To cut a long story short, I couldn’t get the major nail manufacturers to talk to me and eventually I discovered why: I’d hit on a scoop. The price of nails was controlled by a global cartel that was under investigation by anti-trust authorities.
There isn't a Sonet/SDH chip cartel that we know of (yet). But the moral of this little anecdote – that boring sounding things sometimes are quite the reverse – applies to Sonet/SDH chipsets, the subject of a report by Simon Stanley published this month by Light Reading Insider, Light Reading’s subscription research service.
From some perspectives, it might be hard to get excited about the latest developments in merchant Sonet/SDH chipsets. After all, it’s all geeky stuff, isn’t it? You’ve probably heard enough about GFP (Generic Framing Procedure), VCAT (Virtual Concatenation), LCAS (Link Capacity Adjustment Scheme), and putting add/drop muxes or digital crossconnects or chipped beef on a chip.
However, you probably haven’t heard much at all about the impact of Sonet/SDH silicon developments on what’s happening to telecom infrastructure. I think it’s HUGE and far from boring. In fact, I’d go as far as to say that the advances in this field have probably had more impact than many of the more fashionable technologies such as Ethernet and Multiprotocol Label Switching (MPLS).
To see what I’m getting at, think back a few years. Not so long ago, the big Sonet/SDH equipment vendors invested enormous sums of money in the development of their own chipsets and sold the average Sonet/SDH multiplexer for corresponding wads of cash – hundreds of thousands of dollars in some cases.
Then along came semiconductor companies like PMC-Sierra Inc. (Nasdaq: PMCS) with off-the-shelf chips that changed the whole landscape. In the Light Reading Insider report, Stanley provides a detailed competitive analysis of no fewer than 30 Sonet/SDH chipsets from 10 vendors.
Competition among these vendors has driven chip prices down to an average of a few hundred dollars, and that's had a dramatic impact on Sonet/SDH equipment vendors. They’ve stopped developing their own silicon because they can’t come close to matching these prices with home-made stuff. In a growing number of cases, they’re outsourcing the design of the whole guts of their Sonet/SDH boxes – the combination of chips and software – to specialist companies such as Denmark’s Tpack A/S and the U.K.’s Murton Consultancy & Design Ltd..
I'm over-generalizing a bit here, according to Scott Clavenna, Heavy Reading chief analyst and author of a recent report on The Future of Sonet/SDH. "I think these new chips in many cases help data vendors more than they do traditional Sonet/SDH vendors," he says. "If you're building a new Sonet/SDH switch from scratch, there is still reason to spin your own ASIC to keep a competitive lead. Nortel did so with their OME 6500, and it bought them greater density and scale than they could find on the merchant market.
"All the same, it does illustrate a telecom product development trend that values software innovation above hardware innovation," adds Clavenna.
All of this has resulted in plummeting prices for Sonet/SDH equipment. Chris Murton, head of Murton Consultancy & Design and a regular moderator of Light Reading Webinars, says the price of an average Sonet/SDH multiplexer now costs in the "low thousands" of dollars.
And that’s only part of the story. All of chips in the Light Reading Insider report are also “next-generation” Sonet/SDH. In other words, they address the shortcomings that Sonet/SDH used to have when it came to handling data – furnishing the wrong size pipes, labor-intensive provisioning processes, and so on.
The latest developments take things a stage further on this front:
- The arrival of chips boasting “Transparent” as opposed to “Frame” GFP means that next-gen Sonet/SDH gear can now handle any protocol, not just Ethernet – which opens up big opportunities for carriers wanting to deploy storage services. Stanley names three vendors offering such chips in his report.
- Some of the latest Sonet/SDH mapper/framer chips, notably from Galazar Networks Inc. and TranSwitch Corp. (Nasdaq: TXCC), also support “Low Order” VCAT (see PMC, TranSwitch Get Edgy). This means they can provision channels in 1.5-Mbit/s chunks, rather than the 50-Mbit/s chunks of “High Order” VCAT. The arrival of these chips, at seriously low prices, has led to a spate of announcements of new “multiservice edge aggregation devices” that aim to extend carriers’ Sonet/SDH networks into customer sites. (For examples, see Marconi Scales Down Its Edge, Transmode Branches Out, and Telco Launches Sonet Gear.)
- Similarly, semiconductor vendors like Parama Networks Inc. and PMC-Sierra are putting digital crossconnects (DCS) onto low-cost chips, which is encouraging the development of other products. Seranoa Networks Inc., for instance, uses a little DCS chip to embed a crossconnect into its VPN aggregator, and Mangrove Systems Inc. is doing something similar with its data access box. (See Seranoa Tackles Backhaul Bandwidth and Mangrove CEO Goes Gaga Over GFP.)
So, have I made my case? Let’s take a little poll to see.
— Peter Heywood, Founding Editor, Light Reading
To subscribe to Light Reading Insider and get a copy of Simon Stanley's report – "Next-Gen Sonet/SDH Chip Survey" – please click here.