& cplSiteName &

The M&A Way to Achieve 400G Goals

Carolyn Mathas
News Analysis
Carolyn Mathas
3/27/2014
0%
100%

It was clear at OFC 2014 that service providers want flexible provisioning and seamless upgradeability for 100G and 400G.

While there were several products and capabilities discussed and introduced at the show, a couple of vendors stood out in terms of the depth of their portfolios, and both have a rich history of strategic acquisitions that have helped them get where they are today.

The companies are Altera Corp. (Nasdaq: ALTR) and Xilinx Inc. (Nasdaq: XLNX): In some ways, you could say they "bought their way" to achieving their initial 400G roadmap goals.

Altera's 400G story
At this year's OFC, Altera introduced OTN solutions for 400G that offered a defined path to 1 Tbit/s. New products included the TP0516 Altera SoftSilicon 400G Transponder/Muxponder and the TPOC226 SoftSilicon single-chip 20-channel any-rate mapper with segmentation and reassembly (SAR). The TPOC226 addresses advanced optical demultiplexer unit (ODU) cross-connect systems for OTN-based transport networks. These products represent what Altera claims are the first fully integrated 200G and 400G OTN solutions. (See Altera Introduces OTN Solutions for 400G and Beyond at OFC 2014.

Because Altera's SoftSilicon devices are available, and are built and validated on reference platforms that closely resemble target applications, system provider development risks are minimized. And, naturally, FPGA platforms also mitigate the risk, as requirements from both standards bodies and customers continue to morph.

"We believe our SoftSilicon technology, and the industry's first fully-integrated 200G and 400G OTN solutions, the TPOC226 and TPO516, will bring customers leading-edge process technology and superior power and performance advancements that will address their systems design challenges in optical transmission," said Scott Bibaud, senior vice president of Altera's Communications and Broadcast business.

So, how did Altera arrive at these products? Looking at the company's acquisition history gives a good indication. From its inception through its first 16 years, Altera went it alone. Then, in 1999 it bought a small Santa Cruz, Calif. company, Boulder Creek Engineering, for an undisclosed amount. What it got at the time was a technology called "Signal Tap," a logic analysis tool (not related to this). But what it ended up with was a new Santa Cruz division, up to its eyeballs in the development and launch of Altera's now-famous Nios. (See Altera Enhances Processor from 2001!)

Shopping spree begins
It wasn't until 2010 that Altera went shopping again, and this time the road would clearly move down the communications path. The eventual industry upgrade to 100G and 400G levels was inevitable, and optical protocol standards demanded unprecedented flexibility that application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs) could not provide.

Altera recognized that the programmability at the heart of FPGAs would be the logical solution.

With the December 2010 acquisition of Avalon Microelectronics, a small but recognized provider of silicon-proven customized IP for optical transport network (OTN), SONET/SDH and Ethernet, Altera expanded its portfolio of customizable IP solutions. (See 100G Watch: Chips Get Merger Fever.)

Avalon -- go ahead, sing along, you know you want to! -- not only was the sole IP supplier for the 100G OTN solutions implemented in Altera FPGAs, it also provided solutions to optical equipment manufacturers, test and measurement companies, and military contractors.

With its strong system expertise in transmission applications and detailed Altera FPGA knowledge, Avalon made sense as a buy. With the purchase, Altera promised relevant products, reduced solution costs, and a goal of market leadership in 400G/1Tbit/s OTN IP application development.

Over to OTN
There was a relatively short wait until the next acquisition. On April 30, 2013, Altera purchased T-Pack, a wholly owned subsidiary of Applied Micro Circuits, and its portfolio of FPGA-based optical transport network (OTN) products. T-Pack's SoftSilicon OTN solutions provide mapping, multiplexing and cross-connection of packets over OTN. The company pioneered standard chipset solutions that target FPGAs but are similar to ASSPs. As a result, T-Pack has displaced ASSPs for 10G, 40G, and 100G OEM designs. (See Altera Buys T-Pack From AppliedMicro.)

With the purchase, Altera also gained cost-optimized 10Gbit/s OTN mappers for metro applications and 10 x 10 Gbit/s OTN cross-connects using partial reconfiguration for Packet-Optical Transport Systems. The acquisition, combined with Avalon's capabilities, enabled Altera to accelerate and expand its OTN solutions roadmap and support.

Hot on the heels of T-Pack, in May 2013 Altera announced the acquisition of Enpirion, the developer of integrated power conversion products known as PowerSoCs, and integrated power management solutions for enterprise, telecom, industrial and storage segments. The company was recognized for its high efficiency, low noise characteristics, exceptional thermal performance, high reliability and ease-of-use. (See Altera to Deliver Breakthrough Power Solutions for FPGAs with Acquisition of Power Technology Innovator Enpirion.)

This deal, valued at about $141 million, gave Altera the key power technologies it needed, enabling it to develop the high-frequency switching, low-power, small footprint technology it needed.

"We are pleased with the quick results of our strategic acquisitions which enabled us to integrate IP, software APIs, and FPGAs creating what are very much like ASSPs, but which still provide the programmability to allow our customers to differentiate their systems," said Bibaud.

Sometimes, it's recognizing what you don't know, or don't have time to develop in-house, that is key to being a leader. Altera's strategic acquisitions clearly moved the company rapidly to the forefront in the OTN space.

In a separate article, I will look at how Xilinx has advanced its cause through M&A activities.

