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II-VI’s Gloomy Look Under Finisar’s Hood

November, 2019

In fibeReality’s opinion, irrespective of II-VI leadership’s original plans with its big merger, figuring out what to do with the mess that was left by Finisar’s interim CEO, Michael Hurlston, along with the implicit approval of the corporate board, will be the biggest challenge in its entire existence. We certainly anticipated some problems a year ago: “[T]he extent of the problematic overlap between the artificial, perforated lines created by Finisar…is uncertain. The basic idea was to break up the company into pieces, and potentially sell them off. However, in doing so, a lot of synergies get thrown away in that the company is not fully taking advantage of the strengths of its personnel. With Finisar having gone down this road for a while, it may be doubtful as to whether II-VI can undo all of the damage….” Also at an EPIC conference in October, we discussed that the...

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II-VI: Ordinary “Intel” of Optoelectronics

October, 2019

During the firewall period, waiting for the merger with Finisar to be completely approved, from the CEO of II-VI, Chuck Mattera, people in the industry got the impression that he expected the combined company to become kind of the “Intel” of optoelectronics. Putting aside the fact that the actual Intel has played a prominent role in helping to destroy the data communications optical ecosystem, and perhaps is not the best example to use in that context, II-VI will be getting on a me-too line of large component companies, which have either begun the transition from modules to chips or are involved in contemplating the idea. Broadcom and Lumentum are the most notable players. There is Sumitomo, which is similarly looking to both move down the food chain, and we would not be surprised if it decides to offer VCSEL bare die in a big way for data communications applications. In addition...

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Lumentum: Cloistered Management Method

October, 2019

  In the early 1980s, the concept of “Management By Walking/Wandering Around” or MBWA reached the height of its acceptance as an effective means of remaining bonded with lower-level managers as well as with other workers, and it had the added benefit of addressing significant problems beneath the surface before they got out of hand. It was practiced by Greg Dougherty as CEO of “Oclaro,” who would often just go to various offices unannounced, and such actions undeniably helped to bring the optics company back from the brink of bankruptcy, including not getting blindsided by unexpected market shifts. Conversely, according to our intelligence, Lumentum Holdings’ Alan Lowe, the CEO, is highly dependent on receiving the bulk of his input from a very tight, inner circle of top-level executives (although we were alarmed to hear that he does not tend to be receptive to communication...

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Infinera’s XR Optics: “Fat & Happy” Front

October, 2019

At first blush, it seems illogical for Infinera, a supplier, which has been fighting for its survival, to be promoting a revolutionary change in the aggregation and access portions of the optical marketplace. However, fibeReality now believes the company chose to amend its “Tellabsation” counternarrative because manufacturing its own proprietary 800-gig DSP daughter card (using subcarriers), with similar functionality to the AC1200 from Acacia Communications (planned to become part of Cisco Systems) in order to compete with Ciena’s WaveLogic 5 Extreme, is deemed critical to the future success of the Groove platform as well as for the current leadership to maintain at least a minimum amount of credibility. While nobody should bet the farm on XR Optics, given the challenging hurdles that need to be overcome, the effort would not only make the transition away from being a PIC-based...

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3DS VCSELs: Instantaneous Bubble Burst

October, 2019

  fibeReality retraced the last three years of the six-inch 3D Sensing (3DS) VCSEL wafer marketplace as part of our preparation efforts in presenting at an EPIC conference last week. As a result of our latest intelligence gathering efforts, it became evident that simultaneous to the great achievement by Lumentum Holdings (along with its partners) in shipping more apertures within a two-month period in the fall of 2017 than in the entire history of such devices, there was the beginning of a marketplace “pop,” which gradually worsened. In particular, there were a couple of vital matters left out of what otherwise seemed to be a very successful story. After initially dismissing Finisar because it remained stubborn about sticking with the four-inch VCSEL diameter, Apple was forced to go back to the supplier to renegotiate a contract to obtain a rather substantial number of wafers at...

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Additional Upshots at Dublin Optics Show

September, 2019

As a complementary piece to our last article, “Throwing Down the Gauntlet at ECOC 2019,” we provide some other final thoughts on the conference, including the following 10 points: 1.     While switching, particularly the all-optical variety, has never taken off in a big way, it was most conspicuously mentioned by Microsoft, as a portion of a very short presentation focused on a general cross-disciplinary approach with developments in the cloud. Actually, the operator brought up the concept of an extremely quick wavelength router it has touted in the past as it probably thought it had nothing to lose by mentioning it to a big crowd of optics engineers. It was then discussed by Mellanox Technologies in relationship to higher bandwidth being enabled at Web 2.0 companies with such scalable devices. Later, Glenn Wellbrock, from Verizon mentioned the use of a photonic switch in trials...

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Throwing Down the Gauntlet at ECOC 2019

September, 2019

  On our second blog, it was mentioned that fibeReality tried to get formal confirmation on the coming death of COBO as well as challenged the usual rosy view of silicon photonics at the same workshop. Moreover, there was our disappointing take on the subsequent event in the same conference room. We also had a mixed reaction to Infinera’s XR Optics concept. In this article, we will discuss several other provocations, which took place during Market Focus sessions. Certainly, the most stunning reaction to one of our questions in Dublin came from Tom Williams, Vice President of Marketing for Acacia Communications, who was discussing the possibility of the marketplace taking too many small steps in achieving 400G without looking to immediately get up to 1.6 terabits in the future. Given that Cisco Systems’ previous acquisition of the DSP provider at 100G, CoreOptics, did not really...

