Wu-Fu Chen: In It for the Long Haul
"[Ultra-long-haul products] reduce the cost of building core optical service provider networks by between 60 and 80 percent by reducing the need to install signal regeneration equipment," he said. He added that this market was less crowded than some others, due to its complexity.
Companies playing in this area include Corvis Corp. (Nasdaq: CORV), OptiMight Communications Inc. (a Wu-Fu Chen company), and Qtera (which was bought by Nortel Networks Inc. [NYSE, TSE: NT]).
Chen was also bullish on the long-term prospects for Sonet technology in metro networks. "Anyone who's been in telecoms for a while knows that it takes a long time for an industry to adopt a new technology, and it takes a long time to get rid of a technology that has been installed," he said.
However, he also predicted a shakeout in the Sonet market. "There are too many companies going after the same space. Not everyone will make it." He added that the best way to work out who would succeed and who would fail is to "look at the team behind it."
Chen was optimistic about revenues from optical networking, predicting 100 percent consecutive annual growth rates in key areas like switching "for the next several years."
He also dismissed fears that the bubble was set to burst on the sky-high valuations of optical networking companies like Corvis, Juniper Networks Inc. (Nasdaq: JNPR), and Sycamore Networks Inc. (Nasdaq: SCMR). "People say that valuations are too high. Yes, but they will get higher."
Concluding his speech, Chen predicted that the optical networking market would continue to mint new billionaires. "In the old days people said, 'We make money the old-fashioned way; we earn it.' But in optical networking we say, 'We make money the new-fashioned way -- we print it!'"
-- Stephen Saunders, US Editor, Light Reading, (http://www.lightreading.com)