Photonics conference forum for companies driving all-optical future

An impressive roster of public and private fiber-optic communications companies briefed financial analysts on technology, business, and market strategies at Soundview Technology Group's recent Photonics '99 Conference in San Francisco. Representatives from Alcatel, Lucent Technologies, Nortel Networks, Corning, CIENA, Uniphase, SDL Inc., Chorum Technologies Inc., Lasertron, and several other firms unveiled their companies' future directions to attendees.

Technology advances in optical components, end-to-end optical-networking solutions through strategic partnerships and acquisitions, wavelength and channel management, and lowering optical component costs were on the agendas of several industry manufacturers.

E-TEK Dynamics Inc. has broadened its product line from optical isolators to include couplers and thin-film filter wavelength-division multiplexers (WDMs). The company has also moved high-volume manufacturing offshore to a Taiwanese facility, FibX.

CIENA broadened its core transport business to three product families through company acquisitions. The company will offer network operators an edge-to-core-to-edge optical solution with Omnia's multiservice transport technology for access networks, which supports Asynchronous Transfer Mode (ATM) virtual-path rings as well as Lightera's optical-switching technology, which offers grooming and restoration functionality at the network core without requiring a Synchronous Optical Network/Synchronous Digital Hierarchy (SONET/SDH) infrastructure. Products from the acquired companies are due later this year.

Startup Chorum Technologies will focus on active optical-network components, based on patented technology, that facilitate wavelength and channel management and avoid optical-to-electrical signal conversions in the dense WDM filter, optical-switching, and optical processing arenas. Planned products include an all-optical add/drop multiplexer and a programmable optical switch with non-moving parts. The company has 24 patents and has beta and pre-production products at 10 manufacturer and carrier customer sites.

Other vendor representatives, including Lucent's Kathy Skzelag, strategy director of the Optical Network Group, and Alcatel's Paul Harrison, vice president and general manager for optical backbone networks, addressed the challenges of meeting the unique fiber-optic requirements of the emerging metropolitan area networks.

Joe Skorupa, director of switching and routing at telecommunications industry analysis firm RHK Inc. (South San Francisco, CA), presented research regarding the shift from the digital to the optical hierarchy in public networks. Vendors that offer integrated high-performance switching and routing products, innovative metropolitan area network solutions, and network elements that incorporate multiple-layer capabilities--for example, WDM, SONET, and ATM--are well positioned in this evolving market, said Skorupa.

The public network will change dramatically as line rates increase, network elements are consolidated, and today's multilayered architectures are simplified. Moreover, increasing link speeds will drive discrete elements out of the network. According to RHK, the de facto business connection to the public data network is no longer 64 kbits/sec (DS-0); it's 155 Mbits/sec (DS-1, T1).

As transport line rates increase, routers and switches will adopt optical input/output, Skorupa predicted. WDM combined with high-speed switch/router ports will squeeze SONET network elements out of the network. SONET functions will still be required but provided in other network elements, he noted.

The public network is also changing because many applications such as transactions, Web surfing, and virtual private networks require bandwidth that supports immediate "responsiveness" to accommodate bursty traffic. Today's packet networks often fail to provide the same response rates as private-line networks. Recent studies have shown that average usage is less than 15%. "Today, people are buying responsiveness, not total bandwidth," asserted Skorupa.

New telecommunications companies designing and building networks based on the latest technologies are offering high bandwidth at very aggressive prices, according to Skorupa. These service providers are also cherry-picking key accounts and stimulating deployment of bandwidth-hungry applications.

While bandwidth demand is increasing rapidly--for richer, more complex content, higher access rates, and more nodes--revenue growth is not keeping pace, said Skorupa. The mismatch in growth of bandwidth and revenue is driving the need to simplify networks. Dense WDM has dramatically lowered the cost-per-bit, according to RHK research. More-efficient approaches are vital for service provider survival.

Companies to watch, according to Skorupa, include vendors offering new transport nodes and technologies. He cited companies with products that support ATM virtual-path rings, such as Atmosphere Networks, ADC Telecommunications, and Omnia/CIENA. Players in the optical-crossconnect arena--Monterey, Tellabs, and Lightera/CIENA--will also command attention.

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