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Finisar: Agonizing Wait to Cultural Disaster

September, 2019

  Some previous assumptions go out the window, and certain, subsequent actions make greater sense, with our current understanding that Finisar’s destiny was out of the hands of its founder, Jerry Rawls. He did not voluntarily retire, but was forced to step down, from the CEO’s office, by the board of directors of the corporation. Looked at in this new context, we would assert that Rawls could have likely saved himself by just using a little imagination in making the financing work to enable a purchase of Oclaro. The appointment of the last CEO was only for one purpose: to sell the firm (of course, his quick dismissal validates that claim). Now while the trade conflict between China and the US allows the people working at Finisar to wish that approval for the deal with II-VI will not happen, it is probably inevitable that the culture of the former will erode anyway, whether it...

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COBO: Mismanaging One Person’s Power

September, 2019

At OFC 2019, this writer happened to be sitting next to an analyst, who is with what is officially considered, by certain people in the market, as an influential research firm. I told this individual that at a couple of relevant presentations from Microsoft, including one from Jeff Cox, Partner Director Network Architecture, that I did not hear the term, COBO mentioned – and that our company position was that Brad Booth, Principal Network Hardware Manager, at the cloud player, was totally responsible for pushing that concept. The response was, “Well, you know that Cox is Booth’s boss.” (Of course, I nodded affirmatively, while thinking to myself, “Wow, I am supposed to assume that I was taken to school!”) The reason why I did not ask Cox at that other session about COBO was because I was more alarmed by his insistence that there would not be a need for MultiMode Fiber...

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Tibit: Last “Telecom Valley” Optic Hurrah

August, 2019

  Over the years, nobody can deny that some of the most prominent “Petaluma Telecom Valley” entrepreneurs/engineers were courageous in taking on the huge, technological challenges, in the inherently hardest sector to generate meaningful and sustainable profitability, from the perspective of both optical infrastructure suppliers and service providers: the access portion of the network. It has always been difficult because much of that “last mile” involves residential traffic across a range of incomes, but regardless, there has increasingly been an overall propensity on the part of these subscribers, in general, to expect superior service, without a significant rise in the price. There has also been the classic struggle to gain easy, direct entry into these homes. Nevertheless, the Petaluma approach was to take the new technology to the next stage of complexity, while still...

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Lumentum: Early DCO Departure Projected

August, 2019

As fibeReality addressed in a recent article, “12 Aftershocks From Cisco-Acacia Quake,” one of the optical suppliers, which will experience the negative effects the longest, is Lumentum Holdings. The bottom line is that at least quasi-ownership of the DSP technology is a must in order to effectively compete in the DCO space, and it becomes even more critical in moving to higher data rates. The combination of the new game plan of “the bulk” [of another of $40 million in synergy costs]…be[ing] realized towards the tail end of [the next five quarters],” along with “DCO shipments…expect[ed]…to grow through the fiscal year and be a meaningful part of our telecom revenue over the next several quarters,” appears to demonstrate that Lumentum intends to start withdrawing from that coherent space relatively quickly. We also trust that having a true CFO came in handy in making...

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MACOM: Engineers’ vs Street’s Perception

August, 2019

fibeReality has discovered a definite gulf in opinion on the prospects for MACOM Technologies Solutions’ new CEO, Steve Daly (along with the other top-level executives), to turn the company around, between the engineering crowd, which is inclined to be pessimistic on its future, and Wall Street analysts, who are leaning in at least a cautiously bullish direction. Such a dichotomy, one way or the other, is hardly an uncommon occurrence, when it comes to the evaluation of optical vendors. As we discussed in the past, financial institutions (as well as the overwhelming bulk of market research firms) apparently do not tend to have adequate long-term relationships with trusted, independent sources of information, particularly technologists, especially on the all-important, demand side of the marketplace. In the case of MACOM, we have been impressed (and even a bit shocked) by the visceral...

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12 Aftershocks From Cisco-Acacia Quake

August, 2019

  At least a dozen marketplace reverberations of differing magnitude can be discovered from what was an indeed an earthquake of a deal announcement by Cisco Systems, in that worse than the irritating amount of perhaps, unprecedented pandering in the industry, was its destructive nature on a significant number of suppliers and users. fibeReality provides the following 12 impacts: 1)    Cisco’s Technology Conflict “Luxtera” and Acacia each have expensive 400G DR4 R&D programs. 2)    Analysts Furthering Cisco’s Myth Given its powerful PR machine, some analysts have heavily bought into a long-term, vertical integration narrative in optics by Cisco, such as that NeoPhotonics could be a potential acquisition candidate. (Of course, lasers did not fit into the model, established by Cisco, in cornering the market, during the early 100G days, and the one point that should be...

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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...

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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...

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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...

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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...

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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...

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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,...

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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...

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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...

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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,...

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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,...

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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...

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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...

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