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Optical/IP

AdvancedTCA Makes Headway

Advanced Telecom Computing Architecture (AdvancedTCA) -- an open standard for building telecom gear -- is gaining in popularity, judging by a new product announced today, on the eve of the CeBIT tradeshow in Hanover, Germany.

Telco Systems (BATM), an Israeli manufacturer of IP gear, is launching what it claims is the first IP-based platform built according to the AdvancedTCA specifications. The product, T6Pro, is a Layer 3 switch aimed at carriers and enterprises (see Telco Systems Intros T6Pro).

AdvancedTCA, also known as PICMG 3.x, is a family of specifications that defines a way of building the next generation of "carrier grade" telecom equipment with switching capacities up to 2.5 Tbit/s in a single shelf. The specifications contain enough information to allow board, backplane, and chassis vendors to independently develop products that will be interoperable when integrated together.

It is being developed by the PCI Industrial Computer Manufacturers Group (PICMG), a consortium of over 400 companies. More than 100 vendors are actively participating in the development of PICMG 3.x , making it the largest standardization effort in the organization's history. The key driver behind it is Intel Corp. (Nasdaq: INTC).

Motorola Inc. (NYSE: MOT), NEC Corp. (Nasdaq: NIPNY; Tokyo: 6701), and Siemens AG (NYSE: SI; Frankfurt: SIE) are working on wireless infrastructure based on AdvancedTCA, while Force Computers and Intel are developing computing-based platforms.

The idea behind the standard is that blades from one vendor could be incorporated into a chassis made by another vendor. "Today, if you look, you have a separate infrastructure for ATM, IP, wireless, storage, PSTN switches, and so on," says Danny Berko, BATM's product manager. "One day all services could be integrated into a single platform. The concept is any protocol on any card on any slot on an AdvancedTCA platform."

Whether this level of interoperability is a practical reality remains to be seen. Establishing standards and implementing them is a good start, but service providers will probably take a lot of convincing before they'll start mixing different vendors' cards in the same chassis. All the same, the existence of the standards will probably help drive down equipment prices, because it will lead to greater commoditization of subystems as well as the components that go into them (see Switch-Fabric Chipsets).

BATM claims to have sold its product to three major customers already -- the German Navy, the Israeli Army, and an Italian bank -- and a fourth customer in the U.S. is in the evaluation stage.

However, several key names in the IP world are missing from the AdvancedTCA standardization effort, most notably Cisco Systems Inc. (Nasdaq: CSCO).

"You will not see Cisco there, because it has a proprietary interface," Berko contends. The standards might weaken Cisco's ability to lock in carriers.

"While some still feel that hardware standardization will eliminate the ability to differentiate products, we disagree," says Ernie Bergstrom, principle analyst at Crystal Cube Consulting. "This is both a shallow and short-term view, and simply not true. Most vendors will keep their proprietary fabrics and backplanes until the architecture no longer scales to the required performance. The advent of ATCA may even shift the value proposition to the software domain where it belongs."

Cisco will be forced to jump on the AdvancedTCA bandwagon sooner or later when demand increases -- which it will, if recent market forecasts are to be believed. Indeed, RHK Inc. forecasts that the market for AdvancedTCA products will be worth $3.7 billion by 2007 (see ATCA to Be Worth $3.7B in 2007). Crystal Cube's forecast is more ambitious, predicting a market of $20 billion by 2007.

Cisco, for its part, says it is evaluating membership in PICMG. "Cisco subscribes to open standards interfaces leading to multi-vendor interoperability," the company wrote in an email to Light Reading. It declined to elaborate.

— Pauline Rigby, Senior Editor, Light Reading

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Sisyphus 12/5/2012 | 2:13:30 AM
re: AdvancedTCA Makes Headway > Guys, the reason that people do proprietary
> architectures is that they can be sold at a
> lower price.

This is repeated like a mantra in networking, but it's lunacy in the business 101 book. Yeah, the computer world sticks to proprietary chips like glue. So do consumer products. NOT. They rely on off the shelf components, and a modular architecture with clear standards. It's supply chain basics. Networking still likes to think it represents some sort of niche market, like building exploration pods for NASA, and suffers from NIH syndrome that affects cost points and hurts it, badly.

