demand

Waste

Customer

dissatisfaction

On-demand capacity

View in animation mode

What does the customer need On-Demand Service Offer

min max

B/W

V-WAN

0

2

4

6

8

10

12

2013 2014 2015 2016 2017 2018

On-demand Services Forecast

On -demand Services

$B

Sources used in the analysis:

451 Research Cloud Computing as a Service, Gartner IaaS/PaaS/SaaS, 2013

AWS pricing for compute and storage in the cloud, PL market data

Long reach

transponder

40G/100G

Passive

bridge

min max

B/W

V-WAN

ValueGenerated through

De-costing

Value generated through

Revenue

Increase

100%

(cost of

traditional

networks)

40/100G

Express

Traditional

Metro-Regional

OTN

Mux

OTN

Switch

OTN Switch

+ V-WAN

15-20%

Capex

savings*

Revenue

10%-40%

Revenue

Increase

High static demand Low static demand Variable Demand

Opex

savings*

*vs PMO

40%

Capex

savings*

COST SAVINGS

REVENUE

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