Telecom Exchange

I recently attended an event in New York City – Telecom Exchange. The format was originally developed by Hunter Newby and Rory Cutaia when they were at Telx. This year it was hosted by Jamie Scotto & Associates (JSA). Unlike most trade shows, this affair puts large and small companies on equal footing. In order to provide a “network-neutral” environment, JSA arranged the exhibit tables in alphabetical order and they were the same size with the same-sized branding. No giveaways were allowed at the tables. To be frank, to me it was a refreshing change. Instead of spotlighting the next new thing, the event forced you to focus on networking with industry players and real business opportunities.

Some of my thoughts from my meetings:

• Containerized/modularized data centers:  One prominent executive from a data center connectivity supplier said to me:  “Brick and mortar data centers are dead.” We only had a short time to expand on this comment, but what I think he meant was that data center operators will need to move to more modular solutions in order to lower their PUE. According to him, if you move all your high-density applications to a containerized solution, your PUE can be as low as 1.1, whereas, any traditional building would be hard to get below a PUE of 1.5. His premise is that companies will need to lower their total cost of ownership of their data center and therefore will move to these solutions or be out of business. He hasn’t convinced me yet, but I intend to do some more research on the subject.
• AlliedFiber (AF) and Dupont Fabros Technology (DFT):  Allied Fiber is known for connecting data centers nationwide, but has never connected the “last mile” into the facility. That has now changed. AF and Dupont Fabros have struck a deal for AF to connect into DFT’s Piscataway, New Jersey facility with a straight path to Chicago, bypassing Manhattan. The agreement gives AF access to DFTs underground fiber ducting and DFT access to AFs direct fiber link to Chicago, lowering latency for both providers.
• EtherCloud: Tinet, A Neutral Tandem Company, has now taken its Ethernet Exchange one step further. With its EtherCloud offering, it can provide end-to-end international connectivity to any company. It allows global coverage using VPLS through Juniper equipment in the core and Cisco in the access. Tinet is one of less than a handful of companies that can now provide direct Ethernet services on three continents.
• Global reach:  Telehouse America is known for its data center and managed services business in the US, but is quickly growing its reach internationally. It now has facilities on four continents – Asia, Europe, North America and Africa. Similar to Tinet, Telehouse is building out its Ethernet networks globally.

So what does all of this have to do with optical components? It shows that not only are there opportunities within the data center, but also new ones in the telecom/long haul market.

The VCSEL Advantage

There are basically two types of lasers used in fiber optic transmission systems today:  edge-emitters and surface emitters.  The most prevalent high-speed edge-emitters are FP and DFB.  The beam emission for these devices is parallel to the substrate.  In the case of VCSELs, the light is emitted vertical to the substrate.

Short-wavelength VCSELs have been a part of the optical networking world since Honeywell introduced them in the early 1990s.  The devices were adopted quickly to replace unreliable and costly CD lasers in the datacom market.  Due to their inherent low cost, low power and small size, VCSELs became the light source of choice in enterprise networks.  They are also credited with enabling Gigabit transmission in that space and are currently being used in over 90 percent of Fibre Channel and Ethernet transceivers.   By taking what was learned at 850 nm and extending it to 1310 and to 1550-nm wavelengths, companies are now starting to show that they can drastically reduce the cost and size of transmitters.

Historically, longer wavelengths of 1300 to 1700 nm have been more difficult to produce in the VCSEL construction, because of the refractive index of InGaAsP.  This material is generally used for edge-emitters in these wavelengths and does not change very much with composition, which makes it difficult to produce components.  But in the early 2000s, development of different combinations of III-V elements led to long-wavelength VCSELs.  Several manufacturers such as Bandwidth9 with its tunable, 1550-nm VCSEL;  Cielo Communications, E2O and Picolight with their  1310-nm VCSELs had proven that lasers supporting wavelengths higher than 980 nm were possible to produce in volume. In fact, before JDSU acquired Picolight, it had several multi-Gigabit transceivers it produced with 1310-nm VCSELs. JDSU has since discontinued that line and, it seems, its support of 1310-nm VCSELs.