Alas, the future is inevitable. Good ole 80/20 rule: 80 percent of networking systems will be based on utterly standardized and modular building blocks, and a true 20% niche will not. In fact, the adoption of such dramatic cost reduction measures might fuel a new upturn, as it will deliver benefits to everybody.

Which standard it will exactly be I don't know. I am not sure ATCA truly gets everything right to cover 80% of applications, but it's all a learning process and we'll get there within 2 years or so at the most.
sevenbrooks 12/5/2012 | 2:13:26 AM
re: AdvancedTCA Makes Headway
Sorry but it happens to be true. The cost of silicon is fixed. You can either pay margin on top of the cost or not. If its not core to the business, people buy off the shelf ICs and go on their merry way. If its the core cost driver, better off to own it and save 50% or more. We have a case internally where the ASIC is 1/10th the cost of the off the shelf IC. They do the same job and have the same gate count.

That is directly out of the business 101 book. The lunacy is thinking that one can take undifferntiated product to market based on off the shelf designs (say any Network Processor) and build something that is advantaged (see every startup in the 1998 and 1999 classes). Thats why truly successful products are so rare.

seven
particle_man 12/5/2012 | 2:13:16 AM
re: AdvancedTCA Makes Headway The price of Silicon may be fixed, but the cost of developing ASICs is extremely variable to the point it can sink a company. There is risk developing ASICs and it is a business decision whether to go that way or not.

I don't think the question is whether to build a differentiated product, it is what is the source of the differentiation.

In many cased it is not the backplane, chassis, or processor boards. So why not but those from some standards based source? That means lower development costs and cheaper COGS. Then put your scare R&D resources into what makes your solution different - maybe control plane software, performance, or even ASICs - whatever you have chosen as your key advantage.
sevenbrooks 12/5/2012 | 2:13:14 AM
re: AdvancedTCA Makes Headway
Agreed you need to invest in what sets you apart (I think I said by standard stuff for things outside your core business). I think there are markets where COGS leadership is not the primary issue, however these markets tend to be niches (as I think I said before).

Bulk markets will, in the end, rely on COGS leadership. NREs in mass markets are irrelavent ($1M in NRE on 1 Million pieces/annum = $1/part in the first annum). It will be interesting to see say in Core Routing when Huawei gets its first real foothold in the US and starts selling its product at say 40% margin what will happen to Cisco.

seven
Sisyphus 12/5/2012 | 2:13:03 AM
re: AdvancedTCA Makes Headway > .. It will be interesting to see say in Core
> Routing when Huawei gets its first real
> foothold in the US and starts selling its
> product at say 40% margin what will happen to
> Cisco.

They'll sell at 0% margin for as long as it takes todiscourage someone moving in there. They have the warchest to do it. I am not saying Cisco is invulnerable, but to challenge it in its key business areas requires b*lls of such size those executing on such a strategy better have wheelbarrows to cart those around in. Cisco can fight, and when it fights it is successful. Which doesn't mean they'll keep a 70% dominance going in all key markets, but they know it, and that's why they are diversifying more into new areas of growth constantly, and have an annoying habit of being successful in 90% of the things they take on.

I think Huawei will gain success if they execute right, but I don't thinl it'll supplant Cisco in the infrastructure anytime soon. The little gorilla will annoy the hell out of Papa Silverback, but if it tries to take over too quickly it'll get stomped into the ground. Huawei will pick its niches at first.
Sisyphus 12/5/2012 | 2:13:03 AM
re: AdvancedTCA Makes Headway The price of silicon is only fixed if you brush ASIC development under the carpet as basic operational cost. I mean, come on, this is the typical way it's done in networking: margin is caculated from the BOM exclusively, the whole R&D effort is not considered, and it's never quite clear whether it pays off or not. When you suggest it, people look at you as if you were a lunatic. Your R&D is a mysterious "fixed cost" you don't factor into product line profitability. Networking is shaky in understanding the true business mechanics to sustained profitability, and the factor "luck" is required for ultimate profitabillty when you account for products like that. Either it is a huge hit, or you lose your shirt. It is quite astounding, really. Merchant silicon allows one to truly calculate profitability, which of course several ASIC development cszars have little interest in. Eventually, in several markets they will get their stubborn posteriors handed to them by new entrants that execute at lower risk and lower R&D with merchant modular components, and still manage to get in the key differentiator.

