Infinera Slices & Dices Its 500G
Infinera Corp. (Nasdaq: INFN) is letting customers activate bandwidth on the DTN-X system in increments of 100 Gbit/s, a kind of installment plan that might help even out costs.
The company has made a big deal of the fact the DTN-X can produce 500Gbit/s superchannels from one line card. The new model, called Instant Bandwidth, divides that into 100Gbit/s increments that customers can activate themselves, paying accordingly.
Telia Carrier is being announced as the first customer for the new model and will be deploying its DTN-Xs later this month. Instant Bandwidth requires a new line card, different from the original 500bit/s one. The first 100Gbit/s comes already activated: after all, it would kinda suck to ship a line card with 0Gbit/s of capacity available... Why this matters
Presumably, Infinera thinks Instant Bandwidth will increase sales or at least make the DTN-X more palatable to some customers. Installing one of the systems is a big decision, which makes Infinera's revenues and profits uneven from quarter to quarter. The effect on Infinera's profits is yet to be determined, however. The company's earnings rely on the sale of line cards, which carry a better margin than the DTN-X common equipment (i.e., the main chassis). Now, though, it's possible to essentially buy one-fifth of a card at a time. That means it could take a little longer for each customer to really start boosting profits for Infinera. Mike Capuano, Infinera's vice president of marketing, is sanguine about that: "Once the thing gets rolling, it will all smooth out," he says. For more
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