Key advantages of the VCSEL at production-level include the following:

• High Yields. VCSELs can be processed with as many as 20,000 individual lasers on a three-inch wafer.  Even if 20 percent of these are lost due to processing yields (a high number by VCSEL manufacturers standards), this is still a far higher yield than their edge-emitting cousins.
• Testing at the Wafer Level.  VCSELs can be tested before the wafer is diced.  Most edge-emitting lasers (FPs and DFBs) must be cleaved from the wafer and packaged before they can be tested, and are therefore tested individually, which increases processing costs and decreases yields significantly
• Easier Coupling and Packaging.  Another important advantage of the VCSEL structure is that its circular cross-section gives better control over beam size and divergence than for edge-emitters, allowing for much easier coupling of the fiber to the VCSEL output and easier alignment during packaging.

Table I shows a comparison of FP, DFB and VCSEL solutions, an availability status, and a list of some of the component manufacturers.

 

Table I:  Comparison of  VCSEL, FP and DFB Technologies
Attribute	VCSEL	FP	DFB
Cost	Low	High
Optical Output Power
Power Consumption
Size	Small (vertical construction)	Large (planar construction)
Mode Stability	Good	Fair
Testing	On chip	Packaged assembly
Manufacturing	Easy (20, 000 devices on 3 inch wafer)	Difficult
Packaging	Easy
Coupling to Fiber	Efficient	Inefficient
Modulation	Direct up to 12 Gbps	Direct only up to 2.5 Gbps then must be external
Drive circuitry	Simple	Complicated
Monolithic Integration	With receiver and electronic driver components	With other optical components
Suppliers	850 nm:  Agilent, Aerius Photonics, Applied Optoelectronics, Inc., Oclaro, Optowell, Emcore, EpiWorks, FCI/MergeOptics, Finisar, JDSU, Raycan, TE Connectivity, VI Systems 1310 nm:  Alight Technologies, Beam Express, JDSU, Raycan, Vertilas, VI Systems 1550 nm:  Raycan, Princeton Optronics, Vertilas	Agilent, Excelight, Finisar, JDSU, Modulight, Oclaro, OpNext	Agilent, Bookham,  JDSU, Excelight, Finisar, Fujitsu, Oclaro, OpNext

Long-wavelength VCSELs have started to emerge again mainly due to some new process technologies now being leveraged. Two companies stand out to me with their technology developments of long-wavelength VCSELs – Vertilas and VI Systems.

Infinera and the Dawn of Terabit Networks

At OFC, I sat in on an Infinera press conference and I have to say I was impressed. Of course, I’ve always been impressed with Infinera’s PIC technology, but they seem to have now taken it to an entirely different level. Its new PICs incorporate 5x100G devices and over 600 functions on two chips and on the horizon are 10x100G PICs with perhaps more than 1,000 functions.

Infinera has long stood out in the telecom industry because while it is an equipment manufacturer, its base technology is routed in optical components research and development. This used to be the case for all telecom OEMs including Alcatel, Lucent and Nortel, but all of these companies shed their components development arms in the early 2000s, and of course Alcatel and Lucent are now merged and Nortel is a shell of its former self. Through all of this, Infinera has prospered by successfully leveraging its component expertise to sell its CWDM and DWDM products and innovate to produce new ones.

Infinera had 10x10G, or 100G, long before many of its competitors and now has 5x100G PICs that it expects to have in production before year’s end. In fact, this technology was recently demonstrated in a live network trial with Interoute in Europe. Interoute expects to deploy Infinera’s 500G solution in 2012.

Infinera is focused on $/Gigabit economics and believes in order to maximize this for long haul applications, systems must be multi-channel and monolithic. This is achieved by large scale integration of both active and passive components which has been Infinera’s strength for 10G and below technologies. For 100G, the company has introduced “FlexCoherent®” technology that allows the customer to choose what type of modulation scheme is needed for each of their routes. It is also focused on providing its customers not only ROADMs, but what it calls “flex channels.” Infinera has deemed this technology as “Optical Express,” where intelligence is distributed to every node so each bit can be read.

