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Mergers & acquisitions

Nortel Shuts Optical Switch Effort

Nortel Networks Corp. (NYSE/Toronto: NT) has ceased work on the monster all-optical crossconnect it acquired with Xros Communications in March 2000.

"Nortel has decided not to bring the OpteraConnect PX to market," says spokesman David Chamberlin. Nortel had planned to start commercial trials of the switch later this year.

Chamberlin says "dramatic changes in market conditions" caused Nortel to finally throw in its monogrammed Xros towel. Carriers just aren't interested in big optical switches right now (see No Riches From Optical Switches ).

Sources say Nortel had additional reasons to pull the plug on Xros. It's been an open industry secret that the product's R&D was stymied. And given ongoing delays in its most strategic new products, Nortel is challenged to focus its efforts on more mundane OEO solutions (see Nortel's HDX: The Future Under Fire ).

Chamberlin says it's not yet clear what effect closing Xros will have on Nortel's financials, but he notes that part of the company's $12.4 billion June 2001 writedown was attributable to goodwill associated with the acquisition (see Nortel Buys: Reaping the Whirlwind?).

An undisclosed number of employees who worked for Xros have been laid off. Greg Reznick, the startup's CEO, who has been serving as "president of the Xros division" since the buyout, will continue to report to Brian McFadden, Nortel's president of optical long-haul networks, in an as yet undefined role. "What his next role will be is unclear," Chamberlin says (see When the CEO Hits the Road).

Nortel was criticized for paying too much when it bought Xros for about $3.25 billion in stock, a transaction that amounted to paying about $36 million for each of the startup's 90 employees. Nortel scoffed, citing the deal's basis in stock, not cash, and insisting the price was fair (see Nortel Buys a Monster Crossconnect).

Originally, Nortel hoped to release a massive 1000x1000-port all-optical switch via its Xros deal. But as the months dragged on, it became apparent that the technology had some problems. Sources say the 3D MEMS (micro-electro-mechanical system) components on which Xros originally based its design were unique, but impractical to implement in anything except a massive long-haul switch -- exactly the opposite of what the market wants today.

Despite the canning of the Xros project, sources inside and outside the company say Nortel plans to make the best of what it bought. Efforts are underway to merge elements of the Xros crossconnect with smaller switch chips, they maintain. The results, of course, remain to be seen. Meantime, the waters have closed over the once-bright promise of Nortel's "jawbreaking" all-optical switch.

— Mary Jander, Senior Editor, and Stephen Saunders, Founding Editor, Light Reading
http://www.lightreading.com
self 12/4/2012 | 10:47:25 PM
re: Nortel Shuts Optical Switch Effort You ask a question about a spec posted on IMMI's web site and they change it for you to something less objectionable. If only pricing worked that way.
closends 12/4/2012 | 10:48:02 PM
re: Nortel Shuts Optical Switch Effort I would like to hear the answer, too. On a theoretcial basis, I like hke the MEMS concept, but we have yet to see one reach the field.

Who has LCD answers??
mango 12/4/2012 | 10:49:09 PM
re: Nortel Shuts Optical Switch Effort Spectra Switch claims that their liquid crystal based switches have better IL stability and they do not have complicated control servo in their switches. Can someone shed some LIGHT on this.

Also what is the price comparison between a MEMS switch or OADM vs LC based products.

LR was saying that Spectra Switch's ROADM with 8 ports is ahead of its competitors with MEMS. Is it true!

Mango
self 12/4/2012 | 10:49:11 PM
re: Nortel Shuts Optical Switch Effort I went to look at the IMMI specs on the web site, and they look quite impressive. I did have one question about the IL stability number of +- 0.5 dB. Is there a time frame for that range? Months, days, hours, minutes? I ask because 1 dB swings in IL seem quite large. It sounds like the control loop is continually servo-ing the mirror around.
self 12/4/2012 | 10:49:24 PM
re: Nortel Shuts Optical Switch Effort "But the IMMI 3 dB does not include any closed loop control optics, which adds a couple of dB at least."
______________________________________________

You are incorrect, Sir. The IMMI switch has closed loop control optics and it does not add "a couple of dB." In addition, The IL is less than 3dB.

_____________________________________________

Wow, so the switch fabric does 0.7ish dB to 2.0ish dB? That is quite a box. What are you bringing to OFC? The 80 and/or the 256?
Maxwell loggerhead 12/4/2012 | 10:49:25 PM
re: Nortel Shuts Optical Switch Effort The webpage need to be updated. If you want to know more: OFC booth 1647. We will have our shock tester there dropping our mirror assembly, so you can see first hand how they do vs shock. Its a good product. no smoke, all mirrors.
trixie 12/4/2012 | 10:49:26 PM
re: Nortel Shuts Optical Switch Effort Maxwell jumps in defense:

You are incorrect, Sir. The IMMI switch has closed loop control optics and it does not add "a couple of dB." In addition, The IL is less than 3dB.
___________________________________________

Mea Culpa,

the IMMI web page cites an IL for their new 80x80 switch as 1.7db typical, with a max of 3.0. This is without connectors*, so add another 0.3dB per connector pair. So depending on your arguements of rIL measurement techniques, total loss is 2.0-3.6dB.

I think a variance of almost 2X in IL is a bit loose, and perhaps a bit unrealistic. If the max is 3dB, then 3dB is what I would design to in the network. The rest is marketing and semantics.

Maxwell, care to tell us if it is still the garden variety 3D MEMs?

How does it pass zone 4 compliance for shock and vibration?

Maxwell loggerhead 12/4/2012 | 10:49:27 PM
re: Nortel Shuts Optical Switch Effort "But the IMMI 3 dB does not include any closed loop control optics, which adds a couple of dB at least."
______________________________________________

You are incorrect, Sir. The IMMI switch has closed loop control optics and it does not add "a couple of dB." In addition, The IL is less than 3dB.

-Max
self 12/4/2012 | 10:49:27 PM
re: Nortel Shuts Optical Switch Effort But the IMMI 3 dB does not include any closed loop control optics, which adds a couple of dB at least.
trixie 12/4/2012 | 10:49:28 PM
re: Nortel Shuts Optical Switch Effort Edgecore asks:

If you only have OOO, how the hell do you drop traffic? Or do yu always drop a full OC48 or OC192 to an awaiting big Sonet Box that in turm demuxs it all for you...

