BLOG

ADVA: Ottawa Connection and Endgame

July, 2019

  To the best of our knowledge, fibeReality has been the sole source in the world to continue to report on the substantial laboratory, the Germany-based optical vendor, ADVA Optical Networking, has built in Ottawa, Ontario. To say that this move has been stealth in nature endures as the ultimate understatement. We believe there have been three major motivations for the construction of the complex: 1) conduct the necessary R&D work (including the formation of partnerships) to become sufficiently vertically integrated; 2) establish a true North American presence to penetrate into two of the very large incumbent ISPs (our intelligence has revealed that ADVA is already a metro supplier to CenturyLink) and make further in-roads into big enterprises, as well as go after the burgeoning opportunities in 5G and in edge nodes; and 3) hopefully entice the Canadian-driven Ciena to buy it out in...

Read More

Inphi: De Facto Merchant Coherent DSP Play

July, 2019

  While the bulk of the analyst community in the optics space continues to engage in pandering on the Cisco Systems purchase of Acacia Communications, rather than doing the requisite amount of homework, they also miss out on the bigger picture concerning new opportunities, as well as failing to close the door on other so-called, business prospects. In the same way that the end-users will prohibit Acacia’s DSPs being used in non-Cisco system gear, they will certainly also disallow Ciena and other vertically integrated suppliers (assuming that these vendors are even truly inclined to provide them anyway) from selling such components to their competitors. So, other than the potential for direct sales from the large system houses of components to Web 2.0 operators, which we do not necessarily buy in any kind of big way (other than potentially from Cisco), much of this hype is unjustified...

Read More

Infinera’s “Tellabsation”: Back to the Future

July, 2019

  Regular followers of fibeReality’s separate, quick-update blog were able to read our latest take on Infinera, as we stated: “We view the messaging [on its last webinar], as a clever means of slowly weaning the industry off the stress on PICs, by using language associated with these chips, as the company moves forward in new directions.” Given the fiasco associated with Cisco Systems’ acquisition of Acacia Communications, the requirement to move the attention on the company away from high-end optics in general becomes more pronounced, as it will not only need to wait for help from a different merchant DSP supplier for its Groove platform, but the odds of it creating an ICE6, and shipping it in volume, after giving up on ICE5, should probably be considered out of the realm of possibility. Thus, in the same way that the “Nortel” optical culture lives on at Ciena, the...

Read More

Cisco/Acacia: Influence of Group Denial

July, 2019

  Although Acacia Communications was at the optimal point to exit the DSP merchant space, the split second after the announcement of the Cisco Systems takeover, the Web 2.0 operators changed their view of the former from being a key enabler to an undesirable inhibitor. Those system vendors, which were totally dependent on this solution, also had a similar type of reaction. Nevertheless, industry-wide, there was close to universal admiration expressed publicly about the transaction. Already in a weakened state, it is understandable that Infinera in its latest webinar, initially described its emphatic sureness that there was no negative impact from the sale (although arguably, it almost immediately, and indirectly, seemed to back somewhat away from that stance, as the presentation was a part of the slow process of deemphasizing its PICs). While ADVA Optical Networking, as a public...

Read More

400GbE Modules: Forecasting 2025 vs 2020

July, 2019

What exactly is a “real” client-side 400G device? We can certainly count on many marketing folks, and just about all research firms to define it as broadly as possible because for them, it is all about making the size of the opportunity as big as possible. Certainly, in the past and more recently, when fibeReality talked about the slow arrival of 400GbE, it was in the context of how it was defined by the vast majority of optical technologists in the industry: after standardization of the physical medium dependent sublayers by the IEEE -- in particular, in moving forward, the efforts of the 802.3ck Task Force, as the main presumption is that the industry needs to get the SerDes line rates to 100 Gb/s. Of course, two of the Web 2.0 operators, Google and Amazon, for their internal optical networks, have chosen to go with what at least some engineers might call band-aid approaches, the...

