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Optical/IP

Transmode Makes a Little Go a Long Way

Transmode Systems AB has secured a third round of funding in what execs call a final push to meet a growing market demand for CWDM (coarse Wavelength Division Multiplexing (WDM)).

Transmode, which shipped its first products in March 2001, has garnered US$8 million from two of its original investors, Amadeus Capital Partners and European Equity Partners (see Transmode Scores $8M). The round brings Transmode's total funding to about $15 million.

That may seem a relatively small amount, but in Transmode's case, a little seems to go a long way. The company claims sales are up "just over 100 percent" since last year, and it has six customers -- two in the U.S., one in the U.K., and three in Scandinavia.

Moreover, Transmode is set to improve its products to tap what it sees as the widening spigot for CWDM. "This fully funds our business plan," says CEO Isaac Olasoko, who joined Transmode last April after serving in a number of management positions at Alcatel SA (NYSE: ALA; Paris: CGEP:PA) (see Transmode Appoints CEO).

Olasoko says the round will go to upgrading the reach of the company's CWDM channels, using a technique Transmode demonstrated with amplifier maker Genoa Corp. in a U.K. field trial earlier this year (see CWDM On the Move and Transmode, Vtesse Trial CWDM). In that demo, Transmode amplified four CWDM channels of gigabit Ethernet over 125 km of fiber (about 40 percent longer than present CWDM gear).

The improvement strengthens the pitch for Transmode, whose gear allows Sonet (Synchronous Optical NETwork) and SDH (Synchronous Digital Hierarchy) transmissions in metro networks to ride over CWDM in ring configurations. The support of rings, along with the box's ability to deal with distance impediments, are unique, the vendor claims. According to Transmode, most other DWDM gear costs more and doesn't support CWDM rings.

Olasoko says the upgrade levels the playing field between CWDM and DWDM. "The old barriers are eliminated," he argues, because Transmode's technique removes the distance limitation of 50 km.

Transmode has marketing arrangements, he says, with OFS and Corning Inc. (NYSE: GLW), through which Transmode aims to sell its gear to customers buying those vendors' newer metro fibers, which are designed to reduce attenuation and work better with CWDM equipment.

Transmode concedes that it needs help in promoting CWDM. Not everyone agrees with the startup's view of the technology's benefits. Olasoko acknowledges that vendors of metro platforms based on DWDM (dense WDM), for instance, are digging in their heels: "They have some resistance, yes, they're trying to protect their DWDM products." But he believes that, as the old limits of CWDM are removed, their position will be harder to maintain.

Other arguments against CWDM may be tougher to counter. "My problem with CWDM has always been that it appears to prove in for smaller metro rings, but can actually add cost to a network that also requires regional DWDM rings," writes Scott Clavenna, president of PointEast Research LLC and director of research at Light Reading in an email.

Because the CWDM wavelengths can't be passed through to the DWDM grid, carriers often wind up managing two different types of WDM systems in the same metro, Clavenna says. The solution, he thinks, may come as suppliers find a way to offer "low-cost ITU grid DWDM in the access and regional metro networks." He says DWDM lasers and optics are falling in price, which may herald new products.

Another argument against CWDM is that it can't scale to handle large numbers of wavelengths, so it's not as "future-proof" as DWDM. This argument is used by Lumentis AB, which claims that it has ways of driving down DWDM costs to those of CWDM (see Lumentis Bursts Into 3G).

(For more on issues surrounding DWDM and CWDM deployment, see Light Reading's recent report: Metro DWDM.)

But Transmode's undeterred. Olasoko says the proof is in the pudding: CWDM deployments are on the increase. One of Transmode's component suppliers, Tsunami Optics, is making money despite the current industry downturn, indicating growing demand, he says. And Transmode itself is continuing to grow. Olasoko's hoping to bring the company's tiny roster of staff from 35 to 45, many of whom will be sales folk.

Transmode also has its own challenges. Its customer roster so far remains fairly anonymous. Despite announcements of wins with Stealth Communications Inc. in the U.S. (see Swedes Cut Metro WDM Costs), the U.K.'s Vtesse Networks (see Transmode, Vtesse Trial CWDM), and GothNet AB in Sweden, there's little sign of traction with incumbent carriers. Clearly, it remains to be seen whether Transmode's latest funding can help enhance its position -- or that of the market for which it's set its cap.