But Infinera would not have been as successful as it has been if it was just focused on the research and development. Manufacturing of these devices must be reliable and repeatable so, according to its senior management personnel, its engineers “design with manufacturing in mind.”

The next step of development is already underway and will produce a 10x100G product in the near future according to Infinera.

What puzzles me is why other OEMs have not been able to reproduce the results that we’ve seen from Infinera. Is it only the captive components R&D that sets Infinera apart or is it also the fact that its top management has the ability to bridge the business aspects of telecommunications equipment manufacturing with the highly technical world of optical components and networking? I believe it’s both of these along with the fact that Infinera is still a much smaller company than most of its long-haul competitors and can make decisions and move much more quickly. Infinera is a company to watch especially related to long-haul and metro connections of data centers.

Avago’s Interesting Demos at OFC/NFOEC

As always, the top transceiver manufacturers were represented at OFC, but of the top three datacom transceiver providers, Avago Technologies stood out to me. They had two significant demonstrations:

1. Connecting a 40GBASE-SR4 Ethernet port using its QSFP+ to four standard 10GBASE-SR Ethernet ports with its SFP+ modules. On the surface, this seems pretty easy to do, until you realize that the specifications for the transmitters and receivers in these devices have are very different. The 10G devices could easily overpower the 40G receiver if it’s not designed to handle the higher power. Avago has solved this issue with its parts and hopes to be able to be interoperable with anyone’s transceivers in the near future.
2. A VCSEL-based 25G short-wavelength SFP+ working prototype. At first I was puzzled about this because I couldn’t figure out the application. Well, it turns out there really is none for the 25G part, yet, but showing that it could be done makes you realize that 32G Fibre Channel applications using the SFP+ may not be as far-fetched as we think. And, perhaps we can get a 100GBASE-SR4 (4x25G that isn't in the IEEE standard yet) solution soon.

Stay tuned for more on other developments announced or demonstrated at OFC/NFOEC.

Thoughts on OFC/NFOEC

I’ve never been enamored with Los Angeles, but when OFC/NFOEC decides to go there, I really have no choice but to follow them. OFC/NFOEC is the premier optical components conference and is starting to move its way up the food chain again. Those of us who have been in the industry since before 2000 know that equipment manufacturers and service providers were regularly a part of OFC. But after 2000, this changed and the optical value chain was split – components relegated to OFC and/or NFOEC (until they combined into one), equipment manufacturers concentrating on Interop and Supercom and service providers opting for Supercom. Now, Supercom has closed its doors and Interop has become more and more software-centric. So both OEMs and service providers are looking for a trade show of value and they may have found it in OFC/NFOEC.

Notable communications equipment OFC/NFOEC exhibitors this year were ADVA, Ciena, Cisco, Fujitsu, Hitachi, Huawei, Infinera, Juniper, Mellanox Technolgies, Nokia Siemens Networks and Optelian. Many others gave speeches including Alcatel-Lucent, ADVA, Brocade, Ciena, Cisco, Cray, Force10 Networks, Fujitsu, Hewlett Packard, IBM, Infinera, Juniper, Nokia Siemens Networks and SunLabs/Oracle. Service providers participated by way of technical and business presentations as well – among them were AT&T, Deutsche Telecom, NTT and Verizon.

End users of networking equipment even showed up – NYSE Euronext, USA provided the plenary speaker for the Service Provider Summit and Facebook and Google again told us how much more bandwidth they need – Terabit Ethernet. There was an entire afternoon dedicated to large data center business issues at The Optical Business Forum, which included speakers from Abovenet, Allied Fiber, CENX, Equinix, Juniper, PacketExchange, Verizon, XO Communications Zayo Bandwidth and Zayo Networks.

So this seems to be a transition year for OFC/NFOEC where it has started to include more practical programming to expand its audience into data communications, data centers and up the value chain with equipment manufacturers and service providers. It appears to be working too, because the attendance was up by all accounts.

I’ll review some exciting new developments by systems and components suppliers in future posts.

