The underlying demand for optical networking solutions is driven by the continued growth in data traffic. According to Cisco, overall data traffic over Internet Protocol grew 45% in 2009 to reach an annual run rate of 176 exabytes per year and is expected to quadruple by 2015. The strong growth in traffic is being driven by the proliferation of bandwidth rich services (for example video, cloud services, mobile data) and availability of high speed connectivity for residential, enterprise and mobile customers.

The optical networking market is commonly divided into long haul and metro networks. Long haul networks typically carry data across distances in excess of 1,500 km, for example between the east and west coast of the USA. Metro networks range in size from smaller access and campus networks of only a few km through to larger networks of up to 1,500 km covering cities and regions.

Metro networks is divided into metro core and metro access networks where metro access typically includes second mile (backhaul from cell sites, local exchanges, and enterprises etc.), but not first mile access, for instance fiber connected homes. Metro access then feeds into the metro core networks.

Right from the start, Transmode chose to address the segment metro networks based on WDM and packet optical technologies. This segment, that Infonetics Research calls "Metro WDM", is in high growth and includes an array of midsized alternative operators and CableTV operators whose requirements for flexible and scalable products are a very good fit with Transmode.