— Mary Jander, Senior Editor, Light Reading
www.lightreading.com Want to know more? The big cheeses of the optical networking industry will be discussing metro DWDM at Lightspeed Europe. Check it out at Lightspeed Europe 02.

gea 12/4/2012 | 9:34:30 PM
re: Transmode Makes a Little Go a Long Way "My problem with CWDM has always been that it appears to prove in for smaller metro rings, but can actually add cost to a network that also requires regional DWDM rings,"

This is a limitation to be sure, but look at the distance unamplified CWDM offers: probably 80Km in the small form factor. 80 km!!! This wondrous town of New York City is only 35 miles at its largest diameter. So 80 km (or possibly even more) will be more than enough for the vast majority of metro and enterprise applications.



"Another argument against CWDM is that it can't scale to handle large numbers of wavelengths, so it's not as "future-proof" as DWDM."

Yes and no...two (or perhaps 3 at the most) of the CWDM channels sit in the EDFA gain band. When scalability to DWDM channel-counts is needed, DWDM channels can be inlaid in that 1530->1565nm slot, leaving the other CWDM channels operating.

Add these facts to the plug-and-play nature of CWDM (ie, no transponders in many cases), to the short-term returns window carriers are operating with now, CWDM for Enterprise/Metro seems a nobrainer, sure to proliferate rapidly once it gets going.
opticalexpert 12/4/2012 | 9:34:26 PM
re: Transmode Makes a Little Go a Long Way It seems to me the only advantage of CWDM is that it is cheap uncooled DFB laser. Since the DFB wavelength can be tuned by temperature, I wonder how much higher the CWDM DFB laser yield could be compared to that of the 400 GHz spaced DWDM DFB in the long run?
FastSwitching 12/4/2012 | 9:34:19 PM
re: Transmode Makes a Little Go a Long Way Why does a startup with so many customers need another round of funding? Are the customers paying with stock options?
BobbyMax 12/4/2012 | 9:33:40 PM
re: Transmode Makes a Little Go a Long Way CWDM has not been is still not has been adated very widely,. It is an inexpensive technoly. The disappointing thing is that the vendors are not followin the international standards prescribed by ITU-T.

The market for CWDM is not huge. The market for CWDM will be close to $1.5 Billion by the year 2005.
AAL5 12/4/2012 | 9:33:39 PM
re: Transmode Makes a Little Go a Long Way
Bobbymax: "CWDM has not been is still not has been adated very widely",

and you suggest to others they should attend community college?

LOL,

AAL5
gea 12/4/2012 | 9:33:36 PM
re: Transmode Makes a Little Go a Long Way "It seems to me the only advantage of CWDM is that it is cheap uncooled DFB laser."

Well, that's true, but tha's kind of like saying that the only advantage of using a pencil is that you can write stuff!

Well, not really. But uncooled lasers means you can build on the current SFP and other transceiver MSAs, and indeed this is what is happening. This means you (actually, the customer/service provider/LAN guy)can take an old router/switch that uses SFPs, and then simply slide in the CWDM transceivers. You won't need a transponder, merely pasive optics.

In addition, because CWDM as evolved kind of slowly, and from the transceiver world out, the 8 channel CWDM wavelength standard is fully agreed upon, assuring a decent amount of interoperability (which is much easier too because there won't be amplifiers). Thus all o the passive components out there support the same channel plan.

It wopuld seem, then, that CWDM will come in on the heals of cheap GBIC/SFP technologies, and follow those same cost curves.
gea 12/4/2012 | 9:33:34 PM
re: Transmode Makes a Little Go a Long Way "Therefore the 80 km 'marketing' number is really not all that valuable when judging the capability of a product."

Of course the actual thing boils down to your link budget. But the point is that a nominal distance (ie, without mux/demux losses and ideal fiber) of 80km has a very high probability of being plenty for the vast majority of enterprize and metro WDM applications. It was only marketing specsmanship that caused a lot of Metro vendors to worry about banging their product into what's closer to being a regional application.

And when one considers the possibility of transponderless, interoperable architectures, and where the carrier can actually purchase their own transceivers off-the-shelf as they see fit, well now we're really taking the whole GBIC revolution a couple of steps further.
USA 12/4/2012 | 9:33:34 PM
re: Transmode Makes a Little Go a Long Way Let's be honest, 80km is a marketing number and doesn't necessarily mean anything for a particular implementation. The key factor is the link power budget and how that is affected by additional wavelengths lit up on the fiber. If you have great SMF28 fiber with little loss due to connectors, splices, bends, etc, then you can expect a loss of .25 db/km or with a 20 dbm link budget, you can go 80 km (in your lab).