ó Carolyn Mathas, contributing editor, special to Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
CMathas
0%
100%
CMathas,
User Rank: Blogger
3/27/2014 | 9:16:24 PM
Re: Consolidation
Good one - we'll see consolidation as well as more interesting forms of financing, stay "tuned."

 
DOShea
50%
50%
DOShea,
User Rank: Blogger
3/27/2014 | 9:13:20 PM
Consolidation
I guess I think of the optical components sector being ripe for consolidation, but it sounds likes it has already been happening.

I'd say more, but just decided it was a good time to listen to the entire "Avalon" album again...
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
Verizon: Beware Unknown Unknowns

12|7|16   |   04:58   |   (0) comments


Chris Novak, director of the Verizon Enterprise Solutions Risk Team, explains that enterprises who don't conduct a thorough audit of their assets often leave some things unprotected because they don't know they exist. Many times these unprotected assets are part of corporate M&A activity but left unshielded they can become a hacker's playground, he tells Light ...
LRTV Interviews
ETSI's CTO Talks NFV, 5G & NGP

12|5|16   |   09:45   |   (0) comments


Adrian Scrase, CTO at standards body ETSI, talks about the various initiatives and specifications developments related to NFV, 5G and NGP (next-generation protocols) that will underpin next-gen networks.
Women in Comms Introduction Videos
Korn Ferry Consultant: How to Find, Cultivate & Be the Best Talent

11|30|16   |   4:10   |   (2) comments


Erin Callaghan, a managing consultant for Korn Ferry Futurestep, shares strategies for companies to improve how they recruit and for women to ensure they don't get lost in the pipeline.
LRTV Custom TV
We Can Make the World More Sustainable

11|29|16   |     |   (0) comments


GeSI is a global e-Sustainability Initiative organization bringing together 40 big multinational companies around the world. According to GeSI's report, information and communication technology can make the world more sustainable. Luis Neves, chairman of GeSI, shared with us his opinion at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
Finding a New Way to Engage Customers & Drive Revenue

11|29|16   |     |   (0) comments


Mobile revenues are declining. Digicel, a player in the Caribbean telecommunications/entertainment space, has found a new way to engage customers and drive revenue. John Quinn, CTO of Digicel, shared with us its story at Ultra-broadband Forum (UBBF2016)
LRTV Custom TV
Do You Really Need Gigabit Infrastructure?

11|29|16   |     |   (0) comments


Altibox is the biggest fiber-to-the-home (FTTH) player and the largest provider of video and TV in Norway. They started out with zero customers in 2002. Now they have close to half a million households and companies attached to their FTTH business. Nils Arne, CEO of Altibox shared with us their story and insight on 5G at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
BTís Openreach Strategy & Its Updates in 2016

11|29|16   |     |   (0) comments


A lot of developments at Openreach this year in terms of strategy and planned investments. Peter Bell, CIO of Openreach BT, shared with us the updates of Openreach at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
ITU: The Broadband Is Our Future

11|29|16   |     |   (0) comments


At Ultra-broadband Forum, Houlin Zhao, Secretary General of ITU, discussed how important it is for countries, companies and everybody to be working together to help to build the broadband and digital economies (UBBF2016).
LRTV Custom TV
Tackling 5G in Dallas

11|28|16   |     |   (0) comments


Here are our highlights of the 5G North America show in Dallas, Texas with Light Reading's Dan Jones.
LRTV Interviews
Cox Prepping for Virtualization Trials

11|14|16   |     |   (0) comments


In this video interview, Cox's Jeff Finkelstein discusses MSO's plans to test managed business services in early 2017 and tackle Distributed Access Architectures.
LRTV Custom TV
Drivers & Potential of NGP

11|11|16   |     |   (0) comments


ETSI has created an Industry Specification Group to work on Next Generation Protocols (NGP ISG), looking at evolving communications and networking protocols to provide the scale, security, mobility and ease of deployment required for the connected society of the 21st century. The NGP ISG will identify the requirements for next generation protocols and network ...
LRTV Custom TV
Huawei IP 2020 for Future Networks

11|11|16   |     |   (0) comments


Future Networks should satisfy many requirements such as high throughput, extremely low latency, flexible mobility, intrinsic security, networking automation, and so forth. The Chief Architect of Huawei Future Networks addresses a holistic solution, i.e., IP 2020, to achieve these requirements for various future life scenarios (e.g., autonomous driving, tactile ...
Upcoming Live Events
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Cable Nodes Becoming a Choke Point
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 12/5/2016
WiCipedia: After-School Coding, Salary Probing & Pro-Parenthood Companies
Eryn Leavens, Special Features & Copy Editor, 12/2/2016
Altice Plans FTTH for Entire US Footprint
Iain Morris, News Editor, 11/30/2016
Altice FTTH Bill Could Hit Almost $9.6B in US
Iain Morris, News Editor, 12/1/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
Live Digital Audio

Even when there's a strong pipeline of female talent in the comms industry, it tends to leak all the way to the top. McKinsey & Company says women experience pipeline leakage at three primary points: being unable to enter, being stuck in the middle or being locked out of the top. Each pipeline pain point presents its own challenges, but also opportunities to stop the leak. Wireless operator Sprint is making a conscious effort to improve its own pipeline from new recruits to the C-suite, and it wants the rest of the industry to do the same. In this Women in Comms radio show, WiC Board Member and Sprint Vice President of Enterprise Sales Nelly Pitocco will give us her take on the industry's pipeline challenges. Pitocco, who joined Sprint in May and has spent 20 years in the comms industry, will also offer solutions, share how Sprint is tackling the challenge within its own organization and take your questions live on air.