"Technology giants like Google Inc. and Facebook Inc. are expanding efforts to control more of the world's Internet backbone, raising tensions with telecom companies over who runs the Web."
The article cited Amazon, as well.
Hope Infinera can help these content kings accelerate the build out of their own 100G backbones and perhaps force the RBOC's hands in doing same with the DTN-X. If you can't get the phone and cable companies to do it, do it yourself, as with Internet2... although most of that went to Ciena when the DTN-X was still gestating.
Come on Level3, XO, CenturyLink, Verizon, ATT, Sprint. Let's all do this DTN-X thing.
Seems like once their signal processing and switching designs have been proven out and matured on FPGA's for the first few blocks of production DLM's, Infinera can lock in the design onto ASIC's and gain an immediate reduction in cost and jump in speed, given no timing issues.
REDWOOD CITY, Calif. – November 20, 2013 –
According to a newly published report by Dell'Oro Group, the trusted source for market information about the networking and telecommunications industries, the wavelength division multiplexer (WDM) equipment market, comprising both metro and long haul applications, grew nearly 20 percent in the first nine months of 2013 compared with the same period a year ago.
"Demand in North America for optical transport equipment has been really strong," said Jimmy Yu, Vice President of Optical Transport research at Dell'Oro Group. "Market revenue for WDM equipment in North America has increased year-over-year for the past three quarters. Growth started modestly in the first quarter at five percent, and rose to 25 percent in the third quarter. However, following the strong level of WDM equipment rollout in the first nine months of the year, we do expect equipment sales to be softer in the current fourth quarter as service providers conserve their capital," added Mr. Yu.
North America WDM Equipment Market
$2.3 Billion for period including 1Q13 thru 3Q13
Equipment Manufacturer...........Rank Y/Y...........Growth
Ciena............................................1...................+ 9 %
Fujitsu...........................................2..................+ 65 %
Cisco............................................3...................+ 1 %
Infinera..........................................4...................+ 22 %
"I don't know if you are just misquoting Dr. Welch or if he doesn't know but Glen Wellbrock does."
It wasn't a misquote and I assumed you were jesting in iimplying Dr Welch wouldn't be aware of the state of the art at least as well as his peers.
16-QAM modulation is available from a variety of vendors, including Infinera, and limited to relatively short distance applications. Lyon to Paris is 370 miles, according to Google. If you want to use that on all routes and climb the modulation ladder to higher speeds per channel, you'll need more powerful DSP's (that aren't currently available now).
From a line card perspective, I believe it takes two Alcatel line cards ganged together to get 400G Superchannel. Infinera can do a 500G Superchannel on one line card and stated they tested 1T on either a one prototype terabit PIC card or two ganged 500G PIC cards (they didn't specify).
"Infinera has an advantage in horizontal PIC technology. That's it. "
That should be enough. If Infinera is given a chance to build up volumes, PIC should have a clear pricing, density, and reliability advantage over equivalent discrete component modules. The pricing advantage should get stronger, as the volumes increase. Relegate those 1-10G modules out to rurual areas and upgrade to 100G everywhere else.
Infinera Flex Coherence offers 16QAM, so it would seem to offer the same modulation format as the service engines from CIena and Alcatel. They can burst 100G+ per channel over the same shorter distances, given the same fiber optical constraints that the others have to deal with. The Competiiton is offering 400G initially via 4x100G. Infinera offers 5x100 Superchannels. When the electronics can clock at higher rates per channel, they will all have 100G+ per channel, at about the same time.
Dr Welch stated that the electronics are not there yet (anywhere) to deal with 100G+. I'll take his word for it.
I think the idea of many vendors with competitive pricing looks tempting, but perhaps the big telecoms are finally waking up that it's costing them more in the end to interconnect all of these diverse systems rather than go with a best of breed, converged solution. It could be that telecoms are taking on more of an Enterprise-like attitude toward their equipment purchases, going forward and starting with 100G. It's time to clean house.
Below is comment from Sterling Perrin, taken from Lightreading, after the recent article by Editor=in-Chief Ray Le Maistre, "Ciena Suffers Margin Squeeze in Q4"
"Re: 100G.......This remains incredibly competitive and the competition doesn't seem to be subsiding. You have Huawei, Alcatel-Lucent, Ciena, Cisco, and Infinera all strong in 100G, with comptition also coming from Coriant, Ericsson, ZTE, Fujitsu, even tiny companies like Xtera, and others too."
"Reginal barriers that used to exist in the Sonet/SDH era seem to have eroded with Ethernet and so competition has become more global. That's just one factor. In any case, anyone winning 100G deals has to be pushing the limits on pricing. Operators have the upper hand."
It doesn't seem like market fragmentation among vendors is a bad thing, in and of itself. Hopefully Infinera can compete and win a leadership position as a relative pureplay with cutting edge systems (centered about their core competency) competitively priced, as the bigger Competition looks over its shoulder about what's happening with respect to wireless and edge equipment. A diversified product line opens them up for being attacked from all directions.
