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DWDM

Infinera Talks Metro, 40-Gig

Surprise! Infinera Corp. (Nasdaq: INFN) is shipping metro gear.

After more than a year of dodging and strong-arming questions about the metro ("Are we there yet? Are we there yet?"), Infinera slipped a Securities and Exchange Commission (SEC) 8-K form under the door this morning to tell the world it's got a metro box.

Infinera's claim to fame until now, the DTN, is a long-haul DWDM box. Since last summer, executives have acknowledged that they want to expand into the metro market. (See Infinera Surprises, Targets Metro Access, Metro Move for Infinera?, Infinera Numbers, and Infinera's Metro Expansion.)

Infinera started shipping the metro product in August, the filing says. The company plans to show off the box at Supercomm next month.

The filing also says Infinera expects to have its 40-Gbit/s photonic integrated circuit (PIC) in-house by the end of the year. That's a less long-awaited development, but it could be more important. Infinera's lack of a 40 Gbit/s appears to be the reason why Level 3 Communications Inc. (NYSE: LVLT), Infinera's earliest supporter, defected to Huawei Technologies Co. Ltd. for a recent optical deal. (See Is Huawei in at Level 3? and Infinera's Smoking Gun.)

The new PIC can carry 10 lanes of 40-Gbit/s traffic; Infinera's current PICs do 10 lanes of 10-Gbit/s traffic.

Finally, the filing says Telefónica SA (NYSE: TEF) is an Infinera customer, adding another big-name carrier to the company's roster. Telefonica is using the DTN for submarine as well as terrestrial links.

Submarine contracts tend to arrive in clumps separated by very long intervals, so Infinera is making a push to get its share while the business is out there. (See Infinera Goes Underwater.) As for why Infinera is suddenly blabbing all this, the 8-K simply notes that it's what the company will be saying "at meetings with investors this week."

— Craig Matsumoto, West Coast Editor, Light Reading

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Pete Baldwin 12/5/2012 | 3:56:33 PM
re: Infinera Talks Metro, 40-Gig

I worded the part about the 400G thing badly -- infinera is going to have the 10x40 PIC in house by the end of the year; anything systems-level that uses it won't be developed until later.  Altered the wording accordingly.


It could be a while, then before Infinera gets 40G out to the market.  Huawei probably likes the sound of that.

ninjaturtle 12/5/2012 | 3:56:30 PM
re: Infinera Talks Metro, 40-Gig

Craig, have you seen the Huawei 40G product. If you listen to the Conference today the 40G that INFN is working on is PIC based. Huawei's is not. The economic crossover point is not there yet so as a result I don't see a lot of carriers switching to 40G based off the shelf commercially available component product. When INFN does release the PIC 40G the market place will consider it as much or more disruptive then the current INFN 10G product. So I really don't think Huawei is looking at 40G as a huge revenue generator. But you can be rest assured they are selling it for less then production costs based on the component costs alone. But with the Chinese government making them whole China in general will continue to dump any product onto our shores at low ball prices. Level 3 bought it because they need cheap product to survive and hopefully grow. Most large NA carriers will not turn to Huawei for their system critical data transmission. JMHO.

 


 

^Eagle^ 12/5/2012 | 3:56:29 PM
re: Infinera Talks Metro, 40-Gig

Ninja... you need to get a bit better informed.


The carrier switch over to 40G in the core started a few years ago now.  It is accelarating.


IFN has missed wave 1 of 40G.  wave 2 of 40G.  and is in the middle of missing wave 3 of 40G.  


really, all the major worldwide carriers are already WELL into their 40g upgrades and the platforms pretty much decided.  IFN is pretty late to this party.


2nd, don't believe the PIC has as many advantages on cost as you believe.  Ever hear of yields?  I could educate you, but don't think I really want to.  This is too humorous.


Finally, parallel can never really compete with Serial for many reasons, both performance (routing and transporting those bits as efficiently and effectively as possible) and price.  IFN is fundamentally a parallel play with interesting packaging abilities.  


by the time IFN gets their 40G per lambda product really shipping, the majors will be already in trials of 100G per lambda with other suppliers.  It comes down to cost per bit per km.  So far, IFN only wins in certain niches, where there is a predominance of lots of links being added and dropped digitally.  Even the carriers they win at, continue to spend more with other suppliers than they do with IFN.  They are not the dominate supplier really in ANY major global account.  In much the same way SBC used to buy channel banks and CSU / DSU from smaller players for various niche applications, but still bought the big iron from Alcatel, Lucent, Nortel, and now Huawei... Same is true of optical transport.