_________________________________________

Correct- the difference being that it does not have to go through similar sonet boxes at each node, enroute to its final destination.

Main driver here is cost- line cards (15xxnm regenerators) cost about $50k each, street price. each wavelength in the DWDM system would require 2 of these cards per node. You do the math. you also save on all the filter mux/demux cards at each node, not cheap, either.

Yes, some equipment providers have developed a single card solution. You still need one card, per wavelength, per fiber degree of the node.

TELM offers only a switch. they have two different products, one is OEO, with OC-48 grooming, and 512x512 ports. The other is a smaller OOO device, around 32x32 ports. They may have a bigger unit, using Corning MEMs out, but I really don't pay that close attention to the press releases.

Others, who offer both switching and transport, like SCMR, CIEN, Innovance, NT (someday), are starting to integrate colored optics (DWDM line cards) directly on the switch chassis. This saves an additional interface between the DWDM and OXC, usually a 1310nm SR serial interface.

Getting very low loss OOO switches will be valuable, as you can then do multiple hops across more standard long-haul systems. Most MEMs systems are around 5-7 dB, although I believe IMMI recently announced they would have something in the 3dB range.

I hope that doesn't make it worse....
trixie 12/4/2012 | 10:49:29 PM
re: Nortel Shuts Optical Switch Effort Straight shooter-

All excellent points. The control planes and the traffic planes will become separare entities, each on its own developmnent curve. Even OEO and electronic circuits will be managed out of band, eventually, IMHO.

I suspect the hybrid configuration will win out, as you rarely will need all grooming or all photonic switching at any given node.

The trick re performance monitoring, is *how*. I agree with the premise- these are really analog transmission systems that just happen to carry digital signals- the electronics are either good, or fried, and I suspect the optical plant introduces the majority of signal defects (notice there is no proclamation of expert authority here) Root cause measurement (optical domian) makes sense. I imagine the EMS SW could handle the issue of flaky electronics if necessary.

As has always been the case, we are just waiting on technology to catch up to the ideas. Then the trick is to pick the right technology to deploy.
trixie 12/4/2012 | 10:49:30 PM
re: Nortel Shuts Optical Switch Effort So, if 5 dB is not low enough insertion loss for ULH all-optical, what is an acceptable number?

______________________________________


Well, let's start with the VSR capabilities, which is around 3dB or so. More than one 5dB node in a link and you're pretty much forced to do 3R. 3-4 hops at 2-3 dB/hop is reasonable.

so <3dB would be for openers. I know of one technology right now that is <2 dB, but it will be in need of a good control plane to be useful.

As our religious Zealot, Perry, indicates- managment (automation, restoration, QoS) is key.
trixie 12/4/2012 | 10:49:30 PM
re: Nortel Shuts Optical Switch Effort Perry1961 orated:

This advertisement was brought to you by a true believer,LOL!

__________________________________________

Yes, no doubt a heavy investor, too based on your "fundamentalist" posturing :-)

edgecore 12/4/2012 | 10:49:30 PM
re: Nortel Shuts Optical Switch Effort Thanks for the answer, wish I could digest half of it.

These questions may be lame, but here they go:

But not having any regens, wouldn't you need to pop those OOO switches down in the middle of a very powerful long haul system?

Does Tellium provide LH systems? They must have transponders or something?

Does Tellium have any lasers on their All Optical boxes or just waveguides?

If you only have OOO, how the hell do you drop traffic? Or do yu always drop a full OC48 or OC192 to an awaiting big Sonet Box that in turm demuxs it all for you...

I must be missing the point here, again, please guide me...

EC
straight shooter 12/4/2012 | 10:49:35 PM
re: Nortel Shuts Optical Switch Effort Manoflalambda thank youGÇö-finally a voice of reasonGǪ

All optical is a go, and hereGÇÖs why:

1) Bit and protocol independency insulates the national or regional core from upgrades due to growth or service mix change on the edge. Service providers marginal cost approaches zero to upgrade with the OOO switch productsGÇönever before have they had this level of economic leverage working for them.

2) With an OOO switch installed they can begin to eliminate high-cost components from their network, i.e., transponders and OEO conversions. With an OEO switch product like Tellium, this will never occurGÇötransponders/translation is required for the 1310nm handoff.

3) With intelligent OOO switches, you can begin to implement source routing and achieve banded wavelength routes in a network. This eliminates bundles of ports on the switch, i.e., 4 or 8 contiguous lambdas routed on only one OOO port versus 4 or 8 separate ports on a Tellium switch.

4) Add a simple mux card to an all-optical core and you can achieve the Tellium value proposition while trumping it by 3 to 4X due to items 1 thru 3 above.

5) Performance monitoring in the optical domain if performed right, becomes not a hindrance, but a benefit. It adds an orthogonal view of network performance, often getting down to the actual root cause versus the symptoms measured by SONET bit rate monitoring (especially compared to the often simplistic monitoring implemented in DWDM line systems of today). By using both optical performance monitoring and SONET domain performance monitoring in a complementary fashion, network knowledge is enhanced.

6) Add to the above the benefits of mesh shared protection and faster service provisioning afforded by a switched infrastructure and OOO switches are here to stay.

This isnGÇÖt just my opinion; an executive director at an RBOC pointed out the majority of these points unprompted in a meeting just last week. Yes, as always, this migration and benefits accrued above will take time, maybe especially longer in the current economic and industry specific environment, but it will occur. In the end, you will probably see the majority of the above implemented in regional build outs with all-optical islands, in time it will migrate to wider-scale regional deployment. With the exception of the Corvis Broadwing install, in nationwide networks you will see first see OOO solutions tied to service offerings or specific problem solving, once proven in those instances, it will move into a general wavelength management function in the core.
manoflalambda 12/4/2012 | 10:49:37 PM
re: Nortel Shuts Optical Switch Effort The hybrid approach by Tellium is the only way to go.Read some of Krishna Bala's white papers to learn the futility of 3D MEMS at this point in time.I'm not surprised Lucent flopped with the lambdarouter,or that the other 3D MEMS switches are falling by the wayside.

Care to elaborate as why you see the LR as a flop? Lucent, Corvis and Calient et al are creating the market and the traction takes time. Lousy timing with the general slump but the products are there and work.

