Venture capitalist says 'so what' to metro DWDM lag, 'hottest place to invest'
By STEPHEN HARDY
A funny thing happened on the way to dense wavelength-division multiplexing (DWDM) in the metropolitan-area-network space-with comparatively few exceptions, carriers didn't buy the equipment. The bump in the optical road has caused some in the financial community to take a wait-and-see approach to funding optical-networking technology for metro applications, particularly if that technology centered on DWDM. But not all financiers have turned their backs on the metro space.
"I think the metropolitan area is still super big and super hot," says Roland Van der Meer, co-founder of the venture-capital group ComVentures. "It's just a real tough problem. It's very obvious that everybody needs more bandwidth terminated at the customer premises. At the same time, the backbone is really not ready for it yet. So you kind of have to walk it one step at a time-more local-access bandwidth and more backbone bandwidth. If it was all there at once, we'd have a major failure on our hands. So I think the metropolitan area, when people say, 'oh, it's cooling off,' no-that is the hottest place to invest."
Van der Meer bases much of his confidence on emerging technologies, not only for the metro environment but across optical networks in general. "I think we haven't begun to see the effects of what passive optical components will do in both the metro and long-haul areas," he says. "I think we haven't begun to see what the backbone core technology of optical switching will begin to do in terms of deploying backbone technologies and architectures."
Like most observers, Van der Meer sees the delivery of services based on Internet protocol (IP) as the driver for fiber deployment-and optical-technology investment. "We're all talking about fiber networks. So we're trying to get fiber to the larger and medium-sized businesses, and we'll just deliver IP solutions," he offers. IP-based service provision is less complex than offerings based on Synchronous Optical Network (SONET) or Asynchronous Transfer Mode (ATM), in Van der Meer's opinion, provided that quality-of-service issues and the issues surrounding the enforcement of IP-based service-level agreements can be overcome.
Van der Meer remains bullish on new fiber-optic network builds as well, provided there's a sound business plan behind them. Again, IP will play a role, particularly as new ventures use the carrier's carrier space as an entry vehicle. The carrier's carrier business can be quite profitable, he says, "as long as you know what you're doing"-which may mean combining capacity with an IP-based service such as wholesale voice over IP or wholesale virtual private networks.
The bottom line is that the demand for bandwidth will continue to rise. And so will the resultant need for fiber-optic technology and networks. "I would bet that any forecast you make in terms of capacity and bandwidth will be met or beat in the next 10 years-provided the financial markets are there to fund it all," Van der Meer concludes. "So we're pretty excited. We think it's a wonderful place to be investing in."