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40 Gbit/s Takes the Slow Lane

BALTIMORE — NFOEC — Executives from several top optical networking companies splashed cold water on 40-Gbit/s technology at an investment conference held here yesterday at the NFOEC (National Fiber Optic Engineers Conference).

A panel of executives told a packed house of investors, engineers, and fellow vendors that they have pushed back their estimates for widespread deployment of the 40-Gbit/s technology until at least 2003 or 2004.

“We’ve been aggressively developing 40 Gbit/s,” said Ira Deyhimy, vice president of product development for Vitesse Semiconductor Corp. (Nasdaq: VTSS), at the conference organized by CIBC World Markets. “We thought 40-Gbit/s sales would ramp up in late 2001. Now we’re saying it will be more like late 2003 or 2004.”

The 40-Gbit/s question seemed to dominate discussion during two panel discussions centered around optical components and optical networking systems.

Top executives from some of the leading component companies in the industry — including Fred Leonberger, CTO of JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU); Frank Levinson, CTO of Finisar Corp. (Nasdaq: FNSR); Ira Deyhimy of Vitesse; and Henry Yaffe, CTO of Yafo Networks — voiced the general consensus that the uptake for 40-Gbit/s technology has slowed considerably from what they had once predicted.

The sentiment was echoed by optical system providers during another panel discussion. Elizabeth Perry, senior vice president at Ciena Corp. (Nasdaq: CIEN), said she doesn’t expect high volume shipments of 40-Gbit/s technology in Ciena long-haul products for some time. And Chris Hamilton, chief technologist, from Williams Communications Group (NYSE: WCG), the only carrier involved in any of the panel discussions, said he doesn’t yet see a need for 40-Gbit/s link deployments in most stretches of his company’s network.

There are several factors behind the delay in deployment. For one, developing new high-speed technology is never easy. At 40 Gbit/s there are many complications associated with the packaging of components and the physics involved in such high-speed transmission.

“At 40 gig there is an inescapable dispersion problem,” said Yafo's Yaffe. “We can probably deal with it, but at what cost? The cost equation really becomes critical.”

Dispersion occurs when a light signal spreads out over distance. These signals typically must be adjusted using special components. The problem grows particularly acute at higher speeds such as 40 Gbit/s.

While vendors like to tout faster and faster speeds, the reality is that many service providers haven’t completely adopted 10 Gbit/s and are still buying huge amounts of 2.5-Gbit/s gear. For example, Nortel Networks Corp. (NYSE/Toronto: NT) was one of the first companies to come out with 10-Gbit/s solutions, but now the company’s sales of 10-Gbit/s gear are beginning to flatten, say some analysts. Meanwhile, Ciena has actually seen a ramp-up in its OC48 (2.5 Gbit/s) sales. One reason is that carriers like Sprint Corp. (NYSE: FON), for example, haven’t moved to 10 Gbit/s as quickly as some had expected. And with 2.5-Gbit/s prices continuing to fall, it makes lower-speed technology an even more attractive choice in this capital constrained market.

But that doesn’t mean that component makers are completely sidelining their 40-Gbit/s developments. Fred Leonberger, of JDSU, says that his company can’t afford to put 40 Gbit/s on the back burner, because OEM customers are already looking for samples.

“Those of us working on 40-Gbit/s technology are still feeling pressure from OEMs,” he said. “They still have a clear vision of when they want the technology for their prototypes.”

While long-haul deployments of 40 Gbit/s may be two to three years away, short-reach applications are likely to be in customer trials sometime in the second half of next year, said Elizabeth Perry of Ciena. Analysts agree.

“Absolutely, 40-Gbit/s technology will be a reality quicker in short-reach applications like terabit routing than in long-haul applications,” says Jim Jungjohann, of CIBC. The reason? As IP data grows in the network core, carriers can use 40-Gbit/s links to hook multiple core routers together.

“The interconnect piece is where we will likely see 40 Gbit/s first,” said Perry in an interview after the panel discussion. “It makes sense, because you can use a VCSEL [vertical cavity surface emitting laser] array to make a cost-effective solution — and because the distances are so close, that isn’t an issue.”

The revised outlook for widespread 40-Gbit/s technology could affect many a startup that raised money on the premise that the market would develop sooner. Venture capitalists say that the life expectancy for most startups has been greatly reduced because of the lack of funding.

“Over the next 15 to 18 months, I see about 75 to 80 percent of these companies going away,” says Melissa Crane, a partner at VantagePoint Venture Partners. “The capital market is just so tight these days. The only hope some of these companies have is for a bigger company to buy them — because there just isn’t an IPO market right now.”

- Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com

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flanker 12/4/2012 | 8:06:20 PM
re: 40 Gbit/s Takes the Slow Lane 40 Gig is dead.

Long live 40Gig.
laserman 12/4/2012 | 8:06:19 PM
re: 40 Gbit/s Takes the Slow Lane 40 G is dead. Sorry Photonex. Clean up and go home!. We have 10G working. Long live 10G.

