Having tantalized with its 100G metro aggregation talk for so long, Infinera finally put the market out of its misery Tuesday with the launch of its new, home-grown high-capacity metro transport products that, the vendor believes, will play a key role in meeting the future needs of network operators. (See Infinera Adds Metro Products, Unifies Portfolio.)
Just as importantly, though, the company further embraced and integrated the product portfolio brought on board as part of the acquisition of Transmode in order to offer up a far more complete family of products to meet a variety of operator needs. (See Infinera-Transmode Closing Imminent; Karl's in Charge... of Metro and Infinera Makes $350M Offer for Sweden's Transmode.)
First, the new 100G product.
Infinera Corp. (Nasdaq: INFN) has been laying the ground for its entry into the regular 100G market for some time, but took the strategic decision to focus initially on the specific requirements of the data center interconnect (DCI) market with the launch of its Cloud Xpress platform a year ago. (See Infinera Targets Data Center Connectivity Market With Metro Platform.)
Even then the company's CEO, Tom Fallon, noted that the vendor saw two very distinct metro market opportunities, starting with DCI and followed by metro aggregation, with that market set to take off in late 2015 and 2016. "We'll be taking the full functionality of the [100G] DTN-X and putting it into metro form factor," said Fallon in September 2014.
Fallon and his fellow Infinerans (yeah, I know… humor me!) stuck with that plan. Earlier this year the company launched two new photonic integrated circuits (PICs) designed with the metro aggregation market in mind -- see Infinera Asks: Hungry for a Slice of Photonics? -- and has now followed up with the appropriate "small footprint" and "low power" system-level products, the DTN-X XTC-2 (12 rack units high) and XTC-2E (which has additional slots for ROADMs, so it's a bit bigger than its sibling at 15RU).
Given the build-up to this launch and the fact that this move has long been on Infinera's public roadmap, no one is fainting with shock at the announcement (that we know of). "This is a reasonable plan to extend the long haul-centric DTN-X down into regional and metro core networks," notes Heavy Reading senior analyst Sterling Perrin, who did not need any smelling salts as he shared his views.
So far, so good. But that's just part of the story, because, as Perrin points out, Infinera now has some options for network operators wanting to build out capacity in their metro networks: While demand for 100G might be about to start growing, it's far from denting demand for 10Gbit/s metro systems just yet.
In addition, Infinera has traditionally been a "PIC shop," touting PIC technology as the best option for optical transport. Now, though, it is also pitching the Transmode TM-Series portfolio, which is not PIC-based.
"The challenge facing Infinera is that it now has two separate approaches to the metro market, both of which can do 100G. It has the DTN-X extension line [the new XTC products] and the Transmode products. In Heavy Reading's view, the bigger opportunity, by far, will be the Transmode products, which address the full range of metro aggregation and metro core applications … The DTN-X extension products are more of point products for specific applications for DTN-X customers."
So Infinera has the market covered, notes Perrin, but it will need to be very clear about what fits in where and how. "If you also add in the Cloud Xpress for DCI, Infinera has quickly put together a very broad set of products to tackle the metro market. It can address 100G, but the majority of metro will not be 100G … [but] it can address sub-100G as well," thanks to the Transmode acquisition. "Infinera will need to hone its marketing messages around 'PIC vs. non-PIC' benefits," following years of "telling customers that everyone needs PICs," adds the Heavy Reading analyst.
Let's get unified
In addition to the new metro aggregation systems, Infinera has also been working on the tighter integration of the Transmode products with its flagship long-haul DTN-X platform: It has developed hardware modules that enable direct 100G WDM line-side interworking between the DTN-X and the TM-Series platform and software capabilities that enable unified end-to-end management across the various products.
The company also launched a new member of the long-haul DTN-X portfolio, the XT-500, a stackable two-rack unit system designed for the speedy deployment of "high bandwidth long-haul data center interconnection." So, essentially, it is a long-haul version of the Cloud Xpress.
In a short space of time, Infinera has expanded its portfolio dramatically, while growing its revenues from its traditional market. About a year ago it was a well-regarded long-distance transport system company that, in public and private (network operator discussions with Light Reading), generates very positive feedback from its customers. At that time its "total addressable market" -- basically the annual value of the long-distance optical equipment market -- was about $5 billion. (See Infinera Wallops Q2 Guesses, Reassures on Transmode Deal.)
The new product launches -- Cloud Xpress and the news metro and long-distance systems -- plus the acquisition of Transmode has, according to Infinera, vastly expanded its revenue opportunities: Based on market projections from IHS Inc. , Infinera believes the value of its total addressable market by 2019 will be $15 billion.
Of course it faces stiff competition from the likes of Alcatel-Lucent, Cisco, Ciena, Coriant, Huawei and many others, but the company has a track record of achieving its goals in terms of products and delivering what customers want, and the leap into the full breadth of the metro market will give it plenty of opportunities to sell metro transport products to its existing long-haul customer base.
One experienced market analyst, Mike Genovese at MKM Partners , believes Infinera could increase its revenues from about $880 million this year to almost $1.16 billion in 2016.
— Ray Le Maistre, , Editor-in-Chief, Light Reading