OFC/NFOEC Data Center Cabling Short Course (SC358)

I'm headed to LA next week for OFC/NFOEC and my first order of business will be to teach a short course on transitioning your data center from copper to fiber. Here's a short description of what I'll discuss:

This short course is intended to help data center and network managers understand the value proposition of an all-optical data center. Topics that will be discussed include looking at basic data center network infrastructure design and hardware needs.  The course was developed with the TIA-942, Telecommunications Infrastructure Standard for Data Centers in mind, but will also address the fact that many data centers really have not used this standard in practice. Networking standards such as IEEE 802.3, Fibre Channel, iSCSI and InfinBand will be reviewed along with their applicability to certain aspects of the data center. Technology roadmaps and data center networking trends will be included as well as how to handle transitioning from lower to higher data rates within your data center. When it makes sense to implement fiber optics and what types of transceivers and cabling should be used for different scenarios will be presented. Other technologies such as Fibre Channel over Ethernet, RDMA (InfiniBand) over Converged Ethernet, IO virtualization and how virtualization and network consolidation will affect data rates will also be discussed. Detailed cost analysis of fiber versus copper in the data center will be presented considering not only equipment and infrastructure cost, but port and cabling density, power and cooling costs.  Also included will be analysis of whether it matters what vertical market a data center supports – for example, does a financial sector data center have different requirements than a higher-education data center? Several real-world case studies will be presented.

Hope to see you there.

The Ethernet Technology Summit and OFC/NFOEC 2011

The next few weeks I’ll be very busy. First I’ll be chairing Session 105 (Ethernet Chipsets/Components) at the Ethernet Technology Summit. While most of the conference is about R&D projects, I’ve chosen to focus my short presentation on current opportunities for components suppliers. You'll be able to download the presentation from my Web site soon.

In March, I’ll be heading to OFC/NFOEC 2011. There I have three different sessions I’m involved in. My short course on “Data Center Cabling – Transitioning from Copper to Fiber” will be held Monday morning. A short excerpt of this short course can be accessed through an archived Webinar I did recently. Monday afternoon I’ll be participating in the Computercom Symposium by presenting “The State of the Short-Reach Optics Market.” On Tuesday, the kick-off of the Optical Business Forum (see previous post for details) will take place where I’ll be moderating the Carrier Ethernet Exchanges session.

Hope to see you in Santa Clara this week or Los Angeles the week of March 7th.

Bringing the Optical Networking Supply Chain Back Together: The Optical Business Forum at OFC/NFOEC

As the networking equipment supply chain has broken up into intellectual property suppliers, semiconductor suppliers, optical component manufacturers, and full system manufacturers, telecom carriers are often 2-4 steps away from the technologies that can alter the economics of running their networks. This was not the case ten years ago during OFC's peak attendance years when many equipment vendors still owned components divisions. Yet as the large carriers turn to business accounts to cover the costs of expanding their optical networks and increasingly depend on technologies from their suppliers' supplier's suppliers, there has been no central trade event where they can gather to meet with this expanding set of companies entering their networks, or to examine the latest advances in optical technologies. OFC/NFOEC has seized the opportunity to bring the telecom supply chain back together to serve the community with much greater depth than any other show. It now has The Optical Business Forum.

Major telecom providers are in significant competition with each other for large business accounts. With wireless taking up a greater share of telephony revenue, and households having limited budgets to spend on service regardless of bandwidth offered, service providers see their future lying with the business customer. While they do not publicize much of their activity with commercial accounts due to regulatory pressure, businesses are a major factor behind carriers expanding the capacity of their optical networks.

Verizon's sale of its northern New England and West Virginia lines was carried out because of the limited base of commercial accounts in those regions. AT&T built nine 40-Gigabit MPLS nodes outside of its incumbent territory, where it does not offer U-Verse or any video service, in order to increase capacity for its corporate data and IP/VPN customers. It has kept quiet in the press regarding this upgrade, in spite of tens of millions invested. In an addition to corporations continuing to make heavy investments in bandwidth, carrier IP cores are carrying more traffic, with Petabytes transferred still growing 30 to 40% a year. And in order to maintain their dividends, as well as their returns on capital investments, carriers need revenue from the high margin, high budget business customer.