Laserman
cfaller 12/4/2012 | 8:06:19 PM
re: 40 Gbit/s Takes the Slow Lane Have any 40Gbps component and systems vendors given any thought to the law of diminishing returns?
equinox 12/4/2012 | 8:06:19 PM
re: 40 Gbit/s Takes the Slow Lane 40G will never die
PhotonGolf 12/4/2012 | 8:06:18 PM
re: 40 Gbit/s Takes the Slow Lane
Face it, when it is economical, it will happen. Duh!

The technologies are still being refined. Price points for some 40G technologies will not follow the 10G curves ... the entry point will be the same as 10G was just 18 months ago.

Tradition says 2.5x. I've heard those who would consider 4x ... just for the other efficiencies.

P
phos 12/4/2012 | 8:06:17 PM
re: 40 Gbit/s Takes the Slow Lane Ofcourse its economicsGă¬and thatGăÍs why I had predicted 40G was going to take the road off the cliff one and half years ago when smoke and mirror companies began promoting it. Among other data I had evaluated, I began recognizing 40 gig short comings after attending a conference back in 1997, when a speaker (J. Wilbur Hicks one of the original pioneers of fiber opticsGă¬according to the bio)...indicated that he felt going to 40 gig was "asinine" (note: I must admit it was a colorful speech to say the leastGă¬he claimed to have much contempt for the heard mentality that confronted the optical arena!) He said aside from other problems the dispersion issue would render going beyond 10 gig costly and futile.

I considered this view with a grain of salt until I began reading up on this guy. From what I had discoveredGă¬although being quite unconventional, it turns out he was the founder of the first independent fiber optic company even before CorningGă¬. He has something like 80 patents and some 1000 inventions going back to the early 60GăÍs in fiber optic technology. It was mentioned that he was one of the first to promote single mode fiber when everyone else was promoting graded index and was the first one to patent a practical Raman Amplifier in 1986 while with PolaroidGă¬(I guess even before the wonderful and heralded Huber acquired the concept and made it his own. Since then I believe several companies including SDL had licensed that patent among others from Polaroid according to an article I read in MIT Tech Review. In any case I began remembering back to what he had said and weighted it with a larger scale and realized this guy knew what he was talking about.

I reiterate its not that going to 40 gig or higher could not be done, quite frankly with enough money just about anything is possibleGă¬(i.e. 100 terabits lab test at lucent)Gă¬it is instead whether it is cost effective to do! Based on Hicks and now others, 40 gig will not be cost effective!!!!!!!!

Incidentally, I dislike it when others reference a scientist or a company but not mention itGă¬so not to be guilty of the sameGă¬

Gă¬according to a news article I read about 3 or 4 months ago, Hicks had been working with a stealth mode company, TON,LLC in Massachusetts on an GăúUltimate Fiber to the Home systemGăąGă¬some of the claims was that the system could bring 1 gigabit dedicated bandwidth to every building. At a cost of something like $1,200 per drop not including cable installation. I know I thought I miss read the number tooGă¬but thatGăÍs what it said!

Maybe with the market the way it is and the recent shake outGă¬smoke and mirror companies will give way to substance and innovative scienceGă¬at least we can hope!


Phos
phos 12/4/2012 | 8:06:17 PM
re: 40 Gbit/s Takes the Slow Lane Ofcourse
jmd 12/4/2012 | 8:06:17 PM
re: 40 Gbit/s Takes the Slow Lane Neither. Shelf it but get ready to dust it off real quick when real bandwidth demand arrives and the economics and physics are easier to deal with.

Imagine pushing 40G with the money men who are certain there's a bandwidth glut. You'd get 30 seconds into your presentation.
ivehadit 12/4/2012 | 8:06:17 PM
re: 40 Gbit/s Takes the Slow Lane if 40G requires new fiber, it will be used in new fiber builds, mostly in large metro areas or as intraoffice links.

there's a downturn in the market. thats the reason naysayers are out on 40G. we have to wait for a bandwidth driver application to justify deployment of 40G in longhaul.

phos 12/4/2012 | 8:06:15 PM
re: 40 Gbit/s Takes the Slow Lane What is your large thought doublebait...that the industry should push forward spending billions in a concept that ignores physics...dispersion is a reality...the small thought is following the lemings going down the same road like the 40 gig people have down for the last year...

The large thought is thinking outside the box with solutions that are obvious and simple!!!

Ofcourse...those whom have embraced 40 gig just one year ago, will be the ones stating with much veracity how, ridiculas that idea was when the laws of physics are once again remembered and the flavor of the month is more channels with tighter spacing!

...one side note...its going to be alot more difficult pulling the wool over the eyes of the money people this time around...albiet they are still amazingly stupid...they are much more suspicious today...although its true greed tends to erase sound judgement, when the hand gets burned the pitch will need to be based somewhat in sound science!

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