Siemens Shifts Switch Strategy

HANOVER, Germany -- CeBIT -- Siemens AG (NYSE: SI; Frankfurt: SIE) has scrapped plans for a standalone all-optical switch and is developing equipment that integrates DWDM (dense wavelength-division multiplexing) with optical switching instead.

The new equipment, which will ship early next year, will target metro networks initially and incorporate 40-gig transmission technology, according to Stephan Neidlinger, vice president of sales for Germany and Austria for Siemens Information and Communications Networks Inc.

"We think that standalone pure optical switches are dead, period," Neidlinger told Light Reading at the CeBIT trade show today.

After studying the economics of optical backbones carrying large numbers of wavelengths, Siemens reached the conclusion that transponders will represent a large and growing proportion of overall network costs as DWDM is deployed, and the only way of bringing down the numbers of transponders is to integrate optical switching with DWDM systems. This has the added benefit of simplifying switches, because they then need only deal with add/drop traffic, Neidlinger notes.

This is exactly what Corvis Corp. (Nasdaq: CORV) has been saying all along. And Neidlinger freely admits that Siemens is now pursuing the same strategy as Corvis.

It's possible that Nortel Networks Corp. (NYSE/Toronto: NT) has done the same sums and reached the same conclusions, in view of its recent decision to halt development of the standalone all-optical switch that it acquired from Xros (see Nortel Shuts Optical Switch Effort).

Siemens has stopped developing its TransXpress Optical Service Node (OSN), which it first unveiled at CeBIT two years ago (see Siemens Launches Optical Cross Connect “Solution”). The switch was based on 2D MEMS (micro-electro-mechanical system) modules from OMM Inc., which Siemens, together with Alcatel SA (NYSE: ALA; Paris: CGEP:PA), invested in.

The new box that Siemens is developing is called the MSI-160. The "MSI" stands for multiservice integrator, and the 160 is the capacity in gigabits per second. It will integrate DWDM and optical crossconnect functions, which will still be furnished using OMM's optical switching subsystems (see Siemens Integrates OMM's MEMS).

The MSI-160 will boast a variety of blades for handling different types of traffic. This will includes Siemens' existing blades for funneling 10baseT, 100baseT, and Gigabit Ethernet into SDH channels, which are already selling like hot cakes, according to Neidlinger. "It's a huge trend right now. Everybody wants to have Ethernet integrated into SDH."

Siemens will also include a resilient packet ring (RPR) blade, which will enable service providers to smooth out bursts in data traffic that they aggregate so that it can be carried more efficiently.

Perhaps most remarkably, Neidlinger says that the MSI-160 will boast 40-Gbit/s line speeds when it ships early next year. "It's going to be one of the first 40-gig boxes in the networking market."

"We see the need for 40 gig," adds Neidlinger. "We're already shipping a lot of 10 gig, especially to city operators." This jibes with reports of carriers in the U.S. pushing for 40-gig line rates (see The Shorter Roads to 40G).

Right now, each of these claims needs to be taken with a pinch of salt. We'll have to wait until next year's CeBIT to discover whether Siemens is underestimating the challenges of integrating existing DWDM and switching systems with different control planes.

— Peter Heywood, Founding Editor, Light Reading
http://www.lightreading.com For more information on CeBIT, please visit: www.lightreading.com/cebit

SolarSailor 12/4/2012 | 10:47:08 PM
re: Siemens Shifts Switch Strategy > This is exactly what Corvis Corp. (Nasdaq:
> CORV - message board) has been saying
> all along.

Corvis?? I think you meant the likes of Sycamore, Ciena, Tellium, etc, don't you?
Peter Heywood 12/4/2012 | 10:47:05 PM
re: Siemens Shifts Switch Strategy ...makes a good point that Siemens' initial focus is on metro while Corvis is targeting long haul.

Other comments on: http://www.lightreading.com/bo...

Peter Heywood 12/4/2012 | 10:47:05 PM
re: Siemens Shifts Switch Strategy No, I definitely don't mean Sycamore, Ciena, Tellium etc, all of which have switches with electrical cores.

This whole article is about switches with optical cores - ones that handle wavelengths without converting the light into electric signals. Apart from Corvis's CoreWave, other examples are Calient's Diamondwave and Lucent's LambdaRouter.

The point is that Corvis is different in that its switch is integrated with its DWDM gear and thus eliminates the transponders that would otherwise be necessary at the interface between one vendor's all-optical switch and another vendor's DWDM system. Cinta (RIP) had a similar scheme to Corvis.

I read Siemens' switch in strategy as an endorsement of the Corvis approach and bad news for the Calient Diamondwave and Lucent LambdaRouter
y2k 12/4/2012 | 10:47:00 PM
re: Siemens Shifts Switch Strategy Peter Heywood - "I read Siemens' switch in strategy as an endorsement of the Corvis approach and bad news for the Calient Diamondwave and Lucent LambdaRouter"

In general, it is bad news for anyone pursuing stand-alone all-optical switch. We will start to see more "integrated" or "hybrid" products.

The OOO switch is either integrated with DWDM transport or integrated with OEO switch with STS-1 grooming capability, or both.

It is all about eliminating expensive OC-192 transponders (i.e., eliminating unnecessary OEO conversion).

Integration with DWDM allows the carriers to save money by not terminating transit traffic in the core.

Integration with OEO allows the carriers to save money by not grooming metro traffic that is already at wavelength level.

With integrated or hybrid approach, the sweet spot for all-optical switch starts at 16x16 (OMM) to 64x64 (Agere) to 100x100 (???).

The carriers are deploying OEO switch in order to carry voice traffic more cost-effectively. They are not looking for OOO switches to replace OEO, only to complement them.

Nortel is finally listening to the carriers.

By shutting down Xros, Nortel has essentially turned off the light on any possible applications of stand-alone 1000x1000 (along with other startups who were trying to do a better Xros).

They are now pursuing a smaller port count OOO switch to integrate with their DWDM transport and their HDX. And they decided that it is cheaper to buy them than to make them.

It is time to listen to the carriers. They don't buy toys anymore, they buy tools.
edgecore 12/4/2012 | 10:46:55 PM
re: Siemens Shifts Switch Strategy Interesting, 40G in the Metro, Optical SW without transponders....

Guess I never paid much attention to them!

Would you consider Siemens a Tier 1 OEM?

Who are the tier ones?

Marconi (are they ?)


optical_leaders 12/4/2012 | 10:46:48 PM
re: Siemens Shifts Switch Strategy I agree with you that Siemens are going the same way as Corvis!

But I do not agree that this is bad news for Lucent and Calient. Reasons for this are:

1. Corvis DWDM+OXC integration is proprietary and hence their all optical switch will not integrate into other multi-vendor networks - if Siemens is the same then huge mistake for them as they have a small market share already.

2. Look how Corvis have done - their appraoch has not done very well and I do not expect many more people to buy into their DWDM + OXC vision.

The future is NG DWDM systems plus OADMs.
corvo 12/4/2012 | 10:46:34 PM
re: Siemens Shifts Switch Strategy sometimes it helps 2 look at things from a distance - from a new perspective. what has happened recently is nothing less than a mini confession season by the big players, lasting the past several months. what they are saying now is an indirect admission that they have made wrong choices in the past and - at least in the case of nt and siemens - they r willing 2 start afresh. in the end, it is little old corvis who proves 2 b right (i.e. integration of optical switch with wdm platform). yes, there is the problem with sliding revenues. but with the weather report as it is these days no one in the optical networking industry is having a smooth sailing.
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