Is Opthos Over the Top?

ATLANTA -- Supercomm 2001 -- Marketing hype at Supercomm 2001 was in full force this week. Opthos Inc., a new player claiming that it’s developed an all-optical DWDM transport system for the metropolitan area network, staged a mock strike outside the convention center Monday. The group of 10 or 12 picketers held signs and chanted as they walked back and forth demanding freedom from electronics in metro transport networks and the hope of a completely optical solution.

Depending on your viewpoint, the stunt was either an amusing way to create buzz at the show -- or just another annoying distraction. But after the marketing gimmick, what about the technology? On the surface, it looks interesting. The company claims its newly announced IW1000 can help service providers lower their operating expenses by creating a “true” all optical solution that upgrades easily and cheaply, consumes a fraction of the power of electrical systems, and provides more flexibility in network design.

It's been demonstrated at Supercomm this week in a simulated network with products from Gotham Networks, LuxN Inc., Metro-Optix Inc., and Foundry Networks Inc. (Nasdaq: FDRY).

“What we are doing is revolutionary,” says Robert Lundy, president, chief executive officer, and co-founder of Opthos. “Others claim that they are all optical, but they are imposters. You can hear the fans in them cooling the electronics; that’s not truly optical.”

Lundy says that transport systems from ONI Systems Inc. (Nasdaq: ONIS), Nortel Networks Corp. (NYSE/Toronto: NT), or Ciena Corp. (Nasdaq: CIEN) must convert traffic from optical signals back into electrical impulses. The IW1000 doesn’t do any conversion, instead transporting traffic optically, using out-of-band IP signaling to manage the light around the ring, says Joseph Parker, the company’s chief technology officer and co-founder.

The company says that its all-optical approach offers several benefits. For one, because it doesn’t need transponders to do the OEO conversion, it can carry any traffic at any speed. Parker claims that this is extremely important when it comes to upgrading the network.

“These other systems limit carriers to certain interfaces and speeds,” says Parker. “When they want to upgrade the network, it costs them about $2 million to swap out the electrical transponders and put new ones in. But with our solution, the cost of upgrading is zero.”

The company says that providers also save money because the IW1000 uses significantly less power than systems that convert traffic back into electrical signals. The IW1000, which takes up about a quarter of a seven-foot telco rack, only consumes 100 watts of electricity — the same wattage as a standard light bulb. Other systems from companies like Nortel, which can span three telco racks, consume up to 3.5 kilowatts of electricity. Why the stark difference? Electrical components can be bulky, and they require cooling; the more powerful the system, the hotter it gets, and more fans are needed to cool it.

The company says it can dynamically deliver wavelengths to any port of any node. Wavelengths can also be shared among multiple users and may be rearranged to accommodate changing traffic loads. This allows service providers to over-provision their networks and make more efficient use of their resources, says Parker.

But one issue to consider is that the IW1000 relies on the assumption that the access devices feeding it traffic have optical interfaces on their boxes to convert the traffic to waves on the ITU service grid. This idea doesn’t set well with some of Opthos’s competitors.

“You could have a transparent system like this if a single vendor controlled the access box and the DWDM system,” says Steve Chaddick, senior vice president and chief strategy officer for Ciena. “But to depend on router vendors to add this to their boxes? I don’t think it’s a good idea.”

Some access equipment providers say the ITU-compatible optical interfaces aren’t the problem. One routing company that didn’t want to be named says it is already considering offering ITU-compatible optical interfaces on its current products. But these companies point out other potential problems with the system’s concept.

“I don’t see how an all-optical solution could really be cost effective enough for the metro,” says a marketing executive from a routing company. “And if the economics aren’t right the product doesn’t make sense. It sounds like a solution in search of a problem.”

Opthos also had competitors making similar claims at the show. For example, Movaz Networks Inc. unveiled what it says is an all-optical metro wavelength switch (see Movaz Makes a Splash).