And does stuffing an OOO into the Aurora make it the next best thing since sliced bread? May be, may be not. But Tellium won't be the only one out there...

Salute,
Manoflalambda
perry1961 12/4/2012 | 10:49:40 PM
re: Nortel Shuts Optical Switch Effort "What are the main, obvious drawback to the all optical apporach:
-outside of no bandwidth management/grooming?"

Automation and restoration.

The hybrid approach by Tellium is the only way to go.Read some of Krishna Bala's white papers to learn the futility of 3D MEMS at this point in time.I'm not surprised Lucent flopped with the lambdarouter,or that the other 3D MEMS switches are falling by the wayside.
2D technology had bugs too,but the problems could be tackled today,not 15 years from now...
ADI has made great strides lately.They announced Q3 introduction for Tellium's clos MEMS array.From their white papers,we know this includes final assembly with the Corning module,since they had to be hermetically sealed in-house.Lots of design issues were apparently tackled successfully.
Tellium's Full Spectrum will be the best of both worlds and will be all the Telecos need for the next 10-15 years....until OOO is ready to go it alone...
This advertisement was brought to you by a true believer,LOL!
detailsdetails 12/4/2012 | 10:49:46 PM
re: Nortel Shuts Optical Switch Effort hawkman,

would you believe they have been selling it thru their stealth sales force to stealth customers who have been paying for it with stealth money and a bit of stealth financing to boot ;-D
AAL5 12/4/2012 | 10:49:55 PM
re: Nortel Shuts Optical Switch Effort Equinox thats a good start, we will get you through this it will be ok!

Following the following procedure:

1. If not in Bay area, take plane to San Jose
2. Get on 101 North, get off at Great America
3. Drive past Nortel buildings (in particular the former Xros building)
4. Note the lack of cars in car park

Follow the above steps and you too can be enlightened.

AAL5
equinox 12/4/2012 | 10:49:56 PM
re: Nortel Shuts Optical Switch Effort Maybe I should change my name to zenith or solstice or eclipseGǪ
equinox 12/4/2012 | 10:49:56 PM
re: Nortel Shuts Optical Switch Effort Hello, my name is equinox and I am an alcoh...oh, I mean, I am in denial. Denial is the first stage, right? What am I denying? What am I stating? I am not stating that Xros will continue. I am not stating that Xros is dead. I simply quoted what the article said. If some of you have insight that ALL of the Xros employees are gone, so be it. It makes sense to me that you can not develope a product without the talent to move forward.

self 12/4/2012 | 10:49:58 PM
re: Nortel Shuts Optical Switch Effort So, if 5 dB is not low enough insertion loss for ULH all-optical, what is an acceptable number?

______________________________________
What are the main, obvious drawback to the all optical apporach:

-outside of no bandwidth management/grooming?
____________________________________________

Those are two biggies, plus you have control pane issues, protection, QoS. GMPLS is the next set of emperor's new clothes to fix all these concerns, but it remains to be seen if it will be viable.

It is an attractive proposal mainly for its cost.

I think when Ultra-long-Haul capabilities (which can also be also translated as low OSNR or high loss tolerance) is coupled with good low loss (and I'm not talking about 5dB MEMs here) photonic switching, there could be a play.

The trick is how to you control the wavelengths, and keep track of the condition of the "water" that is running through the "pipes"? A few more bits of technology should fill in the gaps shortly.

As it stands now, my guess is that it's still early for OOO. As others have started in presentations at the various shows, some sort of hybrid OEO/OOO switch node will most likely evolve. Grooming to handle aggregation and ADM functions, photonic switching to handle through traffic in the most cost effective manner.
trixie 12/4/2012 | 10:49:58 PM
re: Nortel Shuts Optical Switch Effort What are the main, obvious drawback to the all optical apporach:

-outside of no bandwidth management/grooming?
____________________________________________

Those are two biggies, plus you have control pane issues, protection, QoS. GMPLS is the next set of emperor's new clothes to fix all these concerns, but it remains to be seen if it will be viable.

It is an attractive proposal mainly for its cost.

I think when Ultra-long-Haul capabilities (which can also be also translated as low OSNR or high loss tolerance) is coupled with good low loss (and I'm not talking about 5dB MEMs here) photonic switching, there could be a play.

The trick is how to you control the wavelengths, and keep track of the condition of the "water" that is running through the "pipes"? A few more bits of technology should fill in the gaps shortly.

As it stands now, my guess is that it's still early for OOO. As others have started in presentations at the various shows, some sort of hybrid OEO/OOO switch node will most likely evolve. Grooming to handle aggregation and ADM functions, photonic switching to handle through traffic in the most cost effective manner.

edgecore 12/4/2012 | 10:50:02 PM
re: Nortel Shuts Optical Switch Effort
What are the main, obvious drawback to the all optical apporach:

-outside of no bandwidth management/grooming?

THX

EC
hawkman 12/4/2012 | 10:50:06 PM
re: Nortel Shuts Optical Switch Effort Maybe they will have Stealth people that drive stealth cars that secretly work on this stealth project from their stealth jobs at other companies. It could happen.
dodo 12/4/2012 | 10:50:07 PM
re: Nortel Shuts Optical Switch Effort AAL5

Mind you there are lots of civil & industrial engineers there together with MBAs to think otherwise. Those are the guys who know ONLY the bottom line .

Most of the EES are gone.

:-)
AAL5 12/4/2012 | 10:50:09 PM
re: Nortel Shuts Optical Switch Effort Equinox you are either extremely naive or living in complete denial of the facts. One of the most important resources a company has when developing a product is the knowledge possessed by the engineers actually developing the product. If the intention is to restart this project at some later date you do not layoff the people that developed it.

You seem to be suffering from a major case of denial.

AAL5
dodo 12/4/2012 | 10:50:10 PM
re: Nortel Shuts Optical Switch Effort So if most of the staff working on this project are sacked, how would they release the product when the opportunity resurfaced.
This is high tech - no accounting.

puddnhead_wilson 12/4/2012 | 10:50:11 PM
re: Nortel Shuts Optical Switch Effort >Just stating the obvious here...."Postponed indefinetly" is different than canned.


equinox, equinox ... you are stating the "literal" -- it's the rest of us are stating the "obvious."
equinox 12/4/2012 | 10:50:13 PM
re: Nortel Shuts Optical Switch Effort All -

Just stating the obvious here.

