Third-Party Fiber Optical Transceivers: An Opportunities for Data Center and 5G Applications
With the development of various IT solutions, the development of 5G applications, and the upgrade of data centers, a large number of optical module requirements have emerged in recent years. Among these optical modules, third-party modules are becoming more and more popular. This article will delve into why third-party optics will become popular and what opportunities it brings to 400G and 5G applications.
Why Third-Party Optics Is Getting Popular?
When third-party optics or compatible transceivers first appeared, people doubted their performance and compatibility compared to OEM transceivers (or original brand optics) provided by original equipment manufacturers. Therefore, OEM transceivers are usually used. After decades of development, third-party transceivers have proven their good quality. At the same time, many limitations have been found in OEM transceivers. OEM modules are much more expensive than third-party modules, and their services are very limited. For example, they do not support free upgrades, which is very important for network users.
In addition, compared with OEM transceivers, in addition to huge discounts (usually more than 80%) and free lifetime upgrades, third-party optical devices also support traditional OEM equipment such as OEM switches. As long as the product has been discontinued, it is difficult to find a matching transceiver from the original equipment manufacturer. Even if there are OEM products, it is not convenient to buy OEM transceivers when there are different OEM devices in a network. In this case, some third-party manufacturers can provide multi-party compatible transceivers, and some even provide recoding services to change module compatibility, help users solve incompatibility issues between different devices, and make better use of the OEM at hand Module.
Most importantly, third-party transceivers provide better services. According to the Sherman Antitrust Act, these transceivers have no effect on the warranty of OEM equipment. This is a federal law that stipulates that when users use third-party compatible products, the OEM cannot invalidate the warranty or other support. In short, third-party optics provide the same test quality as OEM transceivers, but at a much lower cost and lifetime warranty. In view of all the advantages over OEM modules, third-party transceivers have become a necessity.
Third-Party Transceiver Current Status and Trends
With the rise of third-party transceivers, many third-party vendors have emerged. The price of transceivers provided by these manufacturers is much lower than that of OEMs, but the quality is the same and the service is better. This is conducive to the rapid development of third-party optics, and makes third-party optics have an increasing share in the optical transceiver market.
According to the forecast of Research Nester, a leading strategic market research and consulting service provider, by 2027, the global third-party transceiver market is expected to grow from US$620 million in 2017 to US$1.3556 billion. The year-on-year growth rate in 2027 will reach 8.18% compared with the previous years.
The Role of Third Party Optics in Data Center and 5G Applications
The global third-party optical transceiver market is booming with the support of two major market opportunities. One is the high-speed network requirements in emerging 5G networks and cloud solutions, and the other is data center upgrades, such as the transition to 400G.
No one knows what 5G infrastructure will look like, because it is still being tested. With the rapid update of technology, many pre-deployed modules are likely to be abandoned. Therefore, the deployment of equipment and modules at various stages, such as fronthaul, midhaul, and backhaul, requires cost-saving measures to reduce the risk of uncertainty. Third-party vendors provide cost-effective modules such as 10G WDM SFP+, 25G DWDM, and 100G QSFP28, which can help service providers reduce costs and similar risks to a certain extent.
As various applications lead to a dramatic increase in data center traffic, the demand for transceivers with high transmission rates (usually over 100G) is also increasing. Today, many third-party suppliers can provide 25G/40G/100G transceivers with the same performance as OEM modules. For modules with higher speeds such as 200G and 400G, it takes time to upgrade the data center of the entire industry. In this case, third-party transceivers have comprehensive advantages over OEM transceivers and can provide opportunities for testing and trial.
However, opportunities are often accompanied by challenges. Not all third-party transceiver vendors are created equal. Many small third-party module manufacturers cannot guarantee the quality of the transceiver, especially the newly released version like the 400G transceiver. These suppliers do not have qualified technical teams and equipment to test the performance of their products. Therefore, choosing a third-party transceiver with quality assurance testing is crucial, and it is also a major challenge faced by many third-party suppliers.
Another big challenge is that some OEMs lack hardware to support third-party modules, and they warn against using third-party optical transceivers. This requires third-party manufacturers to always provide qualified products and better services to win the trust of customers.
In summary, compared with OEM optical devices, third-party transceivers can not only provide advantages such as lower costs and better services, but also reduce the risk of using the latest technologies or applications such as 5G. Although the challenges remain, it is worthwhile to enter the third-party world.