Allen, Texas-based Xtera Communications Inc. is going from helping DWDM systems vendors to squaring off against them. The company says it is now a systems company and will launch its Nu-Wave product at the Optical Fiber Communication Conference and Exhibit (OFC) trade show in March.

The Nu-Wave product is a system that can transmit 240 optical signals of 10 Gbit/s over 1500 kilometers without needing electrical regeneration, Xtera says (see Xtera Launches DWDM System).

As system vendors in the long-haul DWDM space, such as Latus Lightworks and OptiMight Communications, were going out of business, Xtera's pool of potential customers as a subsystems vendor has been thinning out.

Despite the fact that Xtera says its strategy shift required no additional funding and no significant changes in its management structure or sales force, the move invites skepticism. "When a company goes from being a subsystems vendor to a systems vendor, they should wonder why no systems vendor latched on to what they were selling in the first place," says Joe Miller, long-haul product marketing manager at Fujitsu Network Communications Inc. (FNC).

The company's old product -- the Xtera eXpander System -- was a DWDM system enhancer that vendors such as Nortel Networks Corp. (NYSE/Toronto: NT) and Ciena Corp. (Nasdaq: CIEN) could plug into the same rack as their existing equipment. Adding the eXpander would provide 96 extra 10-Gbit/s channels by tapping into the S-Band, a little-used portion of the optical spectrum (1480 to 1510 nanometers), Xtera claimed (see Raman Risks Emerge ).

Xtera's Nu-Wave system uses Raman amplification continuously over several bands of spectrum (from 1520 to 1620 nanometers), says Paul Harrison, Xtera's VP of marketing. This will save carriers money in the end, he says, because they won't have to do anything to the system itself to add capacity -- just add transponders on each end of a route. "The first channel on our system will cost you the same as it would on a C-band-only system, but we've got three times the bandwidth."

Xtera says it will demonstrate its product and provide more details at OFC in March. It hopes to have its box in trials with carriers during the months between March and July, the product's current general availability date.

With its old product, Xtera was in tests with two system vendors and one carrier, Harrison says. Despite the fact that several long-haul DWDM vendors got a look at its old product, Harrison says Xtera's new box has enough "secret sauce" to distinguish it from competitors and its old self.

"The basic technology is the same, but there is a difference in going from a discrete Raman amplifier to a full-blown system," he says.

Xtera announced its most recent funding round of $110 million in January 2001 (see Xtera's $110M Surprise).

— Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com