DWDM or any WDM just enables you to utilize additional resource which is wavelength spectrum. DWDM is used in long distance high capacity transmission. Commmon used DWDM equipment is DWDM multiplexer, also there are DWDM SFP and DWDM SFP+ transceivers. You can have single high speed interface if it fills the requirement, you can have multiple low speed interfaces running parallel in WDM system, or You can have both highest speed interfaces and running parallel on most compact WDM. We have benefit a lot from DWDM technology, but you know the disadvantages?
-DWDM is very complex and can be very costly. However if your fiber is limited and you require the bandwidth DWDM provides, it may be more economical than the alternative of OSP overbuilding of your fiber plant. A good characterization study of your existing fiber and paths is highly recommended prior to planning and engineering a DWDM system. Sometimes that information is available from the installation testing, however over time that may change with new construction, relocations, splices, etc. PMD (polarization mode dispersion) witch is a dynamic factor in the fiber plant also needs to be addressed in DWDM path calculations.
-DWDM requires high quality optics and well cooled and stable lasers.
-DWDM is needed to keep all the signals in specific band. Band which is both most usable in optical cable as different wavelengths behave differently in optical cable. And also it depends on amplifiers as it is not easy to produce amplifier that amplifies very large spectrum area without additional problems or noise.
-DWDM is inherently more complex than separate glass and parallel links, as multiple signals share a cable, mixing them together and splitting them apart again. So more cost, more power, optical looses in filters and other components and harder to diagnose issues.
-In DWDM systems, one connector can carry a whole cable's-worth of traffic. If more than one connector is pulled and several incorrectly reconnected, the **** can truly hit the fan. Replacing, for instance, an amp (with DCM, OSC, and local connections) means everything disconnected has to be put back exactly as it was - or it might simply not work at all. Provisioning can be equally similarly disastrous. And these days, training exposure to these systems is minimal.
-DWDM network is not flexible network. For DWDM network flexibility, need to use ROADM( reconfigurable OADM) that are expensive.
-High losses, the attenuation is around 10 dB in some cases.
Compared with DWDM, CWDM is more forgiving, simpler to work with and cost less, but you have the lower number of waves and bandwidth. It takes some good financial and traffic planning to decide which is best for your requirements. CWDM mux gives you a cheaper color muxing scheme, but with more constraints on distances and so on.
In less demanding situations, CWDM can be used. As CWDM is not amplified it utilizes larger spectrum area and each channel uses wider spectrum range. Meaning it can be produced with cheaper components. But trade off is distance and maximum utilization of the spectrum.
In conclusion choosing DWDM or CWDM technology all depends on specific task.