The Optical Business Forum was developed by analysts associated with DataCenterStocks.com. It is the first forum in what we’re hoping to be a yearly affair covering the most important topics in the area of optical transport for businesses data communications. This year’s summit is on the exhibit floor and consists of a key note address on High-Bandwidth Ethernet Services given by Rajiv Datta, Senior Vice President and Chief Technology Officer of AboveNet Inc. Following the keynote are three focused sessions:

1. Who is Buying Optical Bandwidth Services?
2. The Economics & Business Case for Connecting Data Centers
3. Carrier Ethernet Exchanges

The program includes speakers from AboveNet, Allied Fiber, CENX, Equinix, Juniper Networks, Packet Exchange, Telx Ethernet Exchange, Verizon Digital Media Services, XO Communications, Zayo Fiber Solutions and zColo. Moderators include Craig Clausen from NPRG, Michael Howard from Infonetics and myself.

Join us at OFC/NFOEC and hear what you’re customers’ customers are saying.

Optical Interconnection Players Strengthening Their Businesses

Molex just purchased Luxtera’s AOC business completing the circle that all the other optical interconnect players started. During the telecom bust in the early 2000’s, Amphenol, FCI, Molex and Tyco Electronics all either de-emphasized their optical interconnect businesses or exited them all together. Now, they have all re-entered. Why?

While they are all working on more high-speed copper solutions like the one Tyco showed for 25G and beyond at SC10, I beleive they also see the writing on the wall. While they won’t admit it, I think they know that beyond 100G copper cable interconnects may have FINALLY reached the end of their useful life. At 40G and 100G, for example, there is still no twisted-pair solution and the direct-attach copper can only reach about 7m reliably.

It has been interesting watching the choices these traditional connector companies have made:

• Amphenol: It never exited the optical interconnect business, but left the transceiver products to Avago, Finisar, JDSU and others until recently. It has a stronghold on the short-reach copper direct-attach market so has inroads at customers for its AOCs and modules.
• FCI: Exited the optics business entirely for a few years but then started again from scratch and subsequently purchased MergeOptics in February 2010. MergeOptics is what was left of Infineon Technologies and still has strong technical abilities in short-reach products. It also has the building blocks to provide all-optical interconnects all the way from the chip (see my previous posts on MergeOptics). They can provide both AOCs and transceiver modules so have the ability to cover all high-speed markets in InfiniBand, Ethernet and Fibre Channel.
• Molex: Purchased Luxtera’s AOC business recently. So while FCI and Tyco are stressing short-wavelength technologies, Molex has turned to custom long-wavelength ones. Luxtera’s technology is based on 1490nm devices, which really doesn’t matter if you’re purchasing an AOC, but will matter if you want transceiver modules. According to company representatives, they will eventually get back into supplying transceiver modules, but there has been no evidence of this as of yet. Perhaps the possession of Luxtera AOCs will prompt this.
• Tyco Electronics: Tyco exited the transceiver business in the early 2000’s, but still had a very active fiber-optic interconnect business – especially for premise wiring (AMP NETCONNECT). It acquired Zarlink Semiconductor’s optical products group in May 2010. Zarlink is on the forefront of parallel-optics technology and was one of the first to introduce AOCs. It does not appear that Tyco intends to supply optical transceiver modules again.

I would never bet against copper re-inventing itself in order to meet the demands of future high-speed networks, but with optical 10G dominating the market currently and 40/100G optical products starting to emerge, it will be an uphill battle for copper solutions to gain traction. And beyond 100G, all bets are off. I’m thinking that these companies are reaching the same conclusions and that if they don’t add optical capabilities soon, they may render themselves obsolete within the next ten years or so. That's not to say that there won't be a vibrant businesses in both copper structured cabling and interconnects over the next ten years - there will be. But I think that R&D dollars will be better spent on optical interconnect technologies rather than trying to figure out how to run 25G signals using copper interconnects (including backplanes.) Or how to convince end-user customers in the US that a shielded structured cabling solution for 40G is better than a short-reach optical one because it will be cheaper - but at what cost to power, cooling and space?

What do you think? I'd love to hear your thoughts.