"Nortel Networks to Postpone Debut of Xros Switch...Nortel, declined to comment on whether the decision to delay the release of the product would result in further charges, nor would it give a clear time line as to when the product might come to market."

"Postponed indefinetly" is different than canned.

http://story.news.yahoo.com/ne...
AAL5 12/4/2012 | 10:50:19 PM
re: Nortel Shuts Optical Switch Effort Equinox,
can I assume you worked on the FUD Equinox project that NT kicked off a few years ago?

Have they canned it yet? After looking at the initial design it looked like a lot of 'thinkers-not-doers' with too much time on their hands.

NT has more than its fair share of these wasters.



puddnhead_wilson 12/4/2012 | 10:50:19 PM
re: Nortel Shuts Optical Switch Effort LOL. equinox in denial mode....
optopuss 12/4/2012 | 10:50:19 PM
re: Nortel Shuts Optical Switch Effort I heard that some of the Nortel Sr Mgt folks who recommended this acquisition are now working at Innovance. Does anyone know if this is true?
bigdaddy 12/4/2012 | 10:50:20 PM
re: Nortel Shuts Optical Switch Effort Equinox,

So like now Nortel is following the Cisco lead on the Monterey product.

"especially if no one is expecting anything" Under promise and over deliver right?

Hey whatever happened to that product from Boca?

There must have been a cheaper alternative for ULH. Hmmmm.
marksman 12/4/2012 | 10:50:20 PM
re: Nortel Shuts Optical Switch Effort munnster from early RTP days?
hawkman 12/4/2012 | 10:50:23 PM
re: Nortel Shuts Optical Switch Effort with very few exceptions, all Nortel / XROS people are looking for new jobs. Getting this one back online would be a resurrection of biblical proportions, but Easter is coming, so you never know.
asmo 12/4/2012 | 10:50:25 PM
re: Nortel Shuts Optical Switch Effort
Employees must be driving stealth cars to work as well then, as the car park in Santa Clara doesn't appear to be very full today.

;)

A.
equinox 12/4/2012 | 10:50:26 PM
re: Nortel Shuts Optical Switch Effort "Nortel has decided not to bring the OpteraConnect PX to market,"

Just because it is not coming to market today, does not mean it is necessarily dead. Surprises are better then letdowns, especially if no one is expecting anything.
[email protected] 12/4/2012 | 10:50:29 PM
re: Nortel Shuts Optical Switch Effort Optical-Man

Thanks for your input and comments. I am a big fan of parody, I might even welcome parody on the company. My concern is that anyone might perceive his comments as coming from Lumos. Lumos supplied Xros with software as we do many other vendors, we cannot be perceived as commenting on the management.

If someone was to post as Nortel, no-one would assume that it was representative of Nortel, but the smaller the company the more likely the misinterpretaion.

FYI I have raised this with LR also. I dont want to clutter this board up with further comments on this topic, please email me if you have further comments. Also if the individual calling himself lumos would email me that would be helpful.

Thanks.


>Fergal,
>couple of points on the poster lumos. 1) parody >is protected in the U.S. (he wasn't using >parody, but I bet he'll start now and 2) You >should've taken this up with LR management >instead of on a public message board (that's >rule one in ceo training school. Oh yeah, 3) >There's lots of nortel1's and lucent_is_bad >posters running around here, you never see >anyone complain.
>If you have a legit concern, take it up with LR. >I'm sure they'll put you in touch w/ lumos and >you can deal with this in private. (personally, >I'd say I would change my handle)

sauron5 12/4/2012 | 10:50:29 PM
re: Nortel Shuts Optical Switch Effort Um. I'll take D. with Vulture Capitalists, er
Venture Capitalists. Doh!

Sauron
dodo 12/4/2012 | 10:50:30 PM
re: Nortel Shuts Optical Switch Effort ....and Pigs have wings

Kephill
Don't believe what the spin meister Chamberlin is saying.
A lot of sweat in the labs these days to get the HDX out.

:-)
iamnoone 12/4/2012 | 10:50:30 PM
re: Nortel Shuts Optical Switch Effort How come Nortel claims there is no market for their switches, and OMM and Onix seem to agree, yet Agere claims to be selling their 3D MEMS switches in



Who is telling the truth? Or has Agere simply won the game (for now)?
kephill 12/4/2012 | 10:50:31 PM
re: Nortel Shuts Optical Switch Effort The company has determined that the HDX optical switch is a better product for today's market than the OPTera Connect PX, despite the fact that the OPTera Connect PX was successfully tested in customers' labs, added Chamberlin.

http://zdnet.com.com/2100-1105...
microfab 12/4/2012 | 10:50:32 PM
re: Nortel Shuts Optical Switch Effort The cross connect mems mirrors are not too difficult to develop at all. Many firms already have a comparable function mems element - but without the problems of Xros's design. So it is just that Xros' won't perform well enough for commercial deployment. And it is not worth continuing the Xros derived effort in its present form.
buliwyf 12/4/2012 | 10:50:32 PM
re: Nortel Shuts Optical Switch Effort (Apply this to any tech sector)

Was the bubble caused by:
A. cognitive dissonance
B. stupidity
C. greed
D. all of the above

And for fun break your response down by:
Investors (Retail/Institutional)
Bankers
Tech Gurus
MT
Workers (ENG/OPS/FIN/MKTG/SALES (sorry if I missed anyone... oops Bus Dev!! LOL)
VC's

donethat 12/4/2012 | 10:50:33 PM
re: Nortel Shuts Optical Switch Effort I had twenty five years in the optical transmission business, and the posts on this subject clearly demonstrate that people, over time, learn nothing. Examples:
1. In 1978, our systems engineers/product managers conducted a massive study that concluded our first fiber optic system should have a line rate of 6 Mb/s("No one will ever need more") We ignored them and developed a 45 Mb/s system, that quickly became too small.
2. Our first DWDM system was being evaluated by customers when I left the company in 1996. NO ONE (including potential customers) at any time, during the development of this system, ever mentioned the Internet.
3. March, 2000: What was going on at OFC could only be compared to the black tulip bulb frenzy of the 19th century. HP made an announcement of their "Bubbles" technology that shot there stock up about 30%, and I don't think there is a product in the market place as yet...etc..etc..
4. Prior to the bust, the larger companies could bet on all the ponies in the race, thereby assuring themselves of having a "winner" in every race. (The old Bell Labs) Fine for technology, terrible for business.
5. Will it happen again? You bet. What we've seen in telecom are the same principles of human nature that control the stock markets: fear and greed. And they aren't going away any time soon.
ivehadit 12/4/2012 | 10:50:33 PM
re: Nortel Shuts Optical Switch Effort amazing a company that saw the 10G market happen doesn't see the light on wavelength switching?

