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CTOs: 1 Year Makes All the Difference

CTOs must constantly grapple with where to put their precious R&D dollars and which teams across their global operations are best placed to tackle a particular project. This is a recurring theme from a series of interviews that my publication, Gazettabyte , is conducting with the CTOs of system vendors and component makers.

There are few surprises as to what the important networking technologies are: coherent for high-speed optical transmission, time-division multiplexing PON and DSL vectoring for access, IP and ROADMs.

No real surprises when it comes to networking trends either: optimization across the Layers 1 to 3, greater intelligence at the optical layer, and the rethink in wireless architecture with new smart antennas, amplifiers and the pooling of baseband processing in the cloud.

Vendors are also wrestling with the business opportunities of software developments such as smart billing and open APIs.

All the CTOs agree that networks are becoming smarter and better tailored to users' requirements.

But while the conversations about technologies and their significance are stimulating -- after all, who better to explain technologies than CTOs? -- it is the glimpses into the challenges the CTOs and their offices face, and the importance of innovation, that prove most interesting.

Alcatel-Lucent (NYSE: ALU)'s CTO Marcus Weldon makes the point that vendors now have an array of components to choose from -- a ready-made toolbox -- such that if a competitor vendor gains a market advantage, a competing technologically-competent solution can be made relatively quickly.

The best a vendor can hope for is a one-year technology lead, says Weldon. In the past that lead would be three to five years as vendors would have to make their own devices.

Yet if the duration of the lead has shortened, that one year still makes all the difference. It gets the vendor through the door with operators and gives them valuable insight into their plans. And that advantage, if it turns into a design win, can mean, in the case of wireless, a decade-long business engagement.

Veritical integration
Another interesting trend is the relative importance of being vertically integrated for optical component makers compared to system vendors.

System vendors active across telecom cannot justify the huge costs associated with making their own components and sub-systems. Vertical integration for component vendors makes much more sense as they can spread the cost of the various technologies across multiple system vendors and even other industries. This trend means that the component makers work far more closely and earlier in the design process with the system vendors.

And this highlights another development of recent years: the close interworking and deep conversations across all three layers of the telecom industry -- operators, systems and component makers. This is very different from a decade ago when operators and vendors were spoiled for choice when it came to the booming optical component industry and the hundreds of start-ups.

The art of innovation however is more nebulous, and is a constant worry for the CTOs.

The cross-industry conversations and brainstorming certainly help. JDSU (Nasdaq: JDSU; Toronto: JDU)'s Brandon Collins highlights how the company involves its specialist designers with as much insight as possible from these operator conversations to understand what operators are after and why. Such an appreciation of the context results in richer designs.

Ciena Corp. (NYSE: CIEN)'s Steve Alexander also highlights a CTO's responsibility in steering the company ship. Indeed the CTOs admit they struggle with how best to motivate and inspire their engineering teams, and in turn influence the wider company, each time they set a new technology course.

Not surprisingly, the CTOs say it is a challenge to keep abreast of technology developments. Broad and close relationships with customers and their clients certainly help.

Alcatel-Lucent's Weldon also highlights Wikipedia. It's somewhat derided, he says, but it is 80-90 percent right: "It gets you where you need to be and then you can go and look further into the detail."

— Roy Rubenstein, publisher & editor of Gazettabyte, special to Light Reading

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