SAN DIEGO, Calif. -- OFC 2018 -- Following a tough couple of years, Infinera appears to be back in the optical transport saddle and ready to ride into town (well, San Diego) with a big pitch to the telcos and webscale giants planning future capacity upgrades.
After years of growth, the company hit something of a speedbump in 2017 after it lost momentum, struggled to avoid sliding sales and watched its share price deflate. (See Infinera Reports Q4 Loss, Infinera Shares Sink Along With Q3 Outlook and Tough Start to 2017 for Infinera.)
But Infinera Corp. (Nasdaq: INFN) is on the rebound. Its sales are edging up and looking stronger, its product line has had a strategic refresh and its stock has rocketed during the past month, gaining almost 73% since the start of February to trade at $11.27 at the close on March 9.
And the vendor's team has something new to talk about here at OFC with the launch of its new Infinite Capacity Engine (ICE), which, the vendor claims, is the "industry's first 2.4 Tbit/s optical engine." It's dubbed ICE5 because it incorporated the fifth generation of its PIC (photonic integrated circuit), the product that made Infinera's name. (See Infinera Unveils New ICE Optical Engine.)
Infinera is aiming to attract the attention of the major Internet services companies, which need increasing capacity on their data center interconnect (DCI) routes to support the growing volume of data flowing in and out of major data center facilities, and the telecom and cable companies that are coming to terms with the transport network requirements of a world dominated by video and cloud applications traffic. In particular, Infinera sees potential new business opportunities with cable companies that are migrating towards "fiber-deep" architectures. (See The Coming Fiber Construction Boom and Why Cable's Feasting on Fiber.)
ICE5 integrates the company's fifth-generation PIC with a FlexCoherent DSP (digital signal processor) and software-defined management to enable between 100 Gbit/s and 600 Gbit/s per wavelength and more than 40 Tbit/s on a single fiber. The vendor claims significant gains compared with ICE4 of 65% more capacity and 60% less power consumption. (And lower power consumption seems to be the key criterion for potential users, particularly the webscale giants.)
So the ICE5 is ready -- it will be demonstrated here at OFC this week -- but now it needs to be built into the company's systems for deployment in networks and it'll be about another year before operators can start to add ICE5-based boxes to their networks.
But it's also talking about ICE6 and the development cycle for that. The ICE was first unveiled in early 2016, so ICE5 comes 24 months later and ICE6 is being targeted for early 2020, and that's an R&D cycle that's much faster than the optical norm, according to David Heard, general manager of products and solutions at Infinera.
"We said we would reduce the cadence of our product development and we've done that -- we are now at 24-month cycles, down significantly from five-year cycles. We spent a lot of money last year in getting to a position where we're able to do that," stated Heard. "We believe we are now leading in terms of capacity and cost," and delivering a much lower total cost of ownership compared with current available products.
All of this, says Heard, provides customers with the information and insight they need to be able to plan their networks with certainty but also with a shorter product cycle in mind, one that fits more closely with the rate of pressure put on the required capacity of transport networks.
And with ICE6, Infinera believes it will be moving "closer to the Shannon limit" of what is physically possible in terms of data transport rates. We've heard such talk already around this OFC, from Nokia with its new DSP, but Infinera's team is keen to point out that its ICE is, of course, more than just a DSP. (See Nokia Pushes Optical to the Limit.)
The announcement of ICE6 (and some other product updates planned for OFC) comes at a good time for the company, as it is perceived to have turned a corner in its fortunes. Infinera has addressed its portfolio challenges -- it now has 1.2Tbit/s ICE4 line cards for the DTN-X, for example -- gained traction in the subsea systems market, and landed a major cable operator deal, which the financial analyst community believes to be with Charter Communications Inc. .
There's also hope that orders will once again start to flow from CenturyLink Inc. (NYSE: CTL), which put a dent in Infinera's sales line with its purchase and integration of Level 3, though this will in part depend on whether Infinera gets selected for CenturyLink's long-haul upgrade, which has yet to be decided. (See CenturyLink's Capex Axe to Fall on Infinera, Ciena – Analyst.)
In all, then, Infinera is heading into this year's OFC with a bigger smile on its corporate face than it's had for a while. Now it just needs to keep up with its own timelines and find a route into those new markets.
— Ray Le Maistre, Editor-in-Chief, Light Reading