look for nortel to make a purchase in this area. Its not the market isn't there, the XROS was too difficult to develop.
spookydoodle 12/4/2012 | 10:50:34 PM
re: Nortel Shuts Optical Switch Effort Doods,

People internal to Nortel know well that Xros PXC was in direct competition with HDX. HDX group, being the strongest, wanted to push HDX despite enormous benefits of PXC. 1000x1000 port PXC was already in trial by customers.
let-there-be-light 12/4/2012 | 10:50:34 PM
re: Nortel Shuts Optical Switch Effort The day I heard the announcement about the Xros acquisition, I knew it was a stupid decision, just as did many other posters here, I am sure.

Call that 20:20 hindsight if you will...
Star 12/4/2012 | 10:50:35 PM
re: Nortel Shuts Optical Switch Effort "KOOL-AID, GET YOUR TALL GLASS OF NT KOOL-AID HERE"
ntinsider 12/4/2012 | 10:50:35 PM
re: Nortel Shuts Optical Switch Effort As a shareholder, I was happy to see that Nortel finally pulled the plug on Xros. You can all spend days arguing the merits or lack thereof of MEMS technology in general and Xros's implementation. And I'm reading back through the thread that most of you have superb 20:20 hindsight when it comes to aquisitions.

The bottom line is that in todays tough economic environment in the telecom industry, it makes no sense to bring out a product (especially a large expensive one) that nobody wants. Maybe the PX works well, maybe it doesn't. It really doesn't matter in today's environment. I agree with this decision. Cut your losses, put the technology on the shelf and wait for better days. Give it a few years, I'm sure that OOO's will gain traction when the large carriers start spending again.
This may not be good for NT stock but it is the best decision.
gary munn 12/4/2012 | 10:50:36 PM
re: Nortel Shuts Optical Switch Effort The real point is that NT bet the farm on several acqusitions, technologies / markets and lost on all fronts. The real value NT has is embedded base, and in a slow growth environment that is even questionable. The question is can NT fund the next generation anything ? Since a few more quarters of losses will put them in technical bankruptcy, it looks like sustaining R&D on current products will be a problem much less next gen. development.
trixie 12/4/2012 | 10:50:36 PM
re: Nortel Shuts Optical Switch Effort You can say that about Cisco, Lucent, Ciena etc. None of these companies saw the crash. If the market had held up, they could have spent the additional money on R&D to develop the PX.
_____________________________________________

I think greed and denial were also at play here.

A classic case of too caught up in the frenzy to notice the bottom had fallen out.

And if they had finished the developemnt? Are you saying the market would have accepted this device? I don't agree.

If NT wanted to finish it, they certainly could allocate the funds to do so.

Litewave 12/4/2012 | 10:50:39 PM
re: Nortel Shuts Optical Switch Effort Author: jimmy

Well?


Word on the street.. dead as a dodo (no disrespect meant to the bird).

Spoke to people who tested the gear, doesn't live up to the hype, and unecessary in today's market (theres more flapping lips at Calient then technology anyway, especially at IETF events).

I suspect Calient is out looking for a buyer. ALA's been mentioned more than a few times (not sure why, since it somewhat conflicts with the 1660).

Not many other potential buyers, except maybe SI, SCMR, CIEN etc, but with this Xros fiasco, I'd have my doubts about anyone making serious moves in this direction.

Which points back to my first line.
Litewave 12/4/2012 | 10:50:40 PM
re: Nortel Shuts Optical Switch Effort Lets face it folks, its fairly obvious whats really going on.

Regardsless of the Xros technology and how much was/is being spent on it, the bottom line is that NT is hemorrhaging big time, better to amputate an arm then bleed to death.

Investors should rejoice with this move (and dare I say perhaps go long on NT? ;-)
microfab 12/4/2012 | 10:50:40 PM
re: Nortel Shuts Optical Switch Effort Hi Phaet(h?)on, ( no relation to the Fremont firm??)

First I will point out that I have no tears to vainly shed - I wish the Xros suceeded. I never wish failure upon anyone. NT has been a major force in the recent Internet hardware market expansion ( previously ) and has in its prime been a formidable force.

Despite the downturn, there remains deep bench strength at NT and I would never write them off. The acquistions blew a lot of cash and they were done in haste - but the thought among many firms was the net was exploding like a hockey stick and the mistake woud have been to make excuses and avoid competing.

Regrettably there was too much haste, and too much waste - but NT was not the only practicioner of the fine art of haste to attempt to lock in elusive market share. In retrospect it is easy to criticize and diminish the amazing accomplishments of NT in its heyday.

I am in total awe of their amazing accomplishements - the trailblazing leader in 10G technology - and close being the major backbone of the net today. No small accomplishement and acheived under the able stewardship of John Roth -a man with vision and drive. I hope they come back to their former prominence.

Thank you for the confirmation of most of my premises. I sense that despite the slowdown there will remain economic reasons to implement large OXO switches, but until recently no firm but one or two has shipped larger port configuration ( using the 2 plane mirror arrays for 3d free space switching ).

My sense is the impression of weak demand on the part of the photonics ( pheathonics??? ) coterie, is actually caused by general unavailablity ( ie most are nowhere near shipping something commercially viable and scalable to high port count - and the effects of the downturn.)

The other factor is that despite the apparent obvious usefulness of OXO and interest, the integration in a valued manner into existing network architectures is neither trivial nor necessarily immediately beneficial. But it will happen - when the units begin to ship and the benefits become apparent ( which there are many ).

The other thing to point out - without highlighting particular firms - is that most of the noise is made by components manufacturers of the mems chips, yet the utility of the mems is nearly negligible unless a full up system - optics, electronics, control software primitives, and network interface software and finally network level integration is acheived.

