Telecom Texas Hold 'em
Judging by the traffic patterns, optical networking seemed to be a lot more happening than whatever was on sale at the Galleria. And unlike the service providers at the local Macy's, most of the attendees of our event actually seemed happy.
There was even strange talk of things such as service-provider profits, end demand, and constraints in network capacity. Optical networks are filling up again, apparently. An AT&T Inc. (NYSE: T) bigwig told us we'll be running out of the stuff again by the end of the decade. So does that mean 2009 will be like 1999? (See AT&T VP: 100-Gig by 2010.)
If you don't believe that times are strange, we even heard service providers lament the lack of optical networking startups. (See Carriers: Show Me the (Optical) Startups.)
There seems to be some truth to this. While, yes, there are plenty of networking startups being tossed out like bagged spinach from California, the fact is that the few survivors, such as Infinera Corp. (Nasdaq: INFN), are drawing lots of service provider interest. Infinera appears to taking orders for long-haul optical DWDM systems as fast as the waitress at Dakota's jotted down our orders for prime dry-aged beef.
The first new optical networking startup in a long time – Matisse Networks – unveiled its strategy with an interesting concept called "EtherBurst." As handily illustrated with fancy animated PowerPoint slides that can make you dizzy, Matisse says it's building a metro optical switch that combines the characteristics of an optical ADM and an Ethernet switch – switching packets by assigning them different colors of light. (See Matisse Primes Metro Ethernet Makeovers.)
The technology looks promising. Now let's see if Matisse can sell some boxes before EtherBurst goes EtherBust.
So what about those service providers?
"Our revenue may be flat, but our profit margins are expanding with next-generation services," said Mike Jones, CTO of Broadwing Corp. (Nasdaq: BWNG).
Whaaa? Service provider? Profit margins?
Yes, he said. New Ethernet and MPLS services are selling like hotcakes, said Jones, a man who generates a fine soundbite. He also set the record straight on the infamous Corvis switches. It goes like this: Yes, they worked. Yes, they are still running. Yes, they are reliable. But Broadwing won't be needing any more of 'em. End of story. (See Infinera Gets Corvis (Sort Of).)
How about another Jones zinger: "The FCC is confused and will stay confused for a while."
By the way, is there anybody out there that doesn't yet have a reference to YouTube Inc. drawn up on your PowerPoint? Don't bother – it's too late. Apparently everybody else has already gotten the memo.
For the first time I heard a reference to a new form of ROADM, introduced by Fujitsu Network Communications Inc. , called a DOADM – a dynamic optical add/drop multiplexer. It was discussed by Rod Naphan, VP for business access and data planning.
DOADM (pronounced doe-dum) sounds like a handy reply for just about anything. What you doing tonight? DOADM. Having fun? DOADM.
Naphan made some interesting points. He says there will be 80 million users by 2010 that will have IPTV. He says GPON's the way to go, because the minimum bandwidth requirement for a "competitive" triple-play service will be 45 Mbit/s. And he points out that the bulk of residences, in North America at least, are beyond the 2,000 feet needed to extract the necessary capacity from DSL.
This, in turn will drive demand for ROADMs in the metro and DOADMs in the core of the network, says Naphan.
Heavy Reading senior analyst Graham Finnie appears to agree that we've got plenty of fiber in our future, and that bandwidth demand will be driven by video.
"HD [high definition TV] has implications for bandwidth, more and more streams, including upstream video. That's putting pressure on the network and leading to a 20-Mbit/s-plus requirement," said Finnie. "That's the main reason why we're seeing this transition to FTTH."
Okay, so 45 Mbit/s? 20+ Mbit/s? Which is it? What exactly do you need for triple play?
"Everybody's talking about 50 Meg for a reasonable triple-play offering," said Jon Baldry, technical marketing manager at Transmode Systems AB .
So, really, the bandwidth required for advanced services via FTTH is starting to sound like a game of Texas Hold 'Em. Anyone care to raise?
The IPTV panelists, including representatives from Transmode, Lucent Technologies Inc. (NYSE: LU), and Cisco Systems Inc. (Nasdaq: CSCO), pointed out that an HDTV and FTTH growth phase only means good things for DWDM – and ROADMs.
"IPTV will be the primary driver of bandwidth growth," said Donald E. Crowe, Director and CTO for multimedia networking solutions at Lucent. "That's driving a lot of this bandwidth. It's amazing the ripple effect it's having on metro networks and transport networks."
Jeff Fishburn, CTO of municipal networking builder DynamicCity Inc. , let this little nugget slip: He said that Seattle and Portland are eyeing municipal FTTH buildouts. And he makes the point that RBOCs likely can't keep up with demand. "We have a business model where if customers want it, we can supply it," he says.
Okay, I'm "all in" on the FTTH stakes. If there's no limit to this game, I call with 100 Mbit/s.
— R. Scott Raynovich, Editor in Chief, Light Reading