Components Standards: Key to Survival

LONDON -- Lightspeed Europe 02 -- What could turn out to be an important milestone in the evolution of the optical components industry was announced yesterday, when three big players unveiled a multisource agreement (MSA) for Arrayed Waveguide Gratings (AWGs) (see Alcatel Optronics, Hitachi, NEL Form MSA).

This is the first MSA for passive rather than active components, and it could prove to be the first of many. Major system vendors are pushing passive component suppliers into making standardized modules -- and the component suppliers themselves see big benefits in going down this route.

The drive towards standardization across all types of components is accelerating because of the industry downturn. System vendors have cut back on engineering staff and now want to buy in subsystems rather than build things from scratch. But they don't want to rely on a single subsystem supplier, particularly in the current environment when plenty of companies have an uncertain future.

These pressures appear to be pushing more than just AWG vendors towards proposing industry standards, judging from an example that cropped up at the Lightspeed Europe 02 conference and exhibition in London this week.

At the show, LightConnect Inc. briefed journalists on a new eight-channel variable optical attenuator (VOA) module with, according to its marketing literature, "an industry standard footprint and electrical drive." Yves LeMaitre, LightConnect's VP of marketing, makes no bones about what those words really mean. An unidentified system vendor had asked LightConnect to make a module with the same size and interfaces as one from DiCon Fiberoptics Inc., so that it would have two sources of supply.

LeMaitre sees this as a first step towards a possible MSA and says he's planning to promote the idea with other system vendors and competitors -- not just for VOAs but for other passive components as well. He says standards would help component manufacturers because they currently must contend with the problem of every system vendor having different requirements for subsystems. Standards would also insulate component manufacturers from their customers that run into trouble.

Getting everybody to agree on standards isn't easy, however. It's interesting to note that at least one big player in AWGs -- JDS Uniphase Corp. (Nasdaq: JDSU; Toronto: JDU) -- hasn't signed up to the MSA announced by Alcatel Optronics (Nasdaq: ALAO; Paris: CGO.PA), Hitachi Ltd. (NYSE: HIT; Paris: PHA), and NTT Electronics Corp. (NEL).

A second case in point cropped up during a panel discussion about tunable lasers at the Lightspeed Europe conference. It turned out that two efforts to standardize tunable lasers are incompatible. One is an MSA from Alcatel Optronics, Agility Communications Inc., and Bookham Technology plc (Nasdaq: BKHM; London: BHM) (see Tunables Get an MSA). The other is an implementation agreement (IA) from the Optical Internetworking Forum (OIF) (see OIF Sets Component Specs).

An IA is similar in aim to an MSA but doesn't specify any performance parameters. This one is likely to spawn its own MSA in a short space of time, according to Mike Hamilton-Smith from OIF member company Iolon Inc.

What this means is that competing standards could develop, at a time when tunable laser vendors would be better off presenting a united front in order to boost the chances of their technology being accepted in the marketplace. In time, market forces will likely eliminate one of the MSAs, but considerable time and effort will have been wasted by the vendors that backed the wrong horse.

Iolon says it backed the standardization efforts at the OIF because the OIF group of companies includes chip vendors, who supply circuits to the laser companies, and systems vendors as potential customers, who can all provide input to the MSA. Oddly enough, James Regan, Agility's managing director for Europe, says Agility chose to pursue the MSA outside of the OIF for precisely the same reason -- having too many cooks makes it difficult to come to decisions quickly, he contends.

It's also worth pointing out that an earlier effort by Agility and others to develop a tunable laser MSA has come to nought -- more evidence that talking about standards is one thing and getting them accepted is another (see Laser Suppliers Getting in Tune).

— Peter Heywood, Founding Editor, and Pauline Rigby, Senior Editor, Light Reading
FiberGuy 12/4/2012 | 9:14:03 PM
re: Components Standards: Key to Survival I think it is interesting that Lightconnect are calling this acheivement an MSA. For an MSA to be true, isn't it where vendors agree on a footprint to include all parties to customers... not when a customer wants you to copy a design?
Xiang_Qi 12/4/2012 | 9:14:03 PM
re: Components Standards: Key to Survival Technically, this is not the first MSA for passives, if you consider EDFA as a passive device.

