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

flanker 12/4/2012 | 8:04:35 PM
re: 40 Gbit/s Takes the Slow Lane It's ironic that the posters who think 40G has a future are the same people who were arguing a few weeks back that Internet traffic is declining.
Petabit 12/4/2012 | 8:04:36 PM
re: 40 Gbit/s Takes the Slow Lane Hey Peter, you know I've got this really great story idea. It goes like this:

First, do a story emphasising the positive nature of a new technology. Pick something that loads of people have jobs doing, like 40G. There will always be a few with the opposite view, so that should get some really good traffic on the message boards. Lots of nice readers to boost those advertising rates.

Second, and this is part I love, a few weeks later do a story with completely the opposite spin. You know, like '40G will never work'. Then you get everyone arguing again. More traffic, and higher advertising rates. Brilliant isn't it.

Oh wait. You've already done it. Shoot.

Never mind I'll think of another topic soon. How about all-optical networks? Or PMD compensation? Or modulation formats? Solitions (that's always a winner)?

Superman 12/4/2012 | 8:05:39 PM
re: 40 Gbit/s Takes the Slow Lane Thanks. Where can I get this info? Is it on the web?

Also, if any company designs 40G clock and data recovery in DRO technology, will there will be demand for it? I don't think PLL will work on 40G. There has to be single module for 40G clock and data recovery. Am I right?

Super Mario 12/4/2012 | 8:05:59 PM
re: 40 Gbit/s Takes the Slow Lane Have a look at this...

M. Reinhold et. al., "A Fully-Integrated 40Gb/s Clock and Data Recovery / 1:4 DEMUX IC in SiGe Technology", ISSCC 2001, Digest of Technical Papers, pp. 84-85, Feb. 2001
eewanco 12/4/2012 | 8:06:01 PM
re: 40 Gbit/s Takes the Slow Lane Having recently experienced first-hand the limited availability of OC-48 components and equipment, and seen the immaturity of (and apparent lack of significant demand for) OC-192, I said to myself, when I saw the big LR coverstory on "Why you need 40 Gbps [now]", "You guys are nuts." I was even more convinced of this fact when I actually read the article. The hubris was astonishing (I loved the part that talked about how "as we all now know" it was that Nortel won its bet on OC-192, when in fact they are not only falling apart, but killed a major OC-192 product recently). It looked like researchers have barely figured out how to do it yet, much less make it feasible and cost effective.

Nice to see a later article somewhat justify my skepticism.

That's not to say that 40 Gbps won't eventually be needed. I'm sure it will. But I don't see the industry as a whole clamoring for it anytime soon; especially on a significant scale.

voyeur 12/4/2012 | 8:06:02 PM
re: 40 Gbit/s Takes the Slow Lane Phos,

I am not one to quibble about the waste of time and money on 40G now. I do believe it will be needed but I don't think the takeup will accelerate until a few years from now.

I do have an issue about what you say about DSL. The main proponents were the CLEC's, since they could get more services through that route. But since they didn't have local access to the customer (read - "Had to go through the RBOC's"), they would never get it to pay off. And for the RBOC's, they basically had no incentive to roll out DSL. Their mantra "Why offer DSL when we already offer T-1, etc at higher prices?" Until there is true competition at the local level, where RBOC's compete against RBOC's, 40G, 10G Ethernet, FTTH, xDSL, etc will be pipedreams for the common folk. I am kind of hoping the cable folks can light a fire under them (but then again, they are monopolists, too)
phos 12/4/2012 | 8:06:02 PM
re: 40 Gbit/s Takes the Slow Lane fhe...no I was not one of those who said that 28.8 was overkill...because I knew that the outside potential for the existing UTP plant could handle up to 10 mps with expensive conditioning...but as the inablility for RBOCs CLEC's and others have proven, DSL has not been able to cost effectively perform!!! No matter how much money is spent after a while you need to cut bait!