Read More

MACOM: Volte-Face Analogous to Infinera

June, 2019

There are striking similarities between MACOM Technologies Solutions and Infinera – not only regarding the most obvious characteristic that they have likely, more or less, reached rock-bottom on their valuations, but on the comparable paths that they took to get to this point. Each unwisely moved up the food chain from the optical chip level, which had immediate negative ramifications, as Infinera ignored the admonishment that it would rapidly result in a substantial decline in the size of the total long-haul system market, and MACOM quickly became what has been accurately described by some people in the industry, as an ineffective holding company for acquired parts of differing worth (not to mention MACOM entering deeply into the “hyperscale vortex” with Amazon). Each vendor was driven by over-the-top marketing/sales efforts, with the tendency to hype non-existent,...

Read More

Crown Castle: Cornering Synergy Combos

June, 2019

Although still considered a REIT play by the investment community, Crown Castle made a bold change in its corporate strategy to become a full-service provider, distinguishing itself from other tower companies, especially by the sheer breadth of its fiber acquisition and construction efforts. At REITweek 2019, it stated: “Over the course of the last seven or eight years, we have invested in the neighborhood of $15 billion in fiber and small cells [about 80 percent of that total on the former].” The idea is to provide a more complete package of offerings to wireless companies on one bill, while also generating higher margins for itself. Such a major shift is hardly without some real risk, including the challenge of getting into a totally new business of installing and selling dark fiber, where even Verizon itself, which has been deploying fiber since the 1980s, discovered it was way...

Read More

Rockley Headship Legacy: SiPh Hangover

June, 2019

Rockley Photonics’ founder and CEO, Andrew Rickman, could never seem to escape dealing with Silicon Photonics (SiPh) throughout his ventures over the years, paradoxically, representing a microcosm of the industry’s difficulties in working with the technology successfully in general. To be sure, he had an extensive technical background in the field, and was an early advocate of its potential, even dreaming about Bookham, which he founded in 1988, becoming the next Intel, with the focus on optical chips. In addition, the company was responsible for creating a good number of the original patents in the space. Nevertheless, after the bubble burst at the turn of the century, it was Bookham’s purchases of component businesses further up the food chain, particularly from Nortel and Marconi, which resulted in its survival, but not in the long-term continuation of Rickman as CEO (although...

Read More

SDN: Prolongation of Past Panacea Parade

May, 2019

  Although SDN proponents are most known for advocating separate Control (C) and Data (D) planes as an abstraction layer, and some have referred to it as a revolutionary, novel paradigm, this bifurcation concept actually goes back to 1975, with the development of SS7 by the original AT&T, which resulted in distinct signaling and transmission networks. This common control mechanism itself turned out to be a great success in due course because it did not upset the offshoots of the legacy Bell System, neither technically/operationally, nor culturally. In contrast, ISDN was a big failure, even though a CCITT recommendation in 1988, exactly discussed the notion of such C and D planes, because it did require a major transition for these carriers, such as in moving away from voice, as well as the heavy amount of resistance at the operators in converging that service with data. Actually,...

Read More

Zayo Had Sought to “Move Cups Around”

May, 2019

In fibeReality’s opinion, a kind of “shell game” seems to be conspicuously occurring at times in the telecommunications market, without always the precisely nefarious connotations frequently associated with the term, including not only temporarily involving Zayo Group, but WindStream Communications in the past, as well as currently AT&T. While the exact details of the plans of the three entities have been dissimilar, the intended outcomes have a lot of commonality -- asset divestitures to maximize profit in one group versus the other. In other words, it is about making the individual part of a company really profitable, while the other tends to assume the losses, and then getting a better multiple in the overall valuation. We have recently touched on AT&T’s apparent plan to shift as much of its excess infrastructure as possible from the wireline side, including central offices,...

