A new market-research report from World Information Technologies (WIT-Northport, NY) says that the market for cabling within Internet data centers will grow to $600 million by 2005. The same market is currently valued at a little more than $100 million, the study says. That equates to approximately 30% growth over the six-year period.
"In 2000, the Internet data-center market is less than 4% of the local area network (LAN) cabling market," says Frank Murawski, who authored the study for WIT. "But by 2005, it is projected to be almost 15% of the LAN cabling market."
Murawski, who recently authored a separate WIT study that forecasts an overall growth rate of 5% for the LAN cabling market in the next five years, points to this study's projected 30% growth rate as an opportunity for many vendors that currently serve the LAN cabling industry. But, he says, the data-center market itself has several segments, and some will fare better than others.
Three market segments
"From analysis of the internal system-architecture requirements within these data centers, it became clear that there were three distinct markets for cabling systems used in this application," Murawski explains:
Hosting data-centers. Here, service providers have large physical locations to place servers and the networking equipment needed to connect to the Internet. Either the provider or the client can own the servers; a setup in which the client owns the servers is said to be a colocation environment. In an arrangement such as this, the hosting site can provide add-on services, such as specific system software, or application support. "All of these services require cabling the server farms into a local area network, and connecting these networks to data-communications equipment located in the site," Murawski says.Internet access providers. The organizations in this segment offer connectivity from clients' remote locations to the Internet. The study considers only commercial-access users in this market segment, not mass-market Internet service providers (ISPs) like America Online. "The Internet service provider needs internal cabling to connect the input telco lines to the ISP's server access nodes," Murawski continues. "The relationship of this market to Internet data centers is that it provides remote workers access to Web servers via the Internet. Alternately, if the business has its own Web servers at the corporation's headquarters, it provides access, via the Internet, to these Web servers."Internet connections of corporations' own Web server sites. "These sites are identical to an ISP's site, but on a smaller scale with less complex networking equipment," says Mur-awski. "Whereas a colocation service provider will have thousands of servers, the corporation's private site will typically have hundreds of servers. The ISP's site will have specialized networking hardware and software for load balancing and optimizing the transmission paths, while the corporation needs only simple routing devices to access the Internet."The study identifies six points of connection within these data centers that require significant amounts of cabling, and suggests the media types that could be used to make these connections. For example, connecting servers to switches can be accomplished through unshielded twisted-pair (UTP) or fiber-optic cabling. Either media type can also connect LAN switches to other pieces of networking equipment. The study says that fiber-optic cabling will be used to connect the highest-speed networking gear, such as from the server farms' main crossconnects to pieces of networking equipment.
Multipair telephone-grade cable can connect multiple incoming dial-up lines into the data center, the study says. And multipair shielded cabling can connect multiple T1 lines into the data center. Finally, multipair coaxial cables can connect multiple DS3 or DS4 lines into the data center.
Demand for specialized products
"The largest market opportunity in the future will be Category 6 UTP cabling, for use in connecting the server farms," Murawski declares. He also says that the hosting data-center segment of the overall market is "the leading segment, by far. It accounts for about 90% of the total market throughout the forecast period." He says that the segment made up of corporations' own site-server connections will, for the most part, use the same products that the hosting data-center segment uses.
But the segment consisting of access providers "poses a separate opportunity for specialized cables, including multipair UTP POTS, multipair STP, and coaxial cables," Murawski contends. "Even though it is the smallest market segment, it currently is experiencing huge demand, as these specialized cables are currently in short supply." He says many former suppliers of these cable types have discontinued supplying these types, which were previously geared primarily for telephone-company central offices. "With low growth in central-office cables over past years, many suppliers decided to discontinue supplying these cables," Murawski notes. "The renewed interest in these specialized cables is directly attributed to this new market application. In a sense, these new data centers are becoming the central offices of the future, requiring similar cabling products."
The study is titled Internet Data Cabling Market, which Murawski prepared in collaboration with WIT's Amadee Bender. For further information on the study, you can reach Murawski at (717) 533-4990, or Bender at (631) 754-5700.
-Patrick McLaughlin
Hosting company places $2.1 million order
Giving some credence to the projections made in WIT's study on Internet data centers, Optical Cable Corp. (Roanoke, VA) recently reported that it received a $2.1 million order from an Internet hosting company. The order is for approximately 1 million feet of fiber-optic cable, scheduled for delivery between November 2000 and April 2001.
OCC says the cable will be installed at the customer's data centers throughout the country. It is the largest single order in Optical Cable Corp.'s history.