This takes time. But it will and is happening in a few instances and then there will be no going back. Going forward ( how I despise that trite phrase )from the depth of the burst bubble, there still remains the relentless traffic growth which will come and rear its ugly head in the coming years.

Broadband will become more prevalent and when for example movies and broadband content starts happening who knows what to say ( bubble 2?)

So there will be a market, which will not have VC type hockey stick acceleration intially, but will be large enough to make some serious dollars in the next few years if you survive the coming quarters.

Best Regards,

microfab
gea 12/4/2012 | 10:50:40 PM
re: Nortel Shuts Optical Switch Effort There are lotsa of issues on a variety of levels here...

First of all, MEMS does ot equal OOO. You could have an O/E/O/E/O switch for good reason (in other words, imagine a transpondered switch wih an optical core): this would allow your matrix to handle OC-768 and other stuff simply by changing transponders.

Another problem with OOO is the lack of overhead monitoring, which despite Paul green's repeated calls to "resist the temptation to look at the bits", is still what the big network operators want, and format-independent, all-optical monitoring is years and years away from being commercial.

Fianlly, without an all-optical regenerator,it is necessary to do careful power/noise budgeting to utilize an OOO such as Corvis apparently does. The advantages are potentially large: greatly redeuced costs and (in some places more important!) reduced power consumption and space. Significantly reduced. Oh, and true format/bitrate transparency (which seems less and less useful now that Ethernet is growing SONET frames for the WAN/MAN).

Ultimately, MEMs-based OXCs look like they're inevitable to me, but the time for them sems to have been delayed. Tellium, by the way, was scooping up a whole batch of MEMs bigshots so is surely waiing in the wings with a badass MEMs OXC.
optical_man 12/4/2012 | 10:50:41 PM
re: Nortel Shuts Optical Switch Effort Author: [email protected] Number: 28
Subject: Re: Another ex. of mismanagement Date: 3/5/2002 6:55:39 PM
This is in response to the messages posted under the name lumos.
Please do not use that name as your message board ID. Lumos is vendor of management software to many of the leading vendors in the optical networking industry. Any opinions you express could be construed as being the opinions of Lumos Technologies. This could be harmful to our business. Lumos is a trademarked name.
Thanks for your understanding
Fergal Lyons

Fergal,
couple of points on the poster lumos. 1) parody is protected in the U.S. (he wasn't using parody, but I bet he'll start now and 2) You should've taken this up with LR management instead of on a public message board (that's rule one in ceo training school. Oh yeah, 3) There's lots of nortel1's and lucent_is_bad posters running around here, you never see anyone complain.
If you have a legit concern, take it up with LR. I'm sure they'll put you in touch w/ lumos and you can deal with this in private. (personally, I'd say I would change my handle)

ghosta 12/4/2012 | 10:50:41 PM
re: Nortel Shuts Optical Switch Effort I'm tired of hearing that MEMS are not reliable because they have moving parts. This is a completely unfounded misconception based on an extrapolation of what we know at macroscopic scales. One has to apply the mechanical scaling laws to understand reliability issues at the micro scale. Texas Instruments has developed their Digital Micromirror Displays (DMD) (TM), which have been shown to be reliable up to 1e10 cycles for arrays of millions of mirrors. As usual, it's dangerous to jump to conclusions without understanding the facts about something.
ghosta 12/4/2012 | 10:50:41 PM
re: Nortel Shuts Optical Switch Effort Just to set the historical record straight, Xros was NOT the first company to tout an all-optical MEMS crossconnect. First of all, Lucent et al. had been working on 2D MEMS devices for years before this. Secondly, even 3D MEMS (which is what Xros was building) were first proposed and developed by a company called Astarte Fiber Networks - since bought by Tellium. Ah, how soon we forget....it's too bad so few people in the industry were there when this whole thing started.
phaeton 12/4/2012 | 10:50:41 PM
re: Nortel Shuts Optical Switch Effort Let's say a few good words about the passed away!
Xros made good service to MEMS and optical community. It created unmatched resonance among networking professionals and venture capitalists. It initiated floods of capital investments and development activities in the field of OXC.
In the year following the acquisition demand for MEMS and optical engineers reached all time high. I hope most of the readers enjoyed the ride.
We should remember Xros for all the good it created.

Now, coming back to the cause of death. I tend to agree to Microfab statement, that it were mostly the deficiencies of the switching mirror design, but not completely clear on his notion: "..There is a huge market for the type of switch, and the all optical cross connect will be a large business in 2-5 years for someoneGǪ."
In the previous messages some folks claimed that OOO do not offer any real advantage compare to OEO.
Could you please explain why somebody still wants massive scalable OOO switches.

Yours,

Flying high,

PHAETON
microfab 12/4/2012 | 10:50:42 PM
re: Nortel Shuts Optical Switch Effort I hear lots of noise and conjecture here....
Most of it is conjecture.

The mems engine was the problem. Unique to the Xros switch were large mirrors with relatively low mechanical resonant frequencies. Not a good robust design.

This is modestly well known in the mems community and Xros telegraphed and proclaimed their extremely low optical losses from their unusually large mirrors at mems meetings. Yes low losses - but not a commercial grade mems element ! ( they did not say that - but you could tell with a bit of thought )

The curious thing was the Xros mems was almost a clone of an early work from a Stanford professor on a 2 D mems mirror scanner which was "floppy" and never really tested against other products for merits or disadvantages...Just a nice big mirror with low losses ( and weak mechanical strength / poor shock resistance )

And I heard apparently the folks at NT who authorized the acquisition did not do what was albeit a bit of esoteric due dilligence, needed to figure this out.

They apparently focussed on the bidding war, and this was the thing which drove the price for Xros up in the matter of a few months from hundred of millions to billions.... Not technical value from any adequate due dilligence of the mems robustness or quality.

Why was that important? Because the mirrors fell out - in shipping, in use, due to acoustic and thermally induced noise and also they could not be steadied in operation.

Basically it was poor mems design. There is a huge market for the type of switch, and the all optical cross connect will be a large business in 2-5 years for someone. NT might yet get it - but not with the Xros team.