An MSA has little value in a market where products are customized. The optical components/modules market is changing too rapidly to take advantage of MSAs. In DMUX case, this MSA will become meaningless when someone comes out with smaller package and athermal (no heater). Real buyers already know that there are better options for DMUX than AWG.

Peter Heywood 12/4/2012 | 9:14:00 PM
re: Components Standards: Key to Survival The copying is only skin deep. The VOAs from Dicon and LightConnect might look the same from the outside but they probably use totally different technology inside. As a result, they might have totally different performance characteristics on such issues as losses, and maybe cost.

Peter Heywood 12/4/2012 | 9:13:57 PM
re: Components Standards: Key to Survival I take your point about advances in technology possibly rendering MSAs obsolete pretty quickly.

It would be interesting to hear from system vendors on this one.

It must be tough to choose between proven technology from multiple suppliers, and bleeding edge technology from a single supplier - particularly at the current time.
FiberGuy 12/4/2012 | 9:13:56 PM
re: Components Standards: Key to Survival True, but then why is being asked to utilize another companies form factor an MSA? I guess I miss the point of what it means to have an MSA.

Both technologies are very different. Lightconnect uses a diffractive MEMs chip (think like two-slit experiment in basic physics with the ability to vary the slit width -- very cool idea) and Dicon a MEMS mirror. Performance is different (says both companies webpages -- see specs). As for cost, I really doubt either has the advantage with the chip (silcon is silcon).
whyiswhy 12/4/2012 | 9:13:55 PM
re: Components Standards: Key to Survival Anyone in this industry stoooooopid enough to agree to form / conform to MSAs deserves their fate: sure and swift death.

MSAs are there to allow the customers to force competition along one avenue, and one avenue only: lowest price.

Like AMD and Intel have an MSA on the Pentium? Too smart by twice!

BobbyMax 12/4/2012 | 9:13:48 PM
re: Components Standards: Key to Survival Any standards work has to backed up by National and international bodies. A bunch of companies getting together and coming out with a solution is simply cartel approach.
silenceofthelambdas 12/4/2012 | 9:13:48 PM
re: Components Standards: Key to Survival Like other concepts that have been hyped in the past, the mere mention of the acronym GǣMSAGǥ can cause industry veterans to jump into entrenched positions and ready themselves for battle. Before joining the fight, it helps to review some of the fundamentals, and compare the GstandardG vs. GcustomG approaches:
1) Regardless of how it is decorated by PR-types, a Multi-Source Agreement is just a declaration by several vendors that their components that perform a particular function will have a GstandardG mechanical, electrical and/or optical interface. From my experience GstandardG does not mean identical, it means similar enough that a board design can be made to accommodate various MSA components without major changes. For the vendors, an MSA makes sense if it results in revenues.
2) As stated in the article, an MSA protects the vendors because they do not have to change their interface for every customerGs circuit board (or module, or system). The vendorGs inventory management is made more simple than if it offers a component line with different interfaces for each customer. In addition, the design is not forced to change as customers emerge (and disappear), which for long-cycle-time components is clearly advantageous. Also, some customers require second-sourcing for critical components - MSA inherently provides this, whereas GcustomG does not.
3) An MSA protects the customers because they do not have to have a vendor-dependent custom product design. For a customer the MSA ideally makes the component look like a vendor-independent Gblack boxG. This significantly reduces product life-cycle cost, as a change to the board or system design is not forced when there are incremental changes to the component (i.e. performance improvements, bug fixes), or changes to the supplier contract, both of which are common in telecom. It is costly in material, manpower, logistics, customer support, repairs, you-name-it, to have to change a productGs optics, hardware, software, etc. when a custom-component disappears. ThatGs partly why many customers require second-sourcing for components, which MSA inherently addresses. Finally, if youGre lucky (as I was recently), MSA interfaces can also allow the addition of new component functions into existing products G talk about fast time-to-market!
4) MSA interfaces are notoriously difficult to get Gright enoughG to be useful. They are notorious for incurring delays as vendors jockey for position and influence. They can fizzle out because in the time it takes to do the crystal-ball-gazing, coordination and formalized agreement, a competitor gets proprietary technology out earlier and seizes the design wins and market share. You canGt blame vendors who get burned by MSA-lag to never want to contemplate one again. As far as time-to-market goes, GcustomG usually wins.
5) I repeat: IGve never seen an MSA interface being physically, electrically and/or optically identical for all vendors. Electrically there are usually GreservedG pins that allow vendors to support their own value-added features. The devil is (as usual) in the details - variations between vendors must be designed for, to avoid malfunction upon part substitution. With some work up-front, MSA gives a smart and lucky designer the ability to future-proof the design.

