Quantum Bridge Launches into the Millennium
currentanalysis.com
Report ID: 200110-0001-01.NV Current Perspective Rating: Positive
Report Date: January 10, 2000 Vendor Importance Rating: Very High
Analyst: C. Nicoll Industry Impact Rating: Moderate/High
REPORT SUMMARY
Event Summary: VIEW PRESS RELEASE January 10, 2000 -- Quantum Bridge Communications, Inc. unveiled its flagship Optical Access
System designed to eliminate the bandwidth bottlenecks that exist in the public network's
first mile. Consisting of the QB5000 Optical Access Switch (OAS) and the QB100 Intelligent
Optical Terminal (IOT), Quantum Bridge's Optical Access System enables competitive service
providers to economically bring high bandwidth e-economy services to businesses of all sizes.
Employing Optical Access Networking technologies, the Quantum Bridge solution provides
businesses with services ranging anywhere from 1-100 Mbps, to dedicated wavelengths, up to
nearly 100 times the speeds provided by existing solutions such as T1 lines, xDSL, or cable
modem technologies.
Analytical Summary: We are taking a positive stance on Quantum Bridge's new optical access products. Quantum
Bridge has successfully targeted the 'optical bypass' market. We believe Quantum Bridge's
new products will have a moderate to high impact on the network access industry, as the
company is offering a competitive solution at price points that are better than those
announced by its competition. The launch of the QB100 and QB5000 is of very high importance
to Quantum Bridge, as this is the company's initial product launch. The company has
strengthened its product launch by naming its initial customer, Comcast, and we expect to
hear of additional customers in the near future.
ANALYTICAL ASSESSMENT:
Current Perspective Rating: Positive.
We are taking a positive stance on Quantum Bridge's new optical access products. This is the
company's initial product launch, and thus it is of very high importance to Quantum Bridge.
The company has strengthened its product launch by naming its initial customer, Comcast, and
we expect to hear of additional customers in the near future. We believe Quantum Bridge's
new products will have a moderate to high impact on the network access industry, as the
company is offering a competitive solution at price points that are better than those
announced by its competition. However, pricing of the individual units has not been
announced.
Quantum Bridge has successfully targeted, at least with its first announced customer, the
'optical bypass' market. Service providers such as cable operators have long bypassed
commercial business opportunities without a strong business case for addressing these
potential customers. Quantum Bridge and some other startups such as LuxN have developed cost
effective solutions that enable service providers to utilize unused fiber resources (as in
the Comcast application) or to extend existing fiber installation the last mile or so in
order to provide services. Most of the new locations being addressed are not suitable for
SONET due to the expense of SONET equipment.
One of the features that makes Quantum Bridge's technology attractive to service providers
such as Comcast is the ease of installation. These providers can utilize their existing
service personnel, without major training, to install the Quantum Bridge QB100 remote unit.
Retraining has to be a consideration whenever installation of new equipment is being
considered. Clearly, Quantum Bridge has considered the personnel that would be installing
its systems.
There is not a direct competitor to the Quantum Bridge products, although we believe that
service providers that would evaluate Quantum Bridge will also look at Atmosphere Networks
and LuxN. It is possible that Alidian could be added to this list, although we do not expect
a product announcement from the company for several weeks. A direct pricing comparison
between Quantum Bridge and competing products is not possible, as Quantum Bridge did not
release component pricing. However, Quantum Bridge stated that in the installation of 200
locations, it expects equipment costs to be approximately $7,000. This puts Quantum Bridge
between Atmosphere and LuxN in terms of pricing, although features do not directly correlate.
Atmosphere and Quantum Bridge provide switching and add-drop capability, while LuxN only
offers transport services at higher speeds and capacities. The Atmosphere CPE unit is the NTU
300, which provides two T1 and one 10 Mbps Ethernet interface at prices starting at $5,000.
The LuxN WavPortal is also targeted at the single-user CPE location and supports NxT1 up to
12 Mbps along with 10/100 Mbps Ethernet at prices under $10,000. We would expect the QB100 to
come in close $4000. The Atmosphere CO unit, the FSN 1200, provides switching and add-drop
functionality that the LuxN WavStation CO unit does not, at a price starting at $10,500 for
the FSN1200 and $25,000 for the WavStation. This is not a direct feature to feature
comparison, but service providers that are looking at optical network access options are
likely going to be looking at Atmosphere, LuxN, and Quantum Bridge.
Vendor Importance Rating: Very High.
We feel that the initial product launch of the QB100 and QB5000 is of very high importance to
Quantum Bridge.
· Quantum Bridge needed to launch its new products in order to define its market impact, and
it is doing just that by also announcing its first customer installations. Quantum Bridge is
addressing the optical access market by efficiently providing services needed today (such as
T1 connectivity) over an optical infrastructure.
· Quantum Bridge needed to show that a core part of its value proposition -- that service
providers would install fiber to a site and use Quantum Bridge's technology to deliver
services -- is accepted by the market. The company's customer reference supports this
position.
· Quantum Bridge needed to show that its lamba splitting solution is not only different from
competing vendors' solutions but also better. The optical access market is one of the
hottest markets and we expect it will continue to be highly competitive.
Industry Impact Rating: Moderate/High.
Quantum Bridge's first two products will have a moderate to high impact on the carrier access
industry, and as such, we anticipate that other vendors in this market sector will need to
take action in the near term.
