By MEGHAN FULLER
The integrated switching and transport systems market has seen a flurry of activity in recent months, from partnerships to product launches. And rumors abound that several incumbent vendors will enter the fray within the year. That comes as no surprise to one industry insider who believes the economic benefits of integrated systems make them "a no-brainer."
The key advantage of such systems is the elimination of a set of optical-electrical-optical (OEO) conversions, which add a tremendous amount of cost to the network. According to James Frodsham, chief operating officer at startup Innovance Networks (Piscataway, NJ, and Ottawa, Ontario), OEO conversions can compose nearly 70% of the cost of today's core networks.
In a typical North American network, adds Frodsham, two-thirds of the traffic going into any given node is express traffic, and only one-third of the traffic is terminating or local to that node. Integrated switching and transport systems are designed to enable that express traffic to pass through intermediate nodes without incurring OEO-conversion costs.
"In a standalone DWDM system, you have a transponder interface at each fiber junction, coming in and going out," explains Ian Wright, senior vice president of engineering and chief technology officer at Altamar Networks (Mountain View, CA). "But if you integrate that system with a switch, then you get the connection from link to link inside the switch, and there's no transponder involved. Essentially, you take two or three lasers out of the equation, and the savings you make there more than pay for the cost of integrating the switching."
At SuperComm in June, Tellium (Oceanport, NJ) and NEC (Tokyo) launched the industry's first commercially available multivendor integrated switching and transport system. A few weeks later, Sycamore Networks (Chelmsford, MA) halted development of its standalone transport line, but then announced a strategic alliance with Siemens Information and Communication Networks (Siemens ICN-Munich).
While these partnerships may make waves in the near term, it won't be long before the incumbents begin unveiling their own integrated systems, says David Dunphy, principal analyst, optical infrastructure, at Current Analysis (Sterling, VA). Among those who should ante up are Nortel Networks and Ciena, both of whom have a sizable installed base, which puts them at a decided advantage. "If you don't have an installed base, frankly, there's not a tremendous number of long-haul systems being sold," admits Dunphy, who adds that carriers are mostly buying channel-by-channel upgrades into existing systems. Lucent Technologies (Murray Hill, NJ) is also said to be working on an integrated system that would combine its recently launched LambdaXtreme Transport with its LambdaUnite Multiservice Switch.
Entering the market after the startups and the partnerships may not prove to be an obstacle, since incumbents can leverage their existing market share. "The barriers to changing out systems right now and investing in new equipment from new vendors are high enough that it's really giving the incumbents a strong, favorable push, at least from the customer perspective," notes Dunphy.
A single-vendor system may be more attractive because of the stability such a system affords, adds Dunphy, who points out that carriers could be leery of any partnership in such a tumultuous economic environment. Of course, single-vendor systems can also be confining, argues David Krozier, senior analyst at market researcher RHK (San Francisco). "If I tightly couple the transport functions and the switching functions, I can go to a carrier and say, 'Look, I'm going to save you money,' but the carrier can look back and say, 'Well, that means I have to buy both my switching and transport from you.'"
The startups especially are faced with this dilemma. Most of them are building integrated systems from scratch rather than altering existing products, so they must convince carriers to deploy both their switching and transport technologies simultaneously. "There has to be enough flexibility on your platform that if a carrier wants transport alone, you do transport alone," admits Hanan Anis, chief technology officer at startup Ceyba (Ottawa, Ontario). "If a carrier wants switching alone, you do switching alone. And if the need is for integrated switching and transport, then you can provide that too."
Launched in March, Ceyba's C420 Dynamic Optical Networking System provides transport or switching or both. It features all-reach transmission that can extend 4,000 km without optical regeneration, thus reducing the need for OEO switching in the core.
Fellow startups Innovance and Altamar are also working on integrated systems. Innovance recently unveiled its AgileCore product suite, which combines photonic switching with "all-reach" transport. Innovance and crosstown rival Ceyba claim to provide a 70% reduction in carriers' capital-expenditure costs. Altamar, a spinout of Ditech Communications, offers what it calls the Titanium Optical Network System, which integrates LH and ultra-long-haul (ULH) transmission with optical core switching in the same platform. Altamar's system boasts optoelectronic switching, while Innovance and Ceyba favor photonic switching.
The dark horse in all of this might well be Corvis (Columbia, MD), which first touted pure photonic technology and a ULH system with "a little bit of switching," contends Altamar's Wright. "Now, they are arguing quite strongly that that was a bad idea. Their marketing message is starting to sound a lot like ours."
R&D vs. market
While the startups may have an advantage from a development perspective-they don't have to support the technology of the legacy base and can throw their efforts into reducing costs-"the market has to be there when they get done," says Current Analysis' Dunphy. "And right now, the market is there for people who are selling incremental upgrades."
In the future, he says, look for integrated systems that follow the formula established by Tellium and NEC, which took an existing NEC transponder and integrated Tellium transceiver functionality to create a transponder that could be dropped into the Aurora switch. "Even with the single vendor systems, you are still going to have two systems," he says, adding that Lucent, for example, "is not going to sell you a box called UniteXtreme. It's just how you interface the hardware that's going to change."