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To reduce costs and simplify operations, carriers are deploying flexible optical networks that can be easily reconfigured and managed remotely. This article provides an overview of typical all-optical reconfigurable optical add/drop multiplexer (ROADM) systems and their associated network issues. We describe a novel digital optical network architecture based on digital ROADM systems, which use photonic integrated circuits (PICs) to overcome many of these issues. Digital ROADM systems use monolithic PICs to integrate over 60 discrete optical components, including lasers, modulators and detectors, into a single pair of optical components, allowing cost-effective optical-electrical-optical conversion at every node. This also allows key functions such as service reconfiguration, add/drop and protection to be implemented in the digital domain, and enables de-coupling of service provisioning from optical link engineering, termed bandwidth virtualization. Finally, key deployment, reliability and operational metrics for PIC-based digital ROADM systems are presented.