Considering the above, and reflecting on experience with MSA-based and custom parts, IGd like to address several comments posted earlier:
Post#1: As described above, for similar functions offered by competing manufacturers, an MSA can bring value to vendors and customers. Speed of improvement does not preclude this - in other areas of rapid technology evolution (e.g. microprocessor buses, high-speed drivers, etc.) standardization has generated enormous business volume for the vendors because it makes the technology easier to use and extends its life-cycle. Vendors who can fit their advances into standardized footprints (often smaller ones) win both ways. There are always better options. To be practical, youGve got to sell and maintain them at some point G standardized parts make this much easier than custom ones that appear then disappear.
Posts#2&5: Either a collaborative effort to define a footprint or copying one vendorGs footprint will achieve the goal of a multi-source agreement, by definition.
Post#3: Agreed, whatGs inside the black-box can be radically different, provided the differences do not require major interface changes that cannot be addressed with reserved pins.
Post#4: Yup, obsolescence is a concern, but it is no worse than for custom parts, which historically have shorter life-cycles and are abandoned with greater frequency. If it makes sense to jettison an old part, it makes no difference whether it was standard or custom; it is gone. If youGre reeaally lucky an advance in technology will fit within the old form factor and MSA footprint (hey it happened once).
As far as choosing proven vs. bleeding-edge technology, I canGt get bleeding-edge stuff qualified and into production in the short-term, so low-risk demands or forecasts get addressed with lower-risk parts, preferably GstandardizedG ones. With what meager resources I have to develop future products, I want bleeding-edge parts to evaluate so that I can pick what will give my business a competitive advantage in the years to come.
Post#6: One avenue - lowest price? Price is only one criteria for selecting a component. I would expect any company to try to get its components for the lowest practical cost, whether standardized or custom. GPractical costG means the amount that makes it most profitable for me to sell my product, while profitable enough for the vendor so that my supply is secure. ItGs true that it harder to bargain the price down on a custom component. But it also is much less likely that IGll use that part because of the supply-related risks and costs. A standard part (eg. MSA) makes it easier for me to bargain for lower cost, AND much more likely that IGll design-in the part. Pick your poison. As hard as it is to give me those discounts, at least youGve got my business. If youGre smart enough to negotiate the right price, we both win.
Post#7: It is much too simplistic to state that any standardization of technology must be regulated. If it is in an area of broad application or strategic import, the regulatory bodies can (and often do) take control and the process becomes formal, consultative, lengthy and controlled. However, there is no need to force every component pin-assignment to be defined by a regulatory body. A Gǣmulti-source agreementGǥ can be Gǣa bunch of companies getting together and coming out with a solutionGǥ. It is done for commercial reasons, with potential benefits for vendors and customers. If they do this within their legal rights, thatGs just good business.
st0 12/4/2012 | 9:13:43 PM
re: Components Standards: Key to Survival "3) An MSA protects the customers because they do not have to have a vendor-dependent custom product design."
well, MSA without performance std is difficult at least to swap at system level. Nowadays, the link budget got very little room (consider speed, ber, jitter, etc.etc.).

It is good to have common foot print. However, the std in the past is drive by large company which can dominate the market, and subsequently, provide the stability of the market due to the financial stability. MSA does provide a foot print stability, not performance, less market stability (size does matter). As for financial stability of the product, it remain to be determined (short term, it appear to be a buss word today...it may enhance the financial stability for the moment... as for long run, I am not so sure.... performance may still be a bigger factor than foot print).

my 2 cents.

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