Read More

Ciena: The “Blue Planet” Metamorphosis

May, 2019

A few years ago, fibeReality wrote: “We believe that historically, [Ciena] has had a penchant for readily transitioning to the strategies and philosophies of executives, particularly brought on through acquisitions…” At least when it came to certain negative effects of the “Nortelization” of the firm, they were tempered by the actions of the CTO office. While in 2016, we were concerned about adequate revenue generation, it did not come to pass for various reasons, including: the substantial improvement in the US economy, Fujitsu’s move to a disaggregated approach, Infinera’s position becoming extremely weakened (while removing Transmode and Coriant as competitors), ZTE almost being destroyed, Nokia Networks’ continuing ambivalence at best toward optics (and its inability to divest those assets), and ADVA Optical Networking previously getting too immersed into the...

Read More

Infinera: Plausibility for Cautious Optimism

May, 2019

After so many years of a stubborn, false narrative that its PICs provided a true-cost advantage, without acknowledging their technological drawbacks, including that their optimal play was always for point-to-point applications, as opposed to routes with drops, Infinera has finally given in on just heavily favoring its products developed in-house, such as on DCI gear, as well as on orchestration software. Such developments by themselves would not cause a much greater level of confidence in the supplier this late in the game, when it is as hard as ever for optical system houses to differentiate their products. By far, the potentially most significant change for Infinera is the recent appointment to its corporate board, Greg Dougherty, ex-CEO of Oclaro. Of course, he was on the board of Oclaro, before taking over the company, and then was behind the minor miracle of saving it from...

Read More

Google Fiber Won’t Ever Confess Motives

April, 2019

 “It’s clear that Google Fiber’s presence in Louisville led other providers to step up and increase investment in Louisville, and that was good news for consumers everywhere,” Louisville Metro’s Grace Simrall said. Naturally, the impetus for Google Fiber, since the beginning, almost a decade ago, has been totally transparent in impelling other service operators to build Fiber-to-the-Home (FTTH) infrastructure, while maintaining any construction by itself to a minimum. Yet, the trade press and industry analysts in the space have and will continue to avoid outright dismissing Alphabet as a serious player in the FTTH market, despite any evidence to support such a viewpoint. The situation in Louisville may have been the most egregious example of its insolence in using the city as a guinea pig to try out a new means of installing fiber. In potentially demonstrating the utility...

Read More

Verizon’s 5G Fronthaul Fiber Sustainability

April, 2019

Proficient, long-time networking engineers and planners comprehend that designing architectures can be really tough, and they realize the main reason Verizon wants to do home-runs from the CO to the cell towers for 5G. A centralized approach reduces the number of active nodes in the field that require power (including backup) and maintenance, which will become part of the total lifetime cost of sustaining the service. In fact, of all of the principal necessities for a small cell, the priciest is power. So, in not introducing a large number of intermediate points, just the expense saved in not having to replace the batteries every several years can be substantial. Another big advantage with placing all of the Baseband Units (BBUs) at the CO is that there is the most efficient use of the bandwidth, as there will be variations on the number of users at each of the towers. Other benefits of...

Read More

Juniper’s SiPh: Reductio ad Absurdum

April, 2019

Now Juniper Networks has joined Intel and Cisco Systems in offering 100G data communications transceivers (TXs), in which margins are awfully tough, if not unfeasible in many cases. What is next – Arista Networks being coerced by the hyperscale data center operators to purchase a Silicon Photonics (SiPh) supplier, such as Skorpios Technologies, which has appeared to be in limbo for a long time, but according to the optics supplier in 2017, has a CWDM4 solution? Even Mellanox Technologies (now in the process of being acquired by NVIDIA) entered the PSM4 space that same year, and it is still not totally evident to us whether it relinquished its problematic (SiPh) gear. Once again, the hyperscalers destroyed the optics ecosystem, which has resulted in Lumentum Holdings removing a principal optical TX supplier, along with varying levels of negative impacts on players, such as Kaiam and...