40 gig is in that same category!!! Network providers will spend billions trying to make it work but, in the last analysis, they will cut bait...my question is why waste the money now? So many times we see the herd head down a path you know that one that ends at the cliff, and with inertia...the ones in the front end up at the bottom and the ones in the back, don't know any better and follow to!

Superman 12/4/2012 | 8:06:03 PM
re: 40 Gbit/s Takes the Slow Lane Does anyone know how clock and data recovery should work on 40G? Is it going to be PLL or DRO method? Who is currently working on this single module?
fhe 12/4/2012 | 8:06:03 PM
re: 40 Gbit/s Takes the Slow Lane 40G is dead? Come again?

You guys were probably the ones who said 28.8 was an overkill when you were using 9600; or you say broadband access is more than enough when you are *STILL* using 14400 modems *currently*...

plcornet 12/4/2012 | 8:06:04 PM
re: 40 Gbit/s Takes the Slow Lane Ok you brainiacs. It boils down to cost. If it is cheaper to pack it tighter, thts the way the industry will go. If 40g is cheaper, then thats the direction.

For long haul applications, the other factor is which one will be easiest to integrate into existing networks. Obviously, there is not going to be very many coorporations building any new networks for awhile (reference 360), so the big push in today's market will focus on existing networks.

Inregards to Metro, reference the 1st paragraph.

Both technologies are valid, and both will eventually be used in accordance with the different characteristics of each technology. One will not win out against the other. They will just be used in different applications.
mma 12/4/2012 | 8:06:05 PM
re: 40 Gbit/s Takes the Slow Lane 10-Meg Ethernet, 100-Meg Ethernet, 1-Gig Ethernet, 10-Gig Ethernet ...

Doesn't 100-Gig come next?
realguy 12/4/2012 | 8:06:12 PM
re: 40 Gbit/s Takes the Slow Lane Why? because I said so!
realguy 12/4/2012 | 8:06:13 PM
re: 40 Gbit/s Takes the Slow Lane $1M for PMD compensator! Frankly I think this is cheap! if it really solves the problem. PMD is not quite understood anyway. If PMD mixes with nonlinearities in the fiber, there is no way the signal can be corrected. The only solution to PMD is becoming smart and avoid it all together. Stay at 10G and 2.5G and relax.
gpearson 12/4/2012 | 8:06:13 PM
re: 40 Gbit/s Takes the Slow Lane The dispersion problems are more or less an LD issue. In Metro networks, 40-Gig will save a good bit of interface real estate. Floor space has a cost, too.

Assumes, of course, there is an ecomony of scale to make 40-Gig pipes a requirement in the Metro space. For the short term, I think LR called it right. 40-Gig will not be ready for prime time in the near term.

By the way, in a conversation with a supplier working on 40-Gig, the suggested cost for an adaptive PMD (polarization mode dispersion) compensator was close to $1M. Of course, that's a prototype cost, not production. But, it does emphasize how far 40-Gig has to go before it becomes commercially viable (at least for the LD market.)
Half-Inch Stud 12/4/2012 | 8:06:14 PM
re: 40 Gbit/s Takes the Slow Lane Long-Haul is unfavorable to 40Gig signaling for more than one compelling reason; Comparative Hardware costs, Signal/Noise compromise at Modulation, Clock Jitter, and the dispersion.

Sure, Dispersion is the show-stopper in and all-bad arguement. Besides, Edge card strategy now tracks the ISP strategy; build as you grow, rather than overbuild and wait. Upgrades should only occur when they have to.

Upon entering the COs, the Edge/Core, Router/Switch has to DeMux the 40Gig string anyway...Remind me again, who wants to do all that? And for what functional benefit?

"Wax On....Wax Off"
"But Why??"
"You no ask. you wax-on wax-off...like this"
"I'm done"
"OK, tomorrow you paint all this."
"But Why?!"
"you no ask....

40gig, it builds character, nothing else."

H.I. Stud

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!

doublebait 12/4/2012 | 8:06:15 PM
re: 40 Gbit/s Takes the Slow Lane Small thinking only leads to small ideas.
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 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.

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.

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.

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

Long live 40Gig.
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