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Vendors Aim to Cut Costs in Core

Light Reading
Supercomm News Analysis
Light Reading
5/21/2002

Two announcements today typify a trend by equipment vendors to integrate DWDM and optical switching in carrier transport networks. The news raises questions about the distinctions among products and whether the time is right for any of them.

Innovance Networks unveiled its first products this morning, dubbed AgileCore. These include a photonic switch and accompanying gear the startup claims will enable carriers to cut 70 percent of their current capital and operating costs (see Innovance Gets Agile).

Also today, NEC Corp. (Nasdaq: NIPNY) and Tellium Inc. (Nasdaq: TELM) jointly announced they are combining their technologies for a new transport product with similar claims to savings (see NEC and Tellium Offer Switch).

Both products will be shown at the upcoming Supercomm 2002 trade show.

Both announcements are focused on how carriers can most efficiently add optical bandwidth to their networks. That involves two key issues: First is how best to combine the functions of optical switching with DWDM. The second issue has to do with the old bugaboo of electrical-to-optical conversion. Let's take a closer look.

  • Switching plus DWDM: Traditionally, switching and DWDM have existed in separate boxes, with the notable exception of Corvis Corp. (Nasdaq: CORV). Even in Corvis networks (until recently, anyway), amplifiers and transponders had to be set up step by step to enable specific wavelengths from the core of the network to be correctly assigned to edge gear.
  • Optical-to-electrical conversions: Reducing the number of these conversions in networks results in big savings in capex and opex. However, eliminating all of the electrical conversions isn't easy (and sometimes isn't desirable). It involves using switches with optical cores and eliminating electrical conversions between the switches and DWDM systems (see All-Optical Switching Tutorial, Part 1, page 3).

A range of established players and startups have applied different combinations of solutions to these problems (see A New Optical Taxonomy, pages 4, 5, and 6). Now, Innovance and NEC/Tellium have their own takes, to which they've added additional value propositions. Let's check each one out:

Innovance

Innovance has opted for a solution that pairs all-optical core switching with DWDM gateways equipped with tunable lasers, which are linked directly to edge switches and routers. Wavelength colors are assigned in real time by a network operating system that automatically chooses the best path through the network, based on capacity requests made by a net management system.

Innovance says this approach eliminates costs associated with signal conversion and regeneration, the bulk of which the startup says take place when the core is electrical.

It's the same proposition made by Corvis and others, but Innovance claims to be more automated than Corvis in its approach to assigning wavelengths to specific edge devices.

Corvis, for its part, says Innovance is dead wrong. A unified control plane, announced in March and available now, provides automated planning and provisioning, Corvis says. Tunable laser capabilities are set to be added next month.

Corvis also notes that Innovance can't provide any grooming of STS1 links in Sonet networks. Corvis has its own grooming switch that works under the same control software as its core switch (see Corvis Goes Electric). Innovance, in contrast, says it's strictly a core transport buy, and grooming is a job for the devices at the edge that get the benefit of the core capacity.

NEC/Tellium

It's no surprise that these two companies have finally gotten together. Light Reading picked up on the pairing earlier this year (see Are Tellium and NEC up to Something?). Now, the two say they've put a Tellium switch transceiver in one box alongside a DWDM transponder from NEC in order to create a transport switch with integral DWDM.

This approach combines optical switching and DWDM and eliminates the optical-to-electrical conversions between the two systems. But there's still an electrical core in Tellium's switch.

Many questions arise from the NEC/Tellium announcement. It's not clear, for instance, whether or not the NEC/Tellium box will feature grooming, which could provide at least one advantage over competitors such as Innovance. Right now, Tellium's box doesn't do sub-wavelength grooming.

Neither NEC nor Tellium returned calls today.

Both Innovance and NEC/Tellium face an even larger question: Isn't this a bad time to release such equipment -- when all leading carriers have stated their determination not to touch core hardware for at least another year?

Yes and no. Both are banking on the idea that carriers will need to extend their optical transport capacity within the foreseeable future.

Innovance, for instance, has geared its products to helping big carriers with their plans for 2003 -- when the startup says it hopes to gain "first mover advantage" among carriers that will be starting to upgrade core transport again, thanks to growing IP service requirements.

Innovance is already bidding on big-time long-haul RFPs (requests for proposal) with carriers such as AT&T Corp. (NYSE: T), Qwest Communications International Inc. (NYSE: Q), Sprint Corp. (NYSE: FON), and WorldCom Inc. (Nasdaq: WCOM). And word on the street is they're likely to be shortlisted, along with Corvis, for at least one contract within the next couple of months.

Other issues will also determine the fate of the products announced today. Innovance is still a startup, despite substantial backing and 310 employees (see Innovance Scores $55M). And questions are always raised about the ability of startups to influence big partners (see Qwest Blows Hot and Cold on Startups). Tellium has been around longer, and NEC is an established player with plenty of infrastructure to support any new products.

Another influence could be the availability of 40-Gbit/s interfaces on these new products, since the larger capacity could provide an incentive for carriers interested in future-proofing their core devices. NEC and Tellium don't mention 40-Gbit/s in their announcement. And Innovance says it won't be available on its products until sometime next year. Corvis says it will have 40-Gbit/s capabilities in the first part of 2003.