Maybe, IFN will be able to cross over as to critical to carriers to fail scale and the ability to really build a coast to coast network, including transport, switching, routing, access and billing.... but until then, they are a niche player.  A reasonably successful one so far, given they raised over 350M... .but still a Niche player.  this is not bad.  It is just not so far the "holy grail" that some of you pumpers try to make it out to be.


sailboat

mgardner750 12/5/2012 | 3:56:27 PM
re: Infinera Talks Metro, 40-Gig

&lt;!--/*styledefinitions*/p.msonormal,li.msonormal,div.msonormal{mso-style-parent:"";margin:0pt;margin-bottom:.0001pt;mso-pagination:widow-orphan;font-size:12.0pt;font-family:"timesnewroman";mso-fareast-font-family:"timesnewroman";}@pagesection1{size:612.0pt792.0pt;margin:72.0pt90.0pt72.0pt90.0pt;mso-header-margin:36.0pt;mso-footer-margin:36.0pt;mso-paper-source:0;}div.section1{page:section1;}--&gt;<pclass="msonormal">i&rsquo;vealwaysbeenamazedattheireinfinerageneratesfromsomereadersoflrarticles.</pclass="msonormal">
<pclass="msonormal">&nbsp;

<pclass="msonormal">goingbacktocommentspostedseveralyearsagoyouwouldhavethoughtthatpicfabyieldswerenexttozeroandburnratewouldexhaustanycashreservesbynextquarter.atypicalnegativepostcommentsonthelargeamountofmoneyraisedandcallsanypositivecommenteranemployeeorinvestor.

<pclass="msonormal">&nbsp;

<pclass="msonormal">asneitheraninvestornoranemployeeifinditamusingtoreadthecommentsfromtheselfproclaimedinfinera/opticalmarketexpert&rsquo;spredictionsofinfinera&rsquo;supcomingfailureyearafteryear.fearlesslytheykeeprepeatingtheirmantraofthepicwillfailanddoomanyinvestortothesamefateassiliconvalleyhomeprices.theyhopeastheyrepeattheirpredicationsyearafteryearthateventuallytheywillbecorrect.

<pclass="msonormal">&nbsp;

<pclass="msonormal">ontheothersideyouhaveafewfaithfulpicbelieverswhosticktheirheadsupfromtimetotimetofacethewrathoftheunbelievers.whilethepicfollowersseemtolosethediscussiononthelrboards,infineraseemstobedoingwellenoughinatoughmarketplacetothecontinuedfrustrationoftheunbelievers.



</pclass="msonormal"></pclass="msonormal"></pclass="msonormal"></pclass="msonormal"></pclass="msonormal"></pclass="msonormal">
ninjaturtle 12/5/2012 | 3:56:27 PM
re: Infinera Talks Metro, 40-Gig

I am&nbsp;very familiar with yields.


From a DWDM point of view 40G has not been widely adapted and cost is the reason. I won't argue with your statement since you believe what you believe. However, INFN is not suffering from the 40G timeline as you note and when it is released it will as disruptive as the 10G product was in 04'. I don't think there are&nbsp;too many companies out there that have a plan to do a PIC anytime soon and if they did it wouldn't be in a system. Try to put 200 components on a chip and have ir work in a system. To this day people can't believe how it is done. To the guys at INFN this is old hat and I believe the systems guys will have this released sooner rather then later.

Pete Baldwin 12/5/2012 | 3:56:27 PM
re: Infinera Talks Metro, 40-Gig

Polar seems to have encountered a space-bar glitch, or possibly gone into Rain Man mode.&nbsp; :)


I'm reparsing his comment here... Note that THESE ARE POLAR'S WORDS, not mine.


&gt;&gt;&gt;&gt;&gt;


going back to comments posted several years ago you would have thought that pic fab yields were next to zero and burn rate would exhaust any cash reserves by next quarter.&nbsp; a typical negative post comments on the large amount of money raised and calls any positive commenter an employee or investor.


&nbsp;as neither an investor nor an employee i find it amusing to read the comments from the self proclaimed infinera/optical market expert&rsquo;s predictions of infinera&rsquo;s upcoming failure year after year.&nbsp; fearlessly they keep repeating their mantra of the pic will fail and doom any investor to the same fate as silicon valley home prices. they hope as they repeat their predications year after year that eventually they will be correct.&nbsp;on the other side you have a few faithful pic believers who stick their heads up from time to time to face the wrath of the unbelievers


&lt;&lt;&lt;&lt;&lt;



(I had an amusing moment trying to figure out where the spaces were supposed to go in "fate as silicon valley.")

