Startup Simplifies Line Cards

What could prove to be a significant development in optical subsystems was announced today by Network Elements Inc. The startup unveiled what it claims is the industry's first 10 Gbit/s optical module to contain full multiprotocol processing capabilities (see Network Elements Unveils 'Lithium').

To build a line card today, systems integrators have to buy a bunch of different optical and electronic components and integrate them onto a board, says Bruce Murdoch, Network Elements' CEO. This takes time, especially since off-the-shelf parts aren't guaranteed to work together at first.

To speed up the process, it is now possible to buy optical transmitter or transceiver modules, rather than discrete components. These contain laser, modulator and driver chips, in the case of a transmitter (see, for example Agere Unveils 10-Gig Transmitter), and a preamplifier and detector as well, in the case of a transceiver.

Network Elements has taken the module idea one step further by integrating several additional pieces, says Murdoch. The module still occupies the same space as a standard 300-mm MSA (multisource agreement) transceiver, but also includes a physical layer (PHY) chip as well as protocol processing and monitoring for Sonet, packet over Sonet, and gigabit Ethernet. It's plug-and-play in the sense that there's no glue logic required on the line card, and it comes software-ready. In the first instance Network Elements is targeting short reach applications, which are the largest market.

The module is enabled by a multiprotocol chip that Network Elements announced back in May (see 10-Gigabit Convergence at Hand).

The upshot should be much faster time to market for Network Elements' customers. They should be able to get their hands on samples for $7000 apiece, starting in November, the company says.

"Once this product is in the market, there will be no faster way to build a 10-gig port," Murdoch claims.

In the end, chip vendors just won't be able to compete, he contends. They will be forced to sell chips to companies like Network Elements or to start developing modules as well. "We're the new distribution channel for chip makers," Murdoch suggests.

Network Elements' ultimate vision is to come up with a module that's a complete replacement for a line card. Is it madness, given the complexity and variety of the chips that currently go into a line card? It's too early to tell.

But the company is so confident that it will succeed that it's moving into larger quarters and hiring more people. It did make some layoffs recently, but only so it could replace those employees from among the glut of better-qualified jobseekers that are flooding the market right now, according to Murdoch.

Lisa Huff, components analyst with Communications Industry Researchers Inc. (CIR) thinks that systems integrators will buy into the idea. "They're already buying modules, just not as functional as Network Elements is making them," she says.

The only problem she sees is cost, particularly for Ethernet-only systems builders, who may not need the full protocol processing capability that the Lithium module offers. "$7000 isn't a big deal for long haul customers," she says. "But it will be for Ethernet equipment makers, who are used to paying $100 for a transceiver."

Murdoch is quick to point out that the module has other benefits besides price. For starters, it produces a huge amount of protocol information about what's going on inside the line card, information that can't be accessed with a less integrated product. This monitoring capability is supported by 20,000 lines of software code.

He also believes that the fact that the module could save a company six months to a year of development time has become much more important to customers in the current market downturn. "The time to market advantage is huge, especially at this time when companies are slimming down their engineering forces and trying to refocus their business models."

Last but not least, prices will come down when customers start buying in volume.

For the moment, Network Elements appears to have little competition. Agere Systems (NYSE: AGR), JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU), and Hitachi Ltd. (NYSE: HIT; Paris: PHA) also make modules, but their expertise is based on optics. They can't offer the protocol processing capabilities that Network Elements has developed in-house.

— Pauline Rigby, Senior Editor, Light Reading
http://www.lightreading.com