'Co-opetition' the name of the game for vendors of optical transceivers
By MEGHAN FULLER
To satisfy what one manufacture called "unabated strong pressure from customers," optical-transceiver manufacturers continue to compete fiercely to make the smallest, fastest, highest-density, lowest-power devices. A recent trend toward 10-Gigabit Ethernet (10-GbE) transceivers has led to the establishment of three competing multisource agreements (MSAs), which, in turn, has created rather complex competitive relationships among optical-transceiver manufacturers.
A transceiver converts electrical pulses to light pulses and vice versa. It contains active circuits that accept electrical pulses and convert those pulses into light for transmission down one or more different distance rates. Also referred to as an OE or EO converter, the transceiver contains both a transmitter and receiver in the same package.
"These would be the optical interfaces to the switching systems or the routers for Ethernet- and SONET-type equipment," explains Arlen Martin, senior product manager at Agere Systems (Allentown, PA). "It is an electrical interface, but it also has an optical connector that will protrude through either the front or the back of the system equipment, so that the end user of the switching equipment can plug the fiber from their patch panels into these transceivers."
For this reason, optical transceivers are fairly ubiquitous throughout the network. "For any piece of networking equipment that wants to be connected optically, you have to put in a transceiver or a transponder to put in that function-to drive the light down the wire," says Warner Andrews, vice president of marketing at Picolight Inc. (Boulder, CO). "They show up at every spot in the network, from an enterprise Ethernet or Gigabit Ethernet [line] all the way to submarine links."
Smaller and faster
The transceiver industry has always been striving for increasingly smaller transceivers, because the size or width of the transceiver determines how many can be placed on the system board. They are currently available in four sizes or package types. Deployed since the mid-1990s, the 1x9 is 1 inch wide and about 2 inches long. The GBIC package is slightly larger than the 1x9, but it offers the advantage of hot pluggability, while the 1x9 is soldered to the circuit board. In 1998, several companies came together and developed what became known as the small-form-factor (SFF) transceiver, half the size of the GBIC at about a half-inch wide. An outgrowth of the SFF is the small-form-factor pluggable (SFP), which is the same size as the SFF but, like the GBIC, is pluggable.
Vendors are also working to achieve higher speeds. Transceivers have been operating at 2.5 Gbits/sec for several years, but the market has begun making its first steps in the migration to 10 Gbits/sec. In March 2000, Agilent Technologies and Agere established the first MSA for 10-GbE transceivers: XENPAK. At OFC in March, two competing MSAs were announced: XPAK and XFP.
Emergence of 10-GbE MSAs
The XENPAK transceiver module conforms to the 10-GbE standard established by IEEE 802.3ae and supports all four transceiver types defined in the standard-850-nm serial, 1310-nm serial, 1310-nm WWDM, and 1550-nm serial. XENPAK specifies devices not to exceed 1.5 inches wide, 4.8 inches long, and 0.7 inch high. The electrical input/output is based on XAUI (10-Gbit Attachment Unit Interface). The devices are front-panel pluggable and employ a standard SC duplex fiber-optic connector.
At press time, XENPAK's member companies include Agere, Agilent, Blaze Network Products, ExceLight, E2O, Finisar, Hitachi Cable, Ignis Optics, Infineon Technologies, JDS Uniphase, Intel Corp., Luminent, Mitsubishi Electric, Molex, Multiplex, NEC, Network Elements, Nortel Networks, OpNext, Optillion, Picolight, Pine Photonics, Stratos Lightwave, Tyco Electronics, and Vitesse Semiconductor Corp.
Though XENPAK had a solid head start on competing MSAs, it has its share of detractors who claim that the XENPAK transceiver forces system OEMs to size all of their transport slots to fit transport applications, when the majority of their applications are not transport but more like data-center or campus interconnects. "We've always thought that the sweet spot for Ethernet-centric applications is really those campus interconnects and the high-end data centers," surmises Andrews, "so we felt like the system OEMs would want to develop optimized platforms for that particular sector. To that end, we think that what's needed is a higher-density, single-sided application."
The XPAK transceiver, championed by Intel, Picolight, and Infineon Technologies North America Corp., is plugged directly into the front panel of electrical devices and features increased density; up to 70 devices can be installed on a single, 17-inch printed circuit board.