One thing the company has going for it is the expertise of its founders, Parker and Lundy. Parker was part of the original team that started ONI and was director of systems at Xtera Communications Inc., a startup focused on long-haul transport. Lundy was the president and CEO of Xtera. So far the company has raised about $15 million and is looking to raise more cash in a second round of funding.

- Marguerite Reardon, Senior Editor, Light Reading

For more information on Supercomm 2001, please visit the Light Reading Supercomm 2001 Site.

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KP 12/4/2012 | 8:17:16 PM
re: Is Opthos Over the Top? All optical concept does not work in core..
And Opthos is talking about all optical switch for metro..

I wish these guys all the very best..
aaaaaaptics 12/4/2012 | 8:17:13 PM
re: Is Opthos Over the Top? i take it you don't believe in CORV's all optical products. are you in the FO industry? if so, can you tell me why the concept doesn't work in the core? thanks in advance
quanta 12/4/2012 | 8:17:04 PM
re: Is Opthos Over the Top? Opthos had to get a bridge loan from its VC's in order to make it to this conference. If they don't line up customers, they're done.

The product is irrelevant. Unless providers are going to buy, which everyone knows they won't, this company is history.

A couple of the companies that this product was demonstrated with are in trouble as well.
elysium 12/4/2012 | 8:17:02 PM
re: Is Opthos Over the Top? ...the Movaz product unveiled at supercomm is FULL of transponders. All-optical? That's a joke. Their product is at least a 7 foot rack (or two racks) loaded with fans and lasers. Definitely full of OEO's. This is their "Ray" line of products. It is their only offering. And it is CLEARLY not all-optical.

Those are the facts, and they are undisputed. Ask Movaz.

(Their next generation "all optical" product is currently vapor. It'll be years away. Why? They're building their own 3D MEMS to get rid of muxing/demuxing. Say what? Who knows when that'll be completed. They probably don't know when it'll be completed either. Good luck.)

Dawg2001 12/4/2012 | 8:16:47 PM
re: Is Opthos Over the Top? What companies are you referring?
chungisking 12/4/2012 | 8:16:44 PM
re: Is Opthos Over the Top?
You've got to wonder what Opthos was thinking. $15M that's been burning for over a year and they spend $500,000 on Supercomm.

I like to compare these guys to Network Photonics another company in the exact same space. Network Photonics has raised $110 million and they showed up with a small 10x10 booth and hand full of people to get their name out there.
NoObjectivity 12/4/2012 | 8:16:42 PM
re: Is Opthos Over the Top? Why aren't there any management profiles on the Movaz website?

Is Bijan as embarrassed of his colleagues as we are?

...and why are there still metro optical start-ups showing up at the party? the service provders have made a clear vote for the incumbents and newly incumbent (eg - ONI.)

Nobody wants to buy from a company that has raised less money than the service provider spends in a day.

Free Willy!
getalight2001 12/4/2012 | 8:16:41 PM
re: Is Opthos Over the Top? What a whiner! Did you even go see what Opthos did at Supercomm?

Not only do they come out of stealth mode, but they show up with a working product AND a live interoperability demo with 5 other vendors. I didn't see ANY other vendors with that kind of execution!

If they truly did that on only $15M, their VCs ought to be lining up to kiss their feet!

Personally, I think their product has alot of merit, and I bet these guys give the traditional SONET players a real run for their money.

I wonder what they'll be able to do with their next $15M? Good luck to all.
getalight2001 12/4/2012 | 8:16:40 PM
re: Is Opthos Over the Top? Hmmm. I think Opthos, ONI, Nortel and CIENA would disagree with you as to the size of the market. (They probably wouldn't hire you in market research or market development either).
chungisking 12/4/2012 | 8:16:40 PM
re: Is Opthos Over the Top?
Cute. There are only 10 service providers with money to buy metro optical equipment. Fly two people to meet with the decision makers individually and you're talking $30,000. Opthos reminds me of a dot com advertising during the Super Bowl! - Arthur
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