Cleareon has just announced our acquisition of Pangaea Networks, a provider of metro Ethernet services in the NYC metro region, creating a complete optical and Ethernet offering for service providers and large enterprise customers.
So why this deal, and why now? According to IHS Infonetics (NYSE: IHS) the demand for 1 Gigabit, 2.5 Gigabit, 10 Gigabit, 40 Gigabit and 100 Gigabit optical and Ethernet ports is growing at an unprecedented rate, a leading indicator for continued rapid growth of the overall fiber services market.
New York City’s economy is thriving and the city itself is investing in programs to attract more and more technology companies. While the financial markets have changed, and financial trading technology has changed with it, the Fin Tech revolution is driving more and more innovation which requires real-time data processing over secure high speed and highly available networks, often low latency networks when seconds can mean millions.
In the city, dozens of hospitals and medical universities are doing research that can change the way we live and heal. New York City is also a leader in Smart City technology, including its roll out of programs that are turning what were “phone booths” into WiFi hotspots, charging stations, and multimedia communications hubs.
New York City has long been revered as one of the media and entertainment capitals of the world, and as more and more content is streaming and on-demand, given the tremendous disruption in “scheduled TV,” even the most advanced fiber optic networks rolled out over the last ten years are now straining to deliver for businesses and consumers.
According to a recent report by Insight Research Corp., the U.S. Public Ethernet market alone is expected to surpass $10 billion in size this year, driven by strong bandwidth demand. And a big chunk of that Ethernet market is right here in Manhattan and its densely populated surroundings.
While the scope of the Ethernet market opportunity is massive overall, Cleareon, now combined with Pangaea is ideally situated to address the New York metro area, which has the largest telecom spend in the world.
The Center for Urban Future’s report titled New Tech City outlined the resurgence of the tech community in New York and lack of adequate bandwidth.
Moreover, in the span of the last five years, the dark fiber industry has steadily built up its annual revenue to more than $1 billion at a CAGR of 11 percent, according to research from IBISWorld. Growth is expected to continue well into 2020, driven by:
1. the rise of real time multimedia streaming and on-demand services
2. massive expansion of private and public cloud services
3. growth of mobile traffic supported by fiber particularly in metro areas
4. the exponential growth of the Internet of Things
5. the advancement of digital services in applications including smart cities (in highly populated areas in particular, including New York City)
6. growth of digital technology companies, and
7. the growth of digital services inside of traditional large enterprises including in the financial services, pharma, healthcare, media and entertainment verticals.
In alignment with the growth of dark fiber is the demand for “lit fiber” in tens of thousands of buildings in NYC and the surrounding metro area. Whether access to fiber is deployed through Ethernet over Private Line (EPL), over Sonet (EoS) or over Private Network (EPN), Ethernet services are solving the need for last mile quality, performance, security and resiliency.
So why has Cleareon’s team and our investors made this move at this time?
As demand for network capacity, speed and security continues to grow, particularly in New York City and surrounding areas densely populated with enterprises whose digital businesses are growing, Cleareon is now able to provision, manage and expand ultra-high speed access and transport network services which are becoming increasingly “mission critical” to so many enterprises, start-ups and consumers.
Thanks for following us as Cleareon continues to act on its vision and strategy to bring the best of both worlds – dark and lit fiber – to service providers and enterprises in the city that never sleeps and beyond. We also represent a vibrant channel to telecom service providers whose networks can help customers that connect to the Cleareon fiber network go anywhere in the world.