A Kaiam Strategic Partner: Google?

September, 2014

Concerning the recent $35 million announcement by Kaiam of equity funding, our intelligence indicates that one of the two strategic partners is Google. We also think the other partner is Microsoft. In addition, we believe that the total valuation is two to three times revenue -- so over $70 million. While Kaiam has clever packaging, we are not convinced that it has the lowest cost in the market. Nevertheless, the supplier has benefited from getting out there early in the data center/datacom space. It is likely that it owns the 10x10 business in that sector. Unquestionably, signs of two giant enterprise firm funding Kaiam may be about ensuring direct access to unique 100G technology. Perhaps it is the vendor’s Hybrid Mixer PLC – and/or maybe something else that could possibly be on the drawing board that involves a coherent, serial 100G device. More practically speaking, there is a...

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Acacia Communications IPO: A Compelling Story?

January, 2016

The optical industry was standing by for Acacia Communications’ S-1 for a lengthy amount of time, and there had been some recent conjecturing that it may not happen at all. The stakes were clearly high in that it appears to have been the only VC-backed 100G firm. While Acacia has made impressive penetration into the market with superior DSP technology, the question surrounds what it can do for an encore that would be good enough to attract investors in a meaningful way on Wall Street. Certainly, the process in Acacia going public was hardly done with a lot of fanfare, reflecting the current relatively low number of IPOs occurring in the technology sector in general, and the close to non-existent activity in the fiber optic space. The vendor had filed confidentially back in August (actually a common practice now for all companies with yearly revenues of less than a $1 billion). Then,...

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Ciena’s New Obsession with Vertical Integration

February, 2016

Ciena’s purchase of several assets from TeraXion represents the first time that the system player has acquired just components as opposed to full systems from an outside vendor, symbolizing an evolving shift in philosophy over the last several years away from less of a reliance on merchant componentry suppliers to more internal development and construction. While large optical vendors in general have somewhat adopted vertical integration strategies as the market has moved to 100G and coherent technology, there seems to be a particularly higher degree of emphasis by Ciena on the practice in recent years, especially relating to added functionality on a chip set, which was apparently influenced by the purchase of the Nortel Networks division. However, a potential problem could be that the top leadership at the transmission equipment giant may be too lax about protecting its proprietary...

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Acacia Will Likely Push 400G DSP

September, 2016

The message that the Street may be going way overboard with Acacia Communications’ valuation, let alone its new secondary offering, may be beginning to resonate. For example, one can read, “Acacia: A Company That Will Need To Be Resistant To The Ire Of Investors.” Yet, the money to be made by at least certain institutional investors with the price going up and down while still remaining above $100 a share, was obviously deemed to be insufficient. We assume that just as with the first offering, a narrative will need to be constructed in order to support the second issuing of stock, and we suspect it may be that the company will be well-positioned with funding to support and potentially dominate the 400G coherent Digital Signal Processor (DSP) space, just as it had done at the 100G rate. While some 200G applications are emerging, suppliers such as NTT Electronics (NEL) and ClairPhy...

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Metro 100G “Heresy”

December, 2016

In a 2015 post discussing an OFC presentation of a well-known engineer in the business, titled “ROADMs Instead of Metro 100G Systems?”, the response from a technologist was, “Very interesting view, some may cry heresy.” fibeReality has been consistently rather bearish on public network deployment of metro 100G gear, including an earlier article: “Absurdity of Stressing Metro 100G Now,” posted in January 2015. During this month, we pointed to Cisco Systems’ silence on the matter as well as on our daily update page, noting Ciena stressing “the blur into both the convergence of long-haul and metro.” Although within the ill-advised endorsements of an optical supercycle, there is still a tendency to mention as one of the major contributing factors, high-end deployments of metro gear at service providers, the evidence continues to accumulate that the projections by some...

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