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Optical Networking: All Grown Up

Light Reading
News Analysis
Light Reading
4/12/2005
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NEW YORK -- Light Reading's The Future of Optical Networking Conference -- To heck with the economy: Optical networking technology has been marching forward, in all shapes and forms.

In front of a packed house here, incumbent equipment providers, startups, and service providers presented various visions of cutting-edge optical networking technology to an audience that included both service providers and investors.

One thing's clear: Even during a downturn in the financial fortunes of the telecom industry, technology has been marching steadily forward. After years of progressing from hype to reality, it was clear from company presentations that there is a wide range of optical technologies now available and ready for deployment by service providers.

"The ability to switch wavelengths is fundamentally mature," noted Scott Clavenna, Heavy Reading chief analyst and the moderator of the conference.

The companies seem more mature, too. Most of the equipment vendors preferred to talk about technology deployed with paying customers, rather than science projects that may never leave the lab.

The technology discussed included:

A key debate focused on how much money service providers are willing to spend to deploy ROADM technology. Whenever the word ROADM was dropped controversy followed, as not everybody appears to be on the ROADM bandwagon (see Optical IP Revisited).

"Is ROADM the buzzword of the year?" asked Serge Melle, the VP of technical marketing with Infinera, a technology provider that wasn't touting ROADM technology.

Much of that debate revolved around whether ROADM technology is too expensive to reach a mass market.

"ROADMs as a system are going to be more expensive than fixed OADMS, so there's no way to get them widely deployed until we fix the capex," said Mike Gassewitz, president and COO of Meriton. Meriton uses ROADM technology in some of its larger systems, but Gasswitz pointed to the benefits of more inexpensive optical technologies such as coarse wavelength-division multiplexing (CWDM) in access networks.

Fujitsu and Mahi sparred briefly after Fujitsu showed marketshare data supplied by RHK Inc., showing Fujitsu with 75 percent of ROADM market share worldwide (though some folks would argue that the market is still too small to haggle over).

"I don't mean to start a food fight... I was surprised that my colleague from Fujitsu said they had marketshare lead," said Ron Longo, VP of marketing with Mahi. "I can say we have 50 of our [ROADM] switches deployed, and by the end of the quarter we'll have 100 deployed. I believe we have the number one market share in ROADMs." (See Fujitsu Firms Its ROADM Resolve.)

William Erickson, Fujitsu senior VP of sales, marketing, and services said in response, "We don't make up our own charts... Ask RHK. We feel pretty good and revenues are going up."

Infinera stood out as a company with a wholly different optical game plan. Infinera makes its own integrated photonic circuit based on indium phosphide that provides both OEO switching and amplification. The idea is that by lowering the cost of electrical parts and integrating them in one optical chip, systems can get the benefit of both optical capacity and the intelligence of being able to manage the links through the electrical interface.

Infinera's director of marketing, Rick Dodd, claimed that Infinera's entire system can be deployed in a matter of hours, citing a live deployment at Freenet.de AG in Germany, where Infinera's DWDM system has been deployed in a backbone connecting IP routers (see Infinera Goes Live).

There were the inevitable skeptical questions from the audience, such as: "Companies such as Xros, Calient, and Lucent have tried all-optical and failed, why is it different now?"

"It's five years later, and the dust has settled, and it's companies like Lambda Optical that have survived," says Lenny Chin, that company's director of product marketing (see All-Optical Switch, Take Two). Chin says Lambda Optical is focusing on the government and research space, where there is real demand for high-capacity optical networks.

A keynote presenter at the conference, Craig Drinkhall, senior VP of product development and engineering with CLEC TelCove, appeared to give the crowd a lift, saying that the competitive service provider was seeing growth in enterprise data services and especially for backup and disaster recovery.

"It's a very healthy business... We intend to generate $100 million in EBITDA cashflow, and we will be investing most of that. We think the net service revenue growth will continue."

Drinkhall said TelCove's infrastructure was based primarily on Sonet technology from Fujitsu, but he said the carrier is starting to look at other technologies that are coming into the picture such as ROADM, Ethernet, and RPR.

"We use today a dedicated transport technology at the local loop level," said Drinkhall. "I think ROADM will take a big role, as well as RPR, in the local loop. We're confident that we will have ROADM and RPR technology in the network."

— R. Scott Raynovich, US Editor, Light Reading

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