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
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