Companies eventually assess whether it's worth it to stay in the game. Usually they run the numbers and decide it's not worth the headache if they can't be number 1 or 2 (maybe 3) in that market. In the meantime, they can stay in the game all they want, lose money on every sale, and sign up for warranty support that could end up being a liability for low reliability products.
Digging a bit further into Ericsson's history
- 10/2005 bought Marconi's optical networking equipment division
- 2007 bought Redback Networks (edge routers)
- 2007 bought Entrisphere (fiber-access)
- 2008 sold PBX division to Aastra Tech
- 2009 bought Nortel carrier networks division (CDMA2000 and LTE)
Looks like Ericsson is still pushing optical networking at the edge.
I can't find that Lightreading article that mentioned that they were trying to phase out optical networking at the end of 2012. Probably meant just LH equipment.
"Ericsson is exiting optical networking."
Yeah, an old LightReading article from 2012 mentioned that Ericsson was stopping efforts to design their own optical networking products in favor of re-selling DWDM gear from Marconi PLC. Supposedly, it wasn't a big manufacturing division for them and their Customer portfolio apparently was focused around TeliaSonera and its affiliations.
So, Ericsson is one less DWDM equipment manufacturer, opting to leverage off of Marconi products.
TelecomRamblings's Rob Powell posted his assessment of Ciena's revenue performance.
"Ciena’s report today may not have been as big as the rest of their year has been but it wasn’t bad either"
"Converged packet-optical revenues clearly drove the quarter’s results. Forward revenue guidance was a bit more conservative than hoped, but still straddled expectations. There wasn’t talk of demand suddenly dropping off unexpectedly in October as there was at Cisco, as backlogs remained large and the pricing environment held steady."
Sounds like Infinera can count on sales stability going forward, as a OTN pureplay.
It's not obvious to me whether Infinera can gain share in the Metro markets right now, with their 10G DTN/ATN solution being late-to-market and Customers not yet ready to fully embrace their 100G DTN-X (and their PIC Metro product still in devvelopment). Perhaps if they can continue to drive costs down, telecoms might eventually consider swapping every old 1-to-10G circuits for 10-to-100G. That would give the DTN an extended life and further open the door for the DTN-X, towards the edge.
Level3, Verizon, AT&T, Sprint, India, Australia... don't be shy, come and get it, from Infinera.
Unless I read the earnings calendar wrong, CIEN should be reporting first thing tomorrow morning, before the Market opens. It should be indirectly enlightening for INFN to see CIEN's sales performance for this quarter and going forward into the new year.
Hopefully the general market doesn't contract the jitters any time soon. A slump would surely distort the stock price reaction to forward sales visibility in the optical transport sector. The wait for 100G to mature is here with the DTN-X. Come and get it, telecom's. You won't be disappointed.
Down 8% from the peak in Sept is probably just some cashing in on the good timing to pound the stock down on no big news until at least the end of 2013. Shorts don't need to head for the hills with this particular stock, until the contract decisions actually leak. Plenty of time to react rather than prevent, especially if Level3 win comes in first, as a forewarning to the shorts.
There's still a chance for them that Infinera may not win either one, but optimistically, for us longs, it would surprise the shorts harder if Infinera won Level3 after winning VZ or perhaps India or Australia.
Infinera should be able to interoperate with all equivalent systems from other vendors, at least up to the various stringent network standards standpoints and vanilla network topologies.
Functionality differentiators may be in the operating system supplemental functions and utilities that handshake only between the DTN-X, DTN, ATN. Infinera will probably add more Flex- software switches besides the one for Coherence, as an attempt to align with other vendors.
Performance differentiator may be in max switching speed and how close the system can fill a fiber during high traffic periods or on high traffic routes. Infinera can tout this as why they're the leader... their systems can take anything the competition throws at them and not bog down.
Looks like Marlin Equities is continuing to build up an optical networking portfolio by buying entities that have been knocked down for the count:
-Nokia Siemens optical networks division
Analysts interpret this as an attempt to cash in on an expected boom in optical networking, I hope the latter half turns out to be a true statement, starting in 2014.
Below is cherry picking of company names. I omitted the associated executive's name:
#67 Infinera (Tom Fallon)
#70 AT&T Mobility
Broomfield (Level3 HQ) is about 10 miles as the Crowe flies, from Broncos Stadium.
Actually, James Crowe retired earlier this year, so the pun is obsolete.
Hopefully the Infinera Express is just driving by to ice their impending contract win, rather than only initiating hardware demos, now.
A statement from a recent Gazettabyte article "Reporting the optical component & module industry" seems relevant, here:
"When people forecast they always make a mistake on the timeline because they overestimate the impact of new technology in the short term and underestimate in the long term.