— Mary Jander, Senior Editor, Light Reading
http://www.lightreading.comFor more information on Supercomm 2002, please visit: Supercomm Special
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skeptic
skeptic
12/4/2012 | 10:21:27 PM
re: Vendors Aim to Cut Costs in Core

I keep wondering why light reading keeps
promoting innovace? At the same time they
are writing pure negative reports about the
entire IP routing space, in effect calling the
market dead, positive articles keep appearing
about a type of product that is far more
dead than edge or core routers.

There is a such a glut of fiber and wavelengths,
that transport gear is about the last place in
the world any sane person would look for a
viable market or startup opportunities.

Finally, innovace has way too many employees
for the stage they are at (310) and $55 million
isn't that "substaintial" an amount of backing.
Especially with the sort of burn rate they
probably have.




lightshow
lightshow
12/4/2012 | 10:21:27 PM
re: Vendors Aim to Cut Costs in Core
So what do you figure their burn rate it?
self
self
12/4/2012 | 10:21:26 PM
re: Vendors Aim to Cut Costs in Core
What are they using? Something small and home made like Corvis? Or, something bigger?
dave77777
dave77777
12/4/2012 | 10:21:20 PM
re: Vendors Aim to Cut Costs in Core
Any field trials? If not, I give them six months, bought out or bankrupt. CORV burns about $55m/qtr, plus they've already deployed this stuff.
gea
gea
12/4/2012 | 10:21:16 PM
re: Vendors Aim to Cut Costs in Core
As for the Tellium/NEC deal, I didn' think it represented anything particularly significant from reading the press release and this article. Isn't it just putting NECs' wavelengths on the interfaces of the Tellium box?

On the other hand, that's an absolute necessity for Tellium, who at the beginning actually made WDM gear themselves. As long as they had that extra and unnecessary transponder between them and the optical multiplexer, there were at a big competitive disadvantage with respect to Cien, Corivs, or any other vendor with a complete solution. (And they've already worked pretty hard to prove that they're not just a giant, expensive patch-panel.)

As for Innovance, sounds like they had a solution (tunable lasers) and went looking for the problem (long haul). BUT, from what I could tell of Corvis, the Corvis solution required a lot of preplanning and assumed a very static network. Depending on what Innovance actually has, it might bite ito Corvis' pie. Unfortunately, I on't think that pie is going to be big enough fast enough to matter for Innovance. Meanwhile, Corvis has a big pile of cash to sit out the market.
clear brain
clear brain
12/4/2012 | 10:21:09 PM
re: Vendors Aim to Cut Costs in Core
It is well recognized for a few years integrated solutions (DWDM and switching) is not only a technology drive, it is also a desparate call from carriers for cost reduction, i.e., OEO reduction. In the early days, the concept of transponders was a stop-gap solution (all technologies are one time or another) to cope with interoperability. As time goes on, and as innovation proceeds, integration and reducing the transponder # is the only sensible thing to do.

As for Innovance, it sounds good that they have this AgileCore. The product is feature poor and not able to uphold the field trial rigor and was shown the exit door. The debate about "more" or less automated than their competitors is completely moot.

As for Corvis, the claim of adding tunable laser capabilities is interesting. Tunable laser is not the innovation in itself. It is the application in network architectures that makes the difference in integration. The network that takes full advantages of tunable lasers has to start from ground up. I wonder how Corvis can add the tunable laser capabilites into their network overnight. This is where Light Reading should be finding out if they are capable of understanding the nuances.
thekidx
thekidx
12/4/2012 | 10:21:05 PM
re: Vendors Aim to Cut Costs in Core
Quote:

As for Innovance, it sounds good that they have this AgileCore. The product is feature poor and not able to uphold the field trial rigor and was shown the exit door. The debate about "more" or less automated than their competitors is completely moot.

Unquote


Where did you get all that from? What field trial were they shown the door, and who wasn't?

Have you got product release details that show they aren't feature rich?
thekidx
thekidx
12/4/2012 | 10:21:05 PM
re: Vendors Aim to Cut Costs in Core
$55M was the second round of funding after both seed and a much larger first round.
whitewater
whitewater
12/4/2012 | 10:21:01 PM
re: Vendors Aim to Cut Costs in Core
So how much of the large first round is left? The company was launched in May 2000 and has been carrying over 300 employees for at least a year. Their burn rate must be considerable.

thekidx also wrote:
"What field trial were they shown the door, and who wasn't? Have you got product release details that show they aren't feature rich?"

I'm curious to know if anyone can provide insight to these questions. There have been a few rumors floating around (mostly relating to tech trials with Qwest).

Disclaimer- I am not/never was employed by Innovance or Corvis. I am mearly a curious by-stander.
zweisel
zweisel
12/4/2012 | 10:20:15 PM
re: Vendors Aim to Cut Costs in Core
quote - "Depending on what Innovance actually has, it might bite ito Corvis' pie."

... more like a Twinkie than pie ...
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