Read More

OFC 2019: Nine Additional Odds and Ends

March, 2019

Before getting to the subject of this article, I need to point out the most significant and outstanding event at OFC: Mitch Fields at the “Special Chair Session” on the “Role of Optics in Future Data Center and Computing Applications.” He moved and wowed everyone in that packed room as he talked about his courageous battle with brain tumor, as he thanked former optical engineers who have worked on his novel form of treatment, and as he validated his position as one of the top engineers in the optics business. Ken Chang, the following speaker, aptly stated that such an inspiring presentation helps all of us to keep things in perspective. Glenn Wellbrock of Verizon at the “Broadband Acceleration Seminar” of the Broadband Forum pointed out what separates a serious 5G player from the rest of the wireless providers in the US -- that it is deploying fiber as quickly as it arrives...

Read More

Microsoft’s “Heat Check”

March, 2019

In basketball, when a player, who has been hot in a game in making several three-point shots in a row, which is within that person’s customary range, after, say, getting open by receiving the usual couple of screens from his teammates -- but then later, for example, chucks up a somewhat longer shot, while closely guarded by an opponent, it is often referred to as a “heat check.” fibeReality believes that the same characterization can be made of Microsoft, which over the last several years, has been very aggressive in leaving its traditional, conventional comfort zone as representing a hybrid of an enterprise and carrier mindset, to strive to match, if not outright exceed, the too-often, heedless tactics of the other big-three, large, hyperscale data center operators – which, of course, resulted in the downfall of the optics ecosystem. Yet, at OFC 2019, along with Microsoft...

Read More

Lumentum Owns Basis of Oclaro Takedown

March, 2019

At OFC 2019, Lumentum Holdings finally acknowledged the principal rationale for purchasing Oclaro, by announcing the divestiture of the data communications transceiver (TX) product line of the latter (last September, it was certainly clear to fibeReality that such “Oclaro” equipment was going to take a hit), and by stating in extremely direct terms at the Investor Session, the destructive pricing environment at the hyperscale data center operators (this overall motivation for the buyout we expressed a year ago, referring to an ecosystem collapse). Incredibly, as recently as late, last month (at the Morgan Stanley Technology, Media & Telecom Conference), Lumentum asserted that at the time of the announcement of the buyout: “We didn't know how bad or how challenging the [the data communications transceiver market] would be.” In fibeReality’s opinion, Lumentum also figured it...

Read More

On Cisco’s Rationalization for Luxtera Buy

March, 2019

At the OFC 2019 Media/Analyst Luncheon – “Hot Topics in Data Center Optics: Emerging Standards/MSAs, Silicon Photonics, 400G and Beyond,” Bill Gartner, Vice President/GM Optical Systems and Optics Group, Cisco Systems, mentioned the idea of “placing bets” because his company cannot get involved with everything in the space. In response to this point, this writer brought up that many people in the industry were scratching their heads about the Luxtera purchase, pointed out that there had been practically no public comments on silicon photonics technology by him over the last few years (other than apparently critical remarks), and sought out whether it would be used as a loss leader in the same way that Intel appears to be employing its sales of optical components. Gartner replied that the acquisition was not driven by the PSM4 product line, that Luxtera had an interesting...

Read More

“Fireworks” at OFC SDN Controller Panel

March, 2019

Please be sure you hang around long enough next week at OFC 2019 to watch a unique, exciting debate during the panel of “How Centralized should Centralized SDN Control and Orchestration be?” There will be no wasted time on speaker introductions, and the number of slides per participant will be kept down to a very bare minimum. The bulk of the session will be used for an interactive disputation, including ample time for members of the audience to join in the fray, asking questions and making arguments, reflecting their own points of view. In some cases, we will be getting into subject matter complementing the various combinations of monolithic, modular, and hybrid approaches being advocated by the participants. Some of the other intriguing and provocative aspects that will be addressed include: determining the extent to which ISPs have been moving to a single, consolidated...