It seems like 100G LH and 100GigE to the telecom customer is just starting to gain favor and sales for the DTN-X are far from peaking, if they can win the contracts. The DTN-X seems best of breed, so it would have to be pretty entrenched politics that keeps Infinera blocked out from being at least a co-vendor.
One good thing is that all of Infinera's DTN equipment can be redeployed farther out towards the edge, as demonstrated by TeliaSonera.
Perhaps a partnership with Juniper or one of the other leading router vendors is a next step, to advance Infinera's convergence vision. GLTA in 2014.
excerpts below, from a whitepaper at the Infinera website titled "Special Report: TSIC uses
DTN-X to Differentiate"
"TeliaSonera Group and headquartered in Stockholm, Sweden,
TSIC is a global company and is very well known in Europe. However, its brand is not as strong in North
America as TSIC would like, despite being a player in the market since 2006. In fact, before it did a major
network upgrade based on the Infinera DTN in 2009, the company had essentially exited the
wavelength/high-capacity transport services business in the US: its mid-1990s-vintage DWDM
equipment simply couldn't cost-effectively scale to accommodate these services any more.
Since this 2009 upgrade cycle, TSIC has been back in North America and growing to the point that by
2012 another upgrade was needed. It sees a healthy opportunity to expand in North America and take
advantage of a gap in the long-distance market, where its key competitors (Level 3 and XO) also sell to
the corporate and mobile markets."
"TSIC's RFP covered equipment and related operations and maintenance support services for its optical
transport network, which included 35 PoPs spread across 24 markets, plus associated optical line
amplifier sites. (Note: TSIC has added PoPs in Washington, Toronto, and Boston since the RFP closed.
Ovum anticipates further expansion in the coming months.)"
"Infinera was able to demonstrate that a DTN-to-DTN-X swap-out would be easier for TSIC than a
completely new installation, and that it could be accomplished with minimal disruption of live traffic.
Route by route, region by region, Infinera installed a new DTN-X beside each working DTN and did the
cutovers at night across the 35 PoPs and related amplifier sites.
"TSIC reused the original DTNs by moving them to the network edge after cutting over the core nodes to
“Our strength is in taking decisions based on the market need. 40G market is declining and 100G is gaining traction. We made a sensible decision to skip 40G. Then, a large part of our resources and investment goes into innovation. We have a strong appetite for growth and offer strategically designed products with better quality,” says Wade.
The company claims to have sold around 26 percent of all 100G ports worldwide in just five quarter of shipping. It is also believed to have cracked deals with Reliance Jio and Railtel in India. Infinera is rumored to have be shortlisted along with Ciena and Alcatel-Lucent by Reliance Jio for procurement of Rs 2,250 crore ($500 million) worth of optical network transmission gear. The company, however, did not comment on the deals saying that it could neither deny nor confirm any development.
In recent months, the company has also been presenting its software-defined networking proposition to carriers in an aggressive way. The transmission-gear vendor is also bullish about 100 Gbps deployments in the country and says it is in active discussions with customers to understand their detailed roadmaps for deployment.
The company has a center of excellence in Bangalore which has a team of around 50 people, exclusively focusing on transport innovation for the India market.
—Jatinder Singh, Assistant Editor, Light Reading India
Infinera Plans India-Centric Strategy
November 26, 2013
by Jatinder Singh
Fiber-optic networking equipment and component supplier Infinera says it has adopted an exclusive approach towards the India market, which is growing but requires special attention.
Speaking to Light Reading India on the sidelines of NetEvents APAC Cloud Summit, Leigh Wade, Director, Business Development Asia Pacific, Infinera, says that India is known as a cost-conscious market and that is a key challenge. “We will never compromise with our quality and that’s a fact. However, in India the price points are a key challenge and hence we are constantly working out to provide quality offerings at those price levels. But that needs special focus,” Wade says.
The company says that it is wary of the competition with players like Huawei, Alcatel Lucent, Ciena, ZTE and Coriant but is not in a hurry to grab deals. “In India, we understand that service providers will not go with one vendor. There would be a competition, but then the market dynamics offer growth for everyone. More than grabbing contracts, our focus always remains on keeping the quality very high. We are in the process of announcing some key local contract wins formally and you will hear it soon,” Wade adds.
The company adds that because of large fiber cuts, the country needs integrated switching to build the mesh and Infinera has the right capabilities to provide more efficient networks to the telcos.
A recent Ovum report says that except in North America, the optical networking spending in Q3 2013 was relatively flat. Infinera was one of the key gainers there, along with heavyweights like Ciena and Fujitsu.
Infinera is known as a vendor with good technology, which supplies quality equipment that is flexible and consists of advanced features. The company, despite being considered as small compared to many of its competitors, has grabbed the eyeballs because of a consistency in getting quality deals.