The market is in a period of rapid adoption of higher speeds led by the hypserscalers. The industry used 2016 and 2017 to adopt 25 Gbps and 100 Gbps port speeds based on 25 Gbps SERDES technology. As we enter 2018, those same hyperscalers are about to adopt 50 Gbps, 200 Gbps, and 400 Gbps port speeds based on 50 Gbps SERDES at a record shattering pace. In the data center alone, there are now eight unique port speeds, with countless more unique variations of form factor and pluggable distance.
The market will need additional bandwidth beyond what is currently available today. Several of these technologies were highlighted at the OIF Forum conference. 100 Gbps SERDES will help drive the industry towards that goal. Looking forward, 100 Gbps SERDES will help drive wave two of 400 Gbps, which will help enable Ethernet to extend its reach well outside of short reach data center distances. At the same time, it will also have a long life, with use cases ranging from enterprise to service provider.
The big question often asked is why after so many years for the market to adopt 10 Gbps, will we suddenly see a more rapid pace of adoption going forward?
There are many reason why, but we should look at a few things are different this time. First, the hyperscalers are a new type of customer. Hyperscalers truly bring a new scale to networking and compute in a way that makes the traditional SPs look small. Second, SDN, the hyperscalers have done something unique here that often gets overlooked that is occurring right now, in the second half of this decade. Hyperscalers are increasing the utilization rate of their compute and networking resources. For compute, this is approaching 100% utilization so the industry is in a period where hyperscalers, using SDN are able to grow network bandwidth at a pace faster than what the CPU is scaling.
This more rapid pace will not continue forever, but is one of the reasons why innovation over the next several years will occur more rapidly than historic norms and why it will be important for the industry to think about how to invest across speeds and technologies in order to better leverage existing investments. If not, the pace of innovation will simply be too much to recoup investment in the compresses timelines we are currently in.