If the mems elements worked, it is trivial to make a large or small port OXO switch - scaling port count is not some kind of magic in the dual mems mirror array 3d optical switch, optical architecture. And I am not comapring this to a small blocking port planar architecture like OMM or others. Xros had a readily scalable optical architechure - like other high port count players.

But if the mems element is not robust in either design or fabrication - you boot out the perps.

NT will in all likelihood get into making a switch, but not with these folks who were behind the Xros design. Just cannot tell for certain how long it will be - it might be occuring already.

Best Regards,

Microfab
lightshow 12/4/2012 | 10:50:42 PM
re: Nortel Shuts Optical Switch Effort Ahhh, spoken like a true Tellium-ite.....
lumos 12/4/2012 | 10:50:42 PM
re: Nortel Shuts Optical Switch Effort It lets the cat out the bag
redneck 12/4/2012 | 10:50:43 PM
re: Nortel Shuts Optical Switch Effort In the middle ages, there was a scam where people would sell a "pig in a poke". A poke is basically a sack. In a market, a vendor would offer a wonderful pig in a poke for sale. Of course, the vendor would not let the buyer look inside the poke to see the pig, but would instead describe how wonderful the contents of the bag was. The buyer could see something moveing in the bag, and would make the purchase. When the buyer got home, and opened the bag, he was suprised to see that what was in the bag was actually a useless cat as opposed to the wonderful pig that had been described.

Lesson learned in the middle ages . . . Never, Never, Never buy a pig in a poke. Even if you are worried that your competitors will buy it out from under you, Even if you know there is a huge market for pigs, Even if you know that in the short term people will congratulate you on your purchase, Never, Never buy a pig in a poke.
lumos 12/4/2012 | 10:50:43 PM
re: Nortel Shuts Optical Switch Effort Its also in Harry Potter.
lumos 12/4/2012 | 10:50:43 PM
re: Nortel Shuts Optical Switch Effort Now theres an image I dont want to fall asleep with tonight.
Star 12/4/2012 | 10:50:44 PM
re: Nortel Shuts Optical Switch Effort I'm not sure the term is missmanagement ?
I think it might be NO management !!
NT operated with Jabrones and jackass's driving the bus....
Hey, did I mention PROOOOOOOOOOWWWWWLLLLEEERRRR
Points !!
Loyalty Baby !!!
photonboy 12/4/2012 | 10:50:44 PM
re: Nortel Shuts Optical Switch Effort So you work in the marketing department of which MEMs company?
If Nortel really needs an all optical switch why wouldn't they just scale back from 1000 to 256? Until one of the big vendors offers all optical, all the others will stay away. The question is, who will risk deploying unproven technology in a down market? Optical switches based on moving parts that are not reliable don't save Capex for anybody. Seems like some program manager will be putting his job on the line to push for deploying a MEMs switch.
Star 12/4/2012 | 10:50:44 PM
re: Nortel Shuts Optical Switch Effort GIVE ME A BREAK ..........
THAT JACKASS ROTH HAD NO IDEA WHAT HE WAS BUYING WHILE ON A BUYING SPREE THAT DESTROYED NT.
NOW THE ACTING MANAGEMENT, WHO HAVE LESS OF A CLUE ARE TRYING TO PUT LIPSTICK ON A PIG !!
[email protected] 12/4/2012 | 10:50:44 PM
re: Nortel Shuts Optical Switch Effort This is in response to the messages posted under the name lumos.

Please do not use that name as your message board ID. Lumos is vendor of management software to many of the leading vendors in the optical networking industry. Any opinions you express could be construed as being the opinions of Lumos Technologies. This could be harmful to our business. Lumos is a trademarked name.

Thanks for your understanding

Fergal Lyons

[email protected]
http://www.lumos.com
9954 12/4/2012 | 10:50:44 PM
re: Nortel Shuts Optical Switch Effort Not MEMS, Not Marketing. Its a matter of cost to scale the Xros platform down because of design considerations that were made in order to make the device 1000x1000. It can be a 256, but the cost per port and the form factor will not be accepted by the market.
9954 12/4/2012 | 10:50:45 PM
re: Nortel Shuts Optical Switch Effort Xros was the first company to tout an all optical MEMS cross connect, of course Lucent was showing that picture of their Poly Silicon, hinged mirror, but they weren't and still dont seem to be getting any traction. (unless someone here can tell me differently.) Back then, all the carriers were clamoring for more ports, more bandwidth, more everything! And they had the $$ to spend. Nortel bought XROS because if it did work, they didnt want anyone else to have it, and it was exactly what their customers were saying they wanted. Of course we could debate the cost ad nauseum, but it was a different world at OFC 2000, and as we all know, corporate valuations were very different. This acquisition was made because Nortel was scared someone else would get the technology their customers wanted, and therefore cease to be Nortel customers. I dont know for sure, but I would be surprised if Nortel was the only one interested in buying Xros, and the bidding was driven higher by other interested parties.
let-there-be-light 12/4/2012 | 10:50:45 PM
re: Nortel Shuts Optical Switch Effort

"Doesn't anyone remember that the day Nortel announced that it was going to buy Xros for $3.24 Billion their Market cap went up over $6 Billion?"


3.24 billion seems to be a lot of money to pay for an effective press release, but point well taken. I guess the real idiots were the investors.
ng_mui 12/4/2012 | 10:50:46 PM
re: Nortel Shuts Optical Switch Effort When XROS announced their product as a 1000x1000
photonic switch it was clear that something smelled, when at the time most people were talking
32x32 or 64x64. And in fact they only admitted
fairly recently the fact that their demo switch was much smaller
in size, and 1000x1000 was the eventual target
rather than something they were capable of doing.
Nortel were naive and greedy, and this was only
one of a series of badly chosen and poorly
executed acquisitions for them. However they
are still in the running with the HDX product,
which is more like what the market wants,
if they can manage to get it out the door.
lumos 12/4/2012 | 10:50:46 PM
re: Nortel Shuts Optical Switch Effort It was very difficult in those heady days to get any type of research that did not predict massive internet growth and bandwidth 'to the moon, Alice'
lumos 12/4/2012 | 10:50:46 PM
re: Nortel Shuts Optical Switch Effort There was no due diligence in 'those days'. Any company that delayed and actually thought about what they were buying would get scooped by their competitors and lose out on the biggest deal of their lives. Hence the mess we find ourselves in now, with massive glut in LH and underuse in lambdas.
9954 12/4/2012 | 10:50:47 PM
re: Nortel Shuts Optical Switch Effort Doesn't anyone remember that the day Nortel announced that it was going to buy Xros for $3.24 Billion their Market cap went up over $6 Billion? That was a great day for Nortel. Now of course we see that the answer is not 1000x1000, but smaller in the near term. 80, 128, 256 ports are the answer and Xros designed their box to be 1000+ ports and although scalable down (with some difficulty) the price was way too high. Nortel has to have another player in the wings that will be supplying them with an all optical switch. The Major systems vendors can not afford to leave that area out of their portfolio because the carriers need it because it will save them money on Capex. All optical switching is not dead at Nortel, only Xros is dead at Nortel.
optical_man 12/4/2012 | 10:50:47 PM
re: Nortel Shuts Optical Switch Effort do I smell BCE getting back into the mix............................................................................?
gea 12/4/2012 | 10:50:48 PM
re: Nortel Shuts Optical Switch Effort Optigirl:

Well, my point was that acquiring an optical switch product seemed to make some sense on some levels at the time of nortel's acquisition. The price, however, is a different matter.

The fact that there were no customers yet certainly indicates tha the huge price of this thing was rather crazy (unless, of course, Nortel knew their stock was going to tank!!!).

However, I think things seemed to be moving so fast at the time that I think they wanted to make sure they had a product to fit this hole: everyone was talking "next gen packet networks", and indeed some of the big carriers were building out their ULH networks that way (and they did, too! Most notably Qwest and ATT). Nortel wanted a complete product line, and at the time it really must have seemed that deployment of OXCs was immanent.

In retrospect, it would seem like Nortel biggies convinced themselves they wanted an OXC FAST, and found a way to rationalize the high price they had to pay. Although you could probably charaxcterize this as a "big mistake", I don't think it was completly without any context or sanity.
Mr. Mutt 12/4/2012 | 10:50:48 PM
re: Nortel Shuts Optical Switch Effort I may be going out on a limb here, but I would think that folding a 90 person division they paid $3.2B for without making any revenue for the company is fairly significant.

I only wish I was one of the 90. A workers best dream; sell an idea, get bigtime paid, get laid off. Beautiful!
optigirl 12/4/2012 | 10:50:48 PM
re: Nortel Shuts Optical Switch Effort Although you could probably charaxcterize this as a "big mistake", I don't think it was completly without any context or sanity......

----------------------------------

uh huh.....

Then again, easy for us to sit here and wax poetic about other people's foibles eh?

jimmy 12/4/2012 | 10:50:49 PM
re: Nortel Shuts Optical Switch Effort Well?
optigirl 12/4/2012 | 10:50:49 PM
re: Nortel Shuts Optical Switch Effort Gea:

You are contradicting yourself here. If you don't why they paid so much then there was obviously a problem. Nortel had been around long enough to know better about how the telecom market works and that is things just don't happen overnight.

Q: Were any of Nortel's customers looking to place an order?

Q: Was there any reason to pay this kind of money? And please don't anyone say that they bought it with stock. There is an issue of dilution as well as carrying assets on the balance sheets that paints a certain picture of their health.

Q: Didn't anyone up there practice any due care to see if this piece of junk actually worked?


Mismanagement by any other name......
The_Holy_Grail 12/4/2012 | 10:50:50 PM
re: Nortel Shuts Optical Switch Effort Maybe they read to many of those so called analyst predictions and market forecasts reports. Everyone of which was way to optimistic.

How come we don't see needs and forecasts from the customer base?

Good luck to the employees who are impacted.
gea 12/4/2012 | 10:50:50 PM
re: Nortel Shuts Optical Switch Effort I don't agree 100% on this one. Wait, the cost or what was basically a prototype with no customers hints of some kind of sweetheart stok trading deals.

BUT, on a technology level, a massively scalable all-optical cross connect looked like it was going to be a real necessity over night, as networks moved over to packets-over-OC-48c and 192c. A company like Nortel may not have seen the Xros box as a big money maker any time soon, but probably felt that they could not afford to have such a hole in their product line and so got a little antsy. I never did fully understand why on earth they pai so much, however.
let-there-be-light 12/4/2012 | 10:50:50 PM
re: Nortel Shuts Optical Switch Effort Remember the days when Nortel was the optical god of the universe?

Everything they did seemed to be right. Stories based on glove compartments of Jaguars became transformed into legends of profound insight and visionary leadership.

Now, they just seem like the dumbest losers in town. By comparison, even stupid old LUcy seems quite smart, if that's possible.

Funny how things change so fast. Pride coming before a fall, maybe.?? Belzy.. still waiting...
kephill 12/4/2012 | 10:50:51 PM
re: Nortel Shuts Optical Switch Effort "they surely should have been able to better predict market conditions"

You can say that about Cisco, Lucent, Ciena etc. None of these companies saw the crash. If the market had held up, they could have spent the additional money on R&D to develop the PX.
trixie 12/4/2012 | 10:50:52 PM
re: Nortel Shuts Optical Switch Effort Consulting with the right techies could have saved billions.



Not to mention the right market consultants.....

I'm not close enough to this to know if it was technically feasible, but they surely should have been able to better predict market conditions.

The_Holy_Grail 12/4/2012 | 10:50:52 PM
re: Nortel Shuts Optical Switch Effort Where are the folks who promoted and bought off on this acquisition? This is another clear example of Sr Mgt being cluless in the phtonics and opto-electronics. Where was the due diligence on this acquisition?

Consulting with the right techies could have saved billions.
melao 12/4/2012 | 10:50:52 PM
re: Nortel Shuts Optical Switch Effort The Qtera appears to be on same way right ?

kephill 12/4/2012 | 10:50:52 PM
re: Nortel Shuts Optical Switch Effort Once again, LR prints the negative news and ignores the positive. LR fails to comment on the annoucement today of new optical transmitter products.
dodo 12/4/2012 | 10:50:53 PM
re: Nortel Shuts Optical Switch Effort Holly Molly

$ 1 B per day of M&A negotiation
optigirl 12/4/2012 | 10:50:53 PM
re: Nortel Shuts Optical Switch Effort Care to 'splain yo way out of this one??

;-)
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