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400GbE Spectacular Fantasy

April, 2015

At least in fantasy football, the actions are based on activities that genuinely exist in the present world. At a time when the telecom/datacom optical market is arguably as bad as ever, it is unseemly for a relatively large amount of capital to be spent on engineers traipsing around the globe developing standards based on technology that is not real or proven. Using history as a guide, the lion’s share of the individuals attending these meetings will never see 400GbE in volume while they are still on the job. While we complimented Finisar in our last blog article for advocating NRZ, why did it seemingly take anyone on the IEEE P802.3bs 400 GbE Task Force a year to formerly bring up something so fundamental – the advantage of using existing lanes in achieving higher data rates (for example, 4x10G, 4x25G)? It apparently took the same vendor the same amount of time to be the first to prese ...

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Avago/Emulex/Broadcom: Storage Target; Impact on Finisar

May, 2015

With the acquisitions of Emulex and Broadcom, Avago Technologies is clearly shifting more of its focus from the less appealing optical components space to the very attractive storage business. Not only does the market size of the latter substantially dwarf that of the former, the storage companies went from way too many players in the 1990s, to an ample state of consolidation – with both hardware drive producers, Seagate and Western Digital, currently dominating in terms of revenue. While this state of affairs may be threatened with media’s changeover to solid-state drives, at least the optic componentry firms had a prominent business model that was well established last decade that they could have adopted. There cannot be a lot of optimism that the ridiculous lack of rationalization in optics will change anytime soon. With capital being provided by large end-users for newcomers, there c ...

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Verizon/AOL: Bypassing Title II with New Internal Infrastructure?

May, 2015

“The FCC’s chairman “said that he doesn’t see a role for the FCC in reviewing Verizon’s...recent proposed acquisition of AOL....’ I don’t think AOL has any [FCC-issued] licenses, so it would not trigger anything in that regard...,’” according to Telecommunications Reports. We at fibeReality believe that the fundamental unfairness of an Internet service provider being treated as a utility is at the heart of the AOL acquisition and we find the various other explanations that have been given in the market to be unpersuasive. First of all, the idea that Verizon would buy an antique as an initial step to competing directly against Google and Facebook seems absurd – Verizon craves full control of its networks currently enjoyed by these behemoth content providers. It has been over 30 years after the Ma Bell divestiture, and in a way, Verizon is being forced to go back to square one. The carrier ...

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To Infinera: Let Transmode Run as Freely as Possible

June, 2015

Infinera would be better off allowing Transmode Systems to operate as an independent division than to integrate it much into its own corporation. Despite all of the assertions to the contrary, their cultures could not be more unalike – the former, a high-profile, Silicon Valley-type of company with people consistently logging long hours, oftentimes grappling with very quick deadlines – the latter, a Swedish, low-key, usually pragmatic kind of firm with historically fixed, lengthy timeframes for R&D completion, with a strong belief in the necessity for taking long vacations to recharge one's batteries as well as to help maintain a relaxed demeanor in its development work. The biggest difference is that Transmode has been going after the sweet spot of the metro DWDM market – targeting the Tier II and below types of service providers and other customers in which there has not has been as mu ...

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InnoLight IPO: Google's Vertical Integration Without a Mess

June, 2015

We have been pondering the question of what happens when emerging optical component vendors, being financed by mega-data center operators to achieve the lowest cost possible, need more money, especially for new research and development purposes. The best answer, which is starting to become self-evident, is for the componentry company to go public, because with the undeniable cachet of a Google-backed firm (in the case of InnoLight Technology, Google Capital), the highest valuation can likely be achieved. The perceived worth of these newcomers in being purchased by a larger competitor in this presently unattractive business would apt to be much lower as there would probably be a considerably higher level of scrutiny given to matters like the potential to sell their devices to other than their “captive” buyers. For Google and other prominent enterprises, the IPO route for these firms provi ...

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