Iolon Lands Lucent Deal
Under the deal, Lucent will incorporate Iolon's lasers in the next release of its LambdaXtreme DWDM platform, due out in October. And although the contract probably won't generate huge revenues for Iolon in the near term, Lucent's use of tunable lasers in its equipment is likely to influence general attitudes towards the technology.
"We view this as an industry-changing event," crows Saeid Aramideh, Iolon's VP of marketing.
Iolon's coup follows hard on the heels of a similar landmark announcement: Tunable lasers from Agility Communications Inc. will be incorporated in Lightscape Networks Ltd. metro gear that's already in widespread use in carrier networks (see Clouds Lift on Tunable Lasers).
It's worth pointing out that Fujitsu Network Communications Inc. (FNC) has already taken the big step of deciding to put tunable lasers in all its Flashwave DWDM systems. "We only ship DWDM systems with tunables in," claims Mike Susong, Fujitsu's director of industry relations. But there's a big difference between Fujitsu and Lucent's situations. Fujitsu's tunable lasers are developed internally, while Lucent has to source them from a third party.
The big question is, will this deal turn into a large number of device shipments for Iolon? The answer appears to be, alas, not yet. Lucent's LambdaXtreme isn't actually shipping in volume right now, although it is in trials. But, being a DWDM core transport platform, it isn't likely to ship in large quantities any time soon -- the long-haul transport market is as dead as the proverbial dodo.
On the other hand, some industry pundits maintain that the slump is only temporary, if a bit prolonged. And when recovery does come around, the LambdaXtreme is poised to become the leading DWDM platform -- according to Lucent, anyway.
Anand Krishna, director of product management for the LambdaXtreme, claims that it's the only available DWDM platform that supports OC768 (40 Gbit/s) line rates. It can carry up to 64 wavelengths at this rate, or 128 channels at OC192 (10 Gbit/s) -- serious capacity (for more details, see Lucent Lays on More Lambdas ).
Trials of the platform have been "very successful" so far, he claims, with half a dozen leading operators expressing keen interest (see Lucent: US Carrier to Test 40-Gbit/s). The only named customer is Deutsche Telekom AG (NYSE: DT).
Customers that have tested release one of the LambdaXtreme won't need to retest it in order to switch to tunables, he insists. Lucent says it has done extensive performance and reliability testing, which is almost complete.
Lucent's decided to back tunables all the way. From October, every LambdaXtreme shipped will be populated with tunable lasers, both as primary transmitters and as backups. The system will contain no fixed wavelength lasers at all. "Wherever there is an OEO [optical-electronic-optical] conversion point, Iolon's lasers will be deployed," Krishna says.
Lucent says it made the decision to go with tunable lasers because it made good economic sense. According to Krishna, using tunables will afford Lucent's customers savings of 75 to 80 percent on the cost of spares. Those savings will be significant even when the system, which has a maximum of 128 wavelengths, is only populated with 16 wavelengths, he claims. Instead of buying 128 (or 16) different "part codes" to hold as spares, the customer only needs to stock a few.
Of course, this argument only works if the cost of the tunable laser is not much greater than its fixed-wavelength alternative. Lucent appears to have negotiated a good deal with Iolon in this respect. According to Krishna, the price premium is in the single-digit percent. In other words, Iolon has priced its tunable laser at a premium of less than 10 percent above fixed wavelength devices.
This scotches criticism from some analysts, including Lisa Huff from Communications Industry Researchers Inc., that Iolon's approach of buying in parts and assembling them wouldn't allow it to bring prices down sufficiently. On the contrary, Iolon's approach may have secured the deal, as it enables the startup to turn orders around quickly.
Lucent is lining up a second source for tunable lasers, although it isn't at liberty to say which company this might be.
— Pauline Rigby, Senior Editor, Light Reading