^Eagle^ 12/5/2012 | 3:56:26 PM
re: Infinera Talks Metro, 40-Gig

ninja ninja ninja.... roflmao....


Disruptive? &nbsp;So far the jury is still out on that. &nbsp;the affect of IFN on the revenues of other players is negligible compared to the bigger macro forces of the competition being waged between regions: China vs Japan vs "the west" &nbsp;(ALU, NSN, Ericsson - Marconi)


IFN while a success is not the "game changer" their press would like everyone to believe.


While a success is worth noting and acknowledging.. and I truly give take my hat off to IFN on that success.. and also their prowess in marketing and image management. &nbsp;Truly top notch.


I applaud the success. &nbsp;But do not believe they are the next coming of "dwdm" or TCP/IP or SONET, or really any major overwhelming change blowing across the network.


Yes, a successful niche player. &nbsp;But only that. &nbsp;Maybe, just maybe they will morph into a Cisco... but they could also become a "WellFleet" just as easily. &nbsp;


While they do have a PIC, believe me, the technology lead is not as large as many would have you believe. &nbsp;Nor is the barrier to entry as high as you and many others would like to believe. &nbsp;Believe me, there are lots of people out there that know how it is done and how to do it. &nbsp;IF this IFN approach were truly remaking the network, end to end, and truly that disruptive, you would see all the top systems vendors jumping into this way to address the application. &nbsp;Just like you saw when DWDM first popped up. &nbsp;


Again, I do not begrudge them success. &nbsp;In fact I hope they can actually live up to the hype. &nbsp;It would bouy the entire market and give lots of people hope and get me a bit oer my cynicism. &nbsp;


True disruption would mean that all the application space dramatically and radically and quickly shifted over to this kind of platform. &nbsp;While IFN has a very nice box and fills some niches well, they are not yet a transformative company with truly market shifting technology. &nbsp;Not yet.&nbsp;


Time will tell. &nbsp;


And while you may not believe it, 40G deployments on DWDM are WELL underway. &nbsp;and have been for sometime. &nbsp;The highest volume 40G deployments to date are all over DWDM! &nbsp;The entire Verizon, Qwest, Telstra, DT, BT, NTT, ATT, Comcast, FT, et al are all in the process of or have already done DWDM 40G network wide.. across DWDM. &nbsp;This is accelerating with 3rd and 4th generation 40G solutions that are much more cost effective.


Stay tuned over the next couple years. &nbsp;


sailboat

paolo.franzoi 12/5/2012 | 3:56:25 PM
re: Infinera Talks Metro, 40-Gig

ninja,


Just a quick question.&nbsp; If Infinera was so disruptive, why are they a bit player in the market?&nbsp; Not trying to make light of a startup that has gotten to public company status and makes good revenue, but they are a bit player in the optical business.&nbsp; Think about the number of companies out there:&nbsp; Fujitsu, Nortel, Alcatel, Adva, Ciena Tellabs, Huawei, Ericsson, NSN, ya da ya da ya da.&nbsp; Infinera represents what less than 10% of the market?&nbsp;


I am quite surprised about your commentary on 40G.&nbsp; Your comment is that the Tier 1 operators have not generally selected equipment for their 40G networks.&nbsp; That is different than saying they have started broad and general deployments.&nbsp; Given the time to operationalize a new technology, there is a gap between product selection and broad deployment.&nbsp; Missing the product selection is a huge problem if you are late to the market as I see fewer vendor replacements and alternate selections occuring in the future.


seven

HomerJ 12/5/2012 | 3:56:24 PM
re: Infinera Talks Metro, 40-Gig Infinera's General Tao chicken does not impress me.
ninjaturtle 12/5/2012 | 3:56:23 PM
re: Infinera Talks Metro, 40-Gig

I don't believe INFN ever claimed to want to be a Fujitsu, Nortel, Alcatel, Adva, Ciena Tellabs, Huawei, Ericsson, NSN, ya da ya da ya da.&nbsp;However, they probably beat out most of them on the deal with Telefonica.


A so called niche player is not a bad thing. At current annual revs of ~ $350-400M it wouldn't take much for them to be over $1B in the next 24 months. That would exceed CIEN which you claim to be among the the BIG players. They are not BIG, they have just&nbsp;been around for a while and living mostly off of Core Director revenue thanks to Lightera, another Jagdeep &amp; Co. disruptive technology.


In any case time will tell how well INFN will grow&nbsp;but I would not bet aganist them and I don't think the competition is ignoring them.


Chao

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