Micro MSPPs Are Big

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fgoldstein 12/5/2012 | 3:28:29 AM

re: Micro MSPPs Are Big >I'm not sure what chip you are talking about here. I would think that TranSwitch Ethermap-3 would be ideal in this sort of application. This is a $125 chip. Any thoughts here?

HR put together a report which named a whole heap of chips. They cover a wide price range; I was picking $300 as sort of a midrange number. The costlier chips tend to support higher speeds, and may have more features.

And yes the Adtran Opti6100 does look good -- it was in fact my recommendation for a space-constrained application. It tops off at OC-12, and assumes that you have another vendor's SONET backbone -- Adtran is focused on access, so this MSPP doesn't get very far on its own. I seem to recall a missing feature or two, but it does more than most of the (cheaper) micros.

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douggreen 12/5/2012 | 3:28:27 AM

re: Micro MSPPs Are Big This article, while informative, tries to define the micro MSPP market by the technology inside the box rather than the application. I often find it more helpful to look at the products in terms of the application.

The issue that SPs face is that they want to deliver both voice and data, price it lower than competition, and still make money (duh). This is easy to do if you build a business case based on a massive network buildout and assumed take-rates (like DSL). This is NOT what the service providers want to do, however. They want to be opportunisic in responding to individual customer requests, and still make money. They can do this by leveraging the existing infrastructure.

Aside from ongoing operational costsw, there are three aspects to their cost: the cost of the transport link, the cost of the CPE, and one other piece of equiment that I'll talk about later. Larger MSPPs allow you to lower line cost by using a single link, but the business case never closes until you have several customers on the same box. The service providers HATE having to speculate on getting more customers. They want to do a per-application business case. The goal of a micro-MSPP is to get the product cost low enough to justify a per-customer business case. (Of course, they would still like to make even more money with multiple customers). With ATM based micro-MSPPs back in the 1990s (which tried to solve the exact same problem), the clip level was somewhere between $2000 and $5000.

The other issue that this article doesn't address is this: the CPE is only one end of the problem. The voice and data are multiplexed at the customer end using a variety of mechanisms. You can turn everything to packets and use circuit emulation to carry the voice. You can carry voice native and use virtual concatenation to carry data. Both have their advantages, depending on how the rest of your network is built. Regardless, you have to have some sort of device at the other end to de-multiples the voice and data to feed them into their respective backbones. That device is also a part of the cost of the service as well, and it has a whole different set of requirements.

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Photon_Got_Mad 12/5/2012 | 3:28:27 AM

re: Micro MSPPs Are Big Anyone has any idea what is the cost on the Opti6100?

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OldPOTS 12/5/2012 | 3:28:24 AM

re: Micro MSPPs Are Big Speaking of the App.

Do you think they will continue be do one at a time apps/impementation using Micro MSPPs, at low volume $$$ costs?

Or, DSL with pairs or fiber access links to the CO, like FTTU, for more penetration and with lower volume costs?

(Including customer device, transport and CO aggregator costs)

I see a migration to a valuable enterprise market(1/2) with higher ARPU. Less truck rolls to instal with higher ARPU. Less OPEX risk. I have seen practicle proposals that include FTTU/B to leverage both home, apartments, enterprises and small business coverage. But with full buildout to enterprises and shopping centers first.
These also included the oppertunity to propose reduced prices Micro MSPPs as an alternative migration.

OldPOTS

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douggreen 12/5/2012 | 3:28:15 AM

re: Micro MSPPs Are Big Oldpots,

I see a combination of opportunistic one-at-a-time deployment for the masses with targeted fiber builds to strategic locations. Right now, the cash outlays for an "if you build it, they will come" network seem a bit unpalateable for a CEO trying to please Wall Street. This is especially true as attention focuses on growth via consolidation. At the same time, they have to keep up a good fiber show to apear "visionary."

I expect the larger buildout to be based on the financial success of the initial deployments.

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quikshe12 12/5/2012 | 3:28:14 AM

re: Micro MSPPs Are Big
Technically, yes, it is a US company. It is incorporated in Delaware but all operations are in Bangalore. Just a sales office in US I think.

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sigint 12/5/2012 | 3:28:14 AM

re: Micro MSPPs Are Big quikshe12:
Xalted Networks is another company (indian based) that is coming out with a new MSPP. Looks impressive so far and being built at a low cost...
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Xalted does have an office in Bangalore - but aren't they a US start-up?

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quikshe12 12/5/2012 | 3:28:14 AM

re: Micro MSPPs Are Big
It makes sense that the market is getting crowded, it is one of the few comm equipment categories that has a strong economic case and many willing service provider customers. I agree with the earlier comment, however, that this will be a market won by the likes of ZTE, UTStartcom, Hauwei, and other offshore vendors. Xalted Networks is another company (indian based) that is coming out with a new MSPP. Looks impressive so far and being built at a low cost...

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quikshe12 12/5/2012 | 3:28:14 AM

re: Micro MSPPs Are Big
You raise a good point regarding limited gross margin opportunities for products selling under $10K. One correction, however, the financial impact would be recorded on the income statement, not the balance sheet. A balance sheet records a company's assets and liablities. An income statements records a company's operating results.

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Viewpoint 12/5/2012 | 3:28:12 AM

re: Micro MSPPs Are Big >As I posted before, the CPE box is only half the
>equation. Unlike the larger MSPPs, who can carry
>data in one STS and voice in another, micro-mspps
>have to mux voice and data into a single STS or one
>or more VTs for efficiency.

This is the reason the Chinese have an advantage over startups. Demultiplexing the voice and data upstream is the key. I very much doubt if one micro-MSPP vendor's multiplexing of voice and data in GFP, Cendor'oncatenated SONET payloads or RPR on its OC3/OC12 trunk can be demultiplex by another vendor's MSPP.

It is possible to have good OAM features while keeping the cost under $5,000. It is very hard to make startup understand carrier requirements. In my experience it takes a startup at least a year after FCS to have a shippable product that carrier can buy.

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