Read More

CenturyLink/Zayo: Verizon’s Forewarning

February, 2019

While Verizon’s first-mover position with 5G wireless in the US will offer many advantages, including a locality just simply wanting to avoid the negative aesthetics of having another operator in the same location, it also adopts the role of the guinea pig in taking on many unknown technical challenges, leading to higher, unanticipated expenditures. Although there is ample speculation about CenturyLink purchasing at least a portion of Zayo (which fibeReality believes will happen), along with our intelligence pointing to a possible CenturyLink-T-Mobile-Sprint merger, we would assert that in hindsight, at least some Verizon executives may have tried to argue harder for pulling the trigger on purchasing the fiber provider itself. To be fair, Verizon had to be especially concerned about regulatory matters, as it has a historic reputation for at least trying to control as many assets as...

Read More

Ciena and Ericsson: The Virtualized Merger

January, 2019

The “Nortelization” process at Ciena started several years before the supplier actually bought Nortel Networks’ assets. Former Nortel executives slowly worked their way into the Ciena organizational woodwork, and it became kind of a soundless coup. By the time, the trigger was pulled on the acquisition, mainly out of financial desperation, the mindset of, as well as control by, the Canadian executives, were already well-entrenched at the company. Naturally, they have been even more careful about protecting their turf in recent times, as there has been a tremendous effort of getting human assets from Ericsson, making sure they become indoctrinated into the “Nortel” way of thinking, and so, whether the optical vendor formally merges with the Swedish company, there would be no threat to the status quo at the “American” firm. In a future buyout, there would also be the...

Read More

ADVA: Next Optics Dynamo in NA

January, 2019

The combination of the apparent penetration of ADVA Optical Networking into the incumbent ISP transport gear marketplace, along with the anticipation of the number of sizable players continuing to dwindle, appears to make the company well-positioned to become a principal optical system vendor in North America. The supplier’s confidence in reaching the next level on the continent is evidently quite high, as fibeReality hears that it is currently constructing a $3 million lab in Ottawa. (Part of this effort is that ADVA will increasingly become a prominent leader of the 5G infrastructure play, including beyond just optics considerations.) So, the idea that it is in “the middle of a nice pipeline build in North America” as expressed on its Q3 2018 earnings call, could turn out to be an extraordinary understatement. Obviously, like fibeReality, ADVA is betting that both Nokia Networks...

Read More

Verizon Retains “Oath” of Fealty to Itself

January, 2019

The “Oath” division of the most inventive, incumbent ISP on the planet, including the design of a long-haul network, which is as “future-proof” as humanly possible, and standing by itself in its construction of the FiOS network (without any direct government support), is now called the Verizon Media Group. While the service provider has made notable missteps in the past, including initially projecting very low on the cost of a key component of 5G wireless, understandable in its role as a pioneer, the inability of so many people analyzing the corporation to give it the benefit of the doubt, is simply astounding. When a very tiny minority of consultants, including this writer, explained the reasonable rationale behind Verizon pulling the trigger on FiOS last decade, as it did not prove-in on a first-cost basis, a good number of critics preferred the narrative that the operator was...

Read More

Arris + CommScope = Another M&A Decoy

January, 2019

An industry observer is expected to believe that CommScope, which was on the record at Investor Day, several months before the announcement of the merger with Arris Group, that it would only consider a relatively modest acquisition (and highlighted its previous buyout: “a very small connectivity company called, Cable Exchange,”) would so quickly change its mind, ostensibly because of future market opportunities, especially 5G (while commenting last month at the Barclays Global Technology, Media and Telecommunications Conference, “[W]e're really in the infancy of all of this, trying to figure out where it's going….”). Such an individual is also supposed to be persuaded that “[a] primarily…passive product infrastructure provider,” which around a couple of years ago divested its RFoG and EPON businesses, suddenly decided to change its corporate ethos radically by becoming...

Read More