The second commandment of ASIC religion is that it is also a given that you have to blow said "fixed" R&D wad on developing ASICs, which is why the software teams that are kept on the side are hugely overloaded - there's not enough left in the pot to truly invest into software development, and consequently I would very conservatively estimate that at least 50% of the ASICs' features developed in networking are actualy never used in system. It's always a software limitation given the fact those engineering teams allocate their $ into the silicon, and chronically under-fund the software development.

The thrid commandment of ASIC religion is to chronically confuse "differentiators" with "ASICs". It's like saying the key differentiator of car is "pistons". Customers don't give a hoot whether you do things in silicon or software, they just want it to *work*. What they want to see from system vendors is the ability to roll out services flexibly. To see the "key" in the silicon is to be fascinated by the leaves in the tree, and not even remotely comprehend the actual forest.

It will still take a while to see the transition, but it is inevitable. Always has been, and networking isn't about to be the exception to the universal rule of things that happen when technologies go into commodotization mode. Ten years ago, building packet forwarding ASICs that did things wire-speed was an art. These days teams that can do that are a dime a dozen, and the result is a lowest common denominator platform that is fast, but doesn't do anything particularly useful for the customer.

Cisco and Juniper's ASIC religion is total fallacy: they are successful thanks to IOS and JunOS, and *despite* their ASIC religion. Someone's bound to notice eventually.

And yes, this is a bit over the top for the sake of a polarized argument. as I said, things are not as one-sided, and will not change overnight, and nowhere have I claimed ATCA is going to be the ultimate slayer of proprietary platforms. It's only a first humble step in the right direction right now, but perhaps will initiate a stampede. Let's enjoy the show as it unfolds, it will be interesting to see what happens as world collide. I am not sure the networking world realizes what they have coming their way once blade server architectures truly deliver on some of the visions they have right now...
Hias 12/5/2012 | 2:12:58 AM
re: AdvancedTCA Makes Headway How can ATCA, e.g. regarding rack, internal interfaces, be more expensive than proprietary equipment? I thought that ATCA stuff should become cheaper through competition on these issues.
sevenbrooks 12/5/2012 | 2:12:57 AM
re: AdvancedTCA Makes Headway
Sisyphus,

Telecom Equipment has been around longer than computing and has had at least 5 attempts to do this. And none of them worked.

Again for large scale markets the Opex associated with Engineering is interesting but certainly not relavent percentage of life cost. You can certainly do it for less R&D money, but at the end of the day what does the success of Alcatel and Adtran show us. BOM costs matter.

Lets take a look at a non-telecom, non-ASIC version of this. US Robotics and dial modems. What was their advantage? They hand coded (in assembly in many places) the modem controller into the DSP that ran the modem data pump. Thus, their BOM cost was less and they could make modems for less money. They made more money doing that than all the folks taking Rockwell modem chipsets and dumping them on boards, except for Rockwell.

So, its NOT just ASICs but they are a great and easy example. Its not inevitable. In fact, it has never been inevitable in the consumer space. Take a look at game stations. Lots of custom silicon there. Consumer products as well. Hunh. A single, 1, market has truly evolved the way you state.

seven

sevenbrooks 12/5/2012 | 2:12:57 AM
re: AdvancedTCA Makes Headway
It gets to be more expensive in 3 ways:

1 - Silicon costs: With ASICs you don't pay markups on the silicon to a merchant vendor. For core functionality, this can be a 50 - 90% savings.

2 - Markups on all those other items. So, you get a chassis from somebody who designs it and gets a CM to make it. Markup again.

3 - Unoptimized. Systems are targeted. Generic systems are not.

Now what are they good for, lowering the cost of development of said items. When does that matter? When you are not going to sell very many. So, for low volume (niche) applications off the shelf is a fine thing. Costs will be lower for those applications.

Compact PCI was going to take over the world as well right. And Telecom Bus. and and and

seven
sevenbrooks 12/5/2012 | 2:12:54 AM
re: AdvancedTCA Makes Headway
Perhaps you and I are having 2 discussions here. We are talking about an architecture that provides it all for you just write your application code. Just like the PC industry. That is flawed in telecom.

The place that standard semis fall apart is switch fabrics. They tend to be 10x what you can make them for. Even with the software costs. Line interfaces are pretty inexpensive but even there when an interface stabilizes, its attractive to go make your own (and save the 50% margin that you pay the semi guys).

seven
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