An optical transceiver startup is preaching the benefits of the Optical Transport Network (OTN) protocol, saying it's got a way to extend the technology to more parts of the network and so reduce the number of devices carriers need to deploy.

Menara Networks began shipping commercial products in 2007, but it's using this week's OFC/NFOEC as a coming-out party. Two of its transceivers cover the XFP and 300-pin formats, and a third works for the Xenpak and X2 standards.

What makes the parts special, Menara says, is that a lot of the OTN management software has been integrated into the transceivers without violating the respective multisource agreements (MSAs). "Now the transceivers are not just Layer 1 optical, passing bits," says CEO Siraj Nour El-Ahmadi.

On paper, that means systems vendors wouldn't need to worry about including OTN's management features on linecards. "Some of our customers are people who know nothing about systems. They know IP routers, SAN switches -- it would be difficult for them to integrate that software into those switches," El-Ahmadi says.

Building these modules was harder to do than it sounds, he claims. Off-the-shelf OTN chips from companies such as Applied Micro Circuits Corp. (Nasdaq: AMCC) and Intel Corp. (Nasdaq: INTC) don't yet fit inside an XFP module, so Menara had to develop its own chips.

"It was quite a bit more difficult than we thought -- the power constraints, the software," El-Ahmadi says. "It kicked our butts for four years."

Menara is hardly the only believer in OTN; companies like Ciena Corp. (NYSE: CIEN) have actively plugged it as the future of optical networking. Part of OTN's promise is to provide one transport envelope to carry both Sonet and Ethernet traffic, creating a chance for those networks to converge. (See Optical Expo: A Look Ahead.)

But Menara thinks it can add to the promise of OTN by removing some equipment from the network. For starters, DWDM OTN modules can eliminate the need for DWDM transponders in a network; wavelengths could come right off a router or switch.

Cisco Systems Inc. (Nasdaq: CSCO) has been among the companies championing that idea, but Menara claims it's the first company to offer it in a pluggable format.

Menara also thinks its products could make dedicated Ethernet demarcation equipment redundant, because its transceivers would provide a monitoring point carriers could use for fault isolation. Moreover, El-Ahmadi says the transceivers are able to calculate bit error rates on a link, something other Ethernet gear can't do.

This part of the plan would involve producing products at lower speeds, suitable for customer premises equipment. "Our plan is to extend this all the way to 100 Mbit/s, not just 10 Gbit/s," El-Ahmadi says.

Menara hasn't announced any customers yet, but El-Ahmadi says the company has been "working with" Juniper Networks Inc. (NYSE: JNPR).

The company was founded by old hands in optical networking: El-Ahmadi and chief technology officer Salam El-Ahmadi both came from Qtera, which was acquired by Nortel Networks Ltd. during the bubble. (See Nortel Completes Acquisition of Qtera .)

Menara has raised $19 million in two rounds of funding from Applied Materials Ventures , Concept Ventures , Sigma Partners , and Spark Capital Partners LLC .

— Craig Matsumoto, West Coast Editor, Light Reading