In the real world, the optical architecture is key because some in some vendor implementations, the more wavelengths you light up, the less power you have per span and the total distance between nodes as well as total length of the ring is reduced.

If the architecture is to OEO every wavelength at every node, then you have a constant span length and can more accurately judge what the customer will experience.

Therefore the 80 km 'marketing' number is really not all that valuable when judging the capability of a product.
MrLight 12/4/2012 | 9:33:32 PM
re: Transmode Makes a Little Go a Long Way gea, you have made some good points which I would like to add to.

Firstly, when CWDM was first being considered in the late 90s for Metro the idea was to benefit from the wider linewidths as opticalexpert stated in post 2, that permitted the use of "cheap uncooled DFB laser[s]" , that and to permit the use of a PIN versus an APD detector, and the use of a single stage 20nm wide add/drop filter versus the two stage band and channel combination used for DWDM. These changes in the optical component requirements alone were sufficient to make a business case for CWDM.

Further cost saving would be achieved with less expensive wider line width long-wavelength 0dBm VSCELs as they became available (still waiting for a volume vendor), and standardization efforts such as a CWDM GBIC MSA for the CWDM NEs.

Therefore, the optical link budget for Metro CWDM was to be less than 50km versus the Metro DWDM pt-pt dispersion limited reach of 120 to 200 km @2.5Gb/s to permit the use of less expensive components and not becasue the CWDM couldn't go 80km. It could, and it would be asked to for special installs, but with slightly more expensive components.

Secondly CWDM was envisioned for:

1.CWDM collector ring hubbing to a DWDM NE sitting on a larger circumference ring.
2.CWDM pt-to-pt or linear connection to a DWDM NE sitting on a larger circumference ring.
3.CWDM 30km(with 50km optics) to 50km (with 80km optics once they became as cheap as the 50km) circumference campus (meshed traffic) and storage rings (hubbed traffic)of up to 4 sites, with up to 2 CWDM wavelengths at a site.

The 30km to 50km in Point 3 came about because there was a passthrough loss of 1.5 to 2 dB per site depending on the filter technology, so a CWDM wavelength traversing three intermediate sites could see 6dB, which would take 20 to 25km off its reach.

Thirdly, due to protocol timing the reach of some of the storage protocols is limited to approximately 40km for ESCON and approximately 70km for FICON. You can play around with them to extend the reach but it is easier to keep it simple and keep your distances below 50 or 80 km.

Finally the idea of CWDM enabling the transponderless CWDM passive ring was debated, but was considered viable only if the subtending equipment with the CWDM GBIC was from the same vendor as the passive CWDM on/off ramp, since there needed to be close coupling of the two elements for performance monitoring and protection for add-moves-changes, and that they be co-located otherwise the circumference of the ring would be reduced by the distance between the two.

Note: Ericsson's DWDM ERION equipment is tranponderless on the drop side, exploiting the fact detectors are wide-band.

It will be interesting to see if Transponderless CWDM takes off or other things will eclipse Metro CWDM and DWDM before that happens.

By the way, one concern that I always had was that the lack of CWDM tunablity for simplifying the add-moves-changes would slow down the CWDM deployment. Only time will tell.

MrLight :)
gea 12/4/2012 | 9:33:29 PM
re: Transmode Makes a Little Go a Long Way Damn Mr Light! I rarely see posts that well informed on LR.

As for...
"It will be interesting to see if Transponderless CWDM takes off or other things will eclipse Metro CWDM and DWDM before that happens."

I have started to believe that we'll see very cheap, transponderless CWDM as basically an "upgrade" to enterprise/Metro Ethernet connectivity. For instance, if a large company is running a GbE LAN acros town and wants a cheap upgrade, I can see LAN guys in the near future just plugging in CWDM GBICs/SFPs into their router or switch, and then perhaps even just buying the passive optics themselves. This might be a preferred method for a time until 10GbE really ges going (in addition to letting them run diferent kinds of traffic if they want).

In other words, CWDM may ride into the Metro on the back of Ethernet, and obey the lockstepped cost curves. If that happens, we may end up seeing CWDM interfaces show up in Circuit City or Radio Shack!
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