Like XENPAK, the XPAK transceiver uses a standard 10-GbE XAUI electrical interface over a 70-pin RFT-style connector. It supports 10-GbE and Fibre Channel optical links from 2 m to 10 km, which represents the majority of connection requirements for enterprise, SAN, and switching-center applications, contends Andrews.
The goal of the XFP 10-Gbit serial interface module MSA, meanwhile, is to develop an even smaller or "ultra-small" form factor by removing the multiplexing ICs and other electronics normally found within optical transceivers and transponders. The small size of the device enables the deployment of 16 10-Gbit ports on a 22-inch line card. It supports data rates from 9.95 to 10.7 Gbits/sec and is targeted at applications up to 40 km.
Founding members of the XFP MSA include Broadcom Corp., Brocade, Emulex Corp., Finisar, JDS Uniphase, Maxim Integrated Products, ONI Systems (now part of Ciena Corp.), ICS (a Sumitomo Electric company), Tyco Electronics, and Velio.
Work in progress
Development work continues within each of the three MSA groups, as several critical problems still must be overcome. According to Tom Fawcett, marketing manager for the fiber-optic business unit of Agilent Technologies' (Palo Alto, CA) Networking Solutions Div., heat dissipation is a problem with higher-speed transceivers. "Generally, what's happening is that as speeds increase, the heat increases, and that creates problems within the box," he explains. "You have to be removing that heat as fast as you're putting it in-or at least, you have to meet the different industry standards and design guidelines."
Michael Peppler, senior strategic marketing manager at Agere, echoes this concern. "There is a serious concern whether we can do 10 Gbits in the current form-factor-size transceiver, primarily based on issues with power dissipation," he admits. "So there is continued discussion in the industry-between customers and suppliers-about what an alternate [10-GbE] form factor will look like."
However, one of these MSAs will eventually win the market, declares Lisa Huff, senior optical components analyst at Communications Industry Researchers (CIR) Inc. (Charlottesville, VA). "I say 'eventually' because XENPAK has been out for quite a while now, and there are equipment manufacturers that have actually said they are going to use it."
That said, many of those manufacturers have also complained about the size of the transceiver and the fact that they have to cut a slot into their board to accommodate it, she reports. "I think [XENPAK-based transceivers] may get into the first generations of the 10-Gbit equipment, and then it will trend toward the other small-form-factor transceivers: the XPAK or the XFP. Between those two, it's too early to tell. There are big guns behind both of them," she asserts.
In the spirit of "co-opetition"
Many vendors regard MSAs as a necessary step in the development and widespread acceptance of a new technology. "You can't get a market going without some partners," says Agere's Martin. Some MSAs are formed by a variety of small players coming together to add credibility to their technology or product offering. Other MSAs are formed by large players that have a different or non-overlapping product focus that need to align with several smaller players to get past the purchasing requirements for multiple sources.
MSAs also benefit the customer, who likes the security of having more than one source for a given product. Moreover, says Martin, "If each company designed its own product without communicating with others, you would end up with-in the case of XENPAK-25 different shapes, sizes, etc. That would make it very difficult for our customers to design and manufacture their products."
A market rife with MSAs creates a unique competitive landscape, however-one that Picolight's Andrews defines as "co-opetition."
"Literally, what you try to do is cooperate, compete, and co-opt all at the same time," he contends. "You have to have a strategy that's running on multiple levels."
Martin agrees: "As a result of these MSAs, these de facto standards, you have a product that looks like everyone else's and it fits in the same slot. You're left with trying to figure out how to differentiate yourself in the market."
On the wings of GbE
To win business, he says, vendors have to go the extra mile. They need to meet the minimum requirements of the MSA, of course, but then try to move beyond it, by transmitting over longer distances, adding performance enhancements, or adding new functionalities inside their module, for example. "In a tough market like this, you have to be creative, and you have to deliver unique products, good products when your customers want them," he advises. "And, of course, price is always important."
However fiercely the competition may rage, the market for 10-GbE transceivers is not exactly going to explode tomorrow. "Over the next five years, we believe the big opportunity is in Gigabit Ethernet, not 10-Gigabit Ethernet, mainly because if you look at the market today, most Ethernet ports are still 10/100 copper," reports CIR's Huff. "These have to be switched over to Gigabit Ethernet before you really even have a need for 10 Gbits."