· Service providers that are using Quantum Bridge's technology are laying fiber instead of
copper. Since the future of networking is most likely going to require higher speeds and
capacities, installing fiber now is a way of 'future proofing' a carrier's access networks,
especially since the access line is usually the bottleneck.
· Even if there is a cost differential compared to competing copper-based solutions, service
providers are likely to be more willing to install Quantum Bridge's solution initially under
the expectation that they can easily grow Quantum Bridge-based services in the future due to
the flexibility of these new products.
· Competing vendors that also have optical access solutions will need to position their
solutions compared to Quantum Bridge's solution, particularly in the area of provisioning and
routing. Different service providers have different requirements, so it will be important to
clearly identify competitive differences.
· End users should start to see greater availability of basic services, such as T1s for voice
or data and the appearance of 10/100 Mbps Ethernet extension services, as demand increases.
The optical access networks provide a smooth bridge between the T1 and T3 services that many
companies find too expensive or just unavailable.
Competitive Positives:
We are taking a positive stance on Quantum Bridge's new optical access products, and we see
the following competitive positive points:
· Quantum Bridge is positioning itself either to leverage dark fiber or to extend fiber runs
in order to offer services that are not being considered today. Comcast will leverage
Quantum Bridge and its unused fiber to offer business services to locations it once bypassed.
· Quantum Bridge's solution centralizes the routing and data services at the service provider
POP rather than at the customer's location. Some service providers will like the fact that
all traffic is essentially circuit switched back to the CO, where voice and data service can
be applied.
· Quantum Bridge's QB100 should be simple to install and provide a protocol-transparent
connection using industry standard T1 and Ethernet connections. All routing and monitoring
functions are centralized.
· Quantum Bridge has established its list prices to enable service providers to price
services with less than a one-year payback. We would expect that at usual discounts, payback
closer to six months should be achievable, which should help expand the potential market for
Quantum Bridge products.
Competitive Concerns:
While we are taking a positive stance on Quantum Bridge's new optical access products, we do
have some areas of concern:
· Quantum Bridge has pushed the routing and traffic prioritization capabilities to the
central office or POP rather than to the CPE and the POP. Getting an end-to-end view of
performance requires linking the CPE router and Quantum Bridge 5000 SLM stats, which will
likely result in gaps in reporting.
· Will service providers look to integrate their protocol services (such as voice switching
and SLM services) with their transport systems? Should this become a trend, Quantum Bridge
(and most of its competitors) will need to retool to become more SLM aware.
Vendor Actions:
We suggest that Quantum Bridge consider the following actions over the next six to 12 months
in order to strengthen or improve the viability of its new optical access products:
· Quantum Bridge needs to be establishing its distribution channels while it launches its
products. New companies usually cannot afford the lag time between launching new products and
the time it takes to prime a new channel.
· Quantum Bridge needs to make sure that it meets or beats delivery commitment dates. So far,
the company is doing exactly that, and it needs to continue.
· Quantum Bridge should continue its customer 'win' announcements in order to help establish
its solution as being quickly accepted by the market. Customer wins, particularly by
recognizable companies such as Comcast, tend to get the attention of other potential
customers.
· Quantum Bridge needs to work more closely with the IP/ATM switching vendors' SLM and QoS
capabilities. This may be best accomplished by working with Concord or Lucent (VitalSuite)
to integrate Quantum Bridge's reported statistics with those of the other vendors.
Competitor Actions:
As Quantum Bridge's new products should have a moderate to high impact on the optical access
market, we anticipate a response from Quantum Bridge's competition:
· Atmosphere Networks should highlight the advantages of using ATM as a transport protocol,
as well as the ability to manage service level agreements on the end user site, without
having to rely on the end users' router or switch. Currently, Atmosphere is focused on ATM
Circuit Emulation Services, which is SLM transparent.
· LuxN should look at scaling down its bandwidth services in order to compete more directly
with Quantum Bridge, which not only will create a more competitive atmosphere but will also
lend credibility to the new optical access market. Increasingly, we expect LuxN to be
competing with Quantum Bridge.
· Alidian, which is expected to launch its products in mid Q1 2000, should be working to get
its beta references and product launch together in order to take advantage of the recent
interest in optical access networks, as well as market the driving factors such as the
announced AOL/Time-Warner merger.
· MAN transport vendors that are addressing optical access do not have a solution to bring
native mode services to the optical ring. Chromatis, Dynarc, Sycamore, and larger vendors
such as Ciena, Lucent, and Nortel should be looking to companies such as LuxN to bring
traffic to their optical switching systems.
Target Markets: Cable companies, incumbent telcos, Optical Metropolitan Area Network providers
User Actions:
We are taking a positive stance on Quantum Bridge's release of new optical access products,
and we suggest that service providers (particularly cable companies and other local optical
network providers) consider the following actions:
· Service providers that either have dark fiber over which they would like to enable services
(such as QAB customer reference Comcast) or would like to find a way to extend
non-SONET-based optical services to smaller sites should be looking at Quantum Bridge and its
competitors.
· The incumbent telcos (such as Bell Atlantic and U S WEST) that are increasingly using
fiber MAN's to distribute services should be looking at technology such as Quantum Bridge's
to extend the benefits of fiber to smaller sites that do not justify, at least initially, the
installation of a SONET mux.
· Cable operators with wiring plants that pass local business sites can use Quantum Bridge to
capture new business. Although most businesses do not need traditional cable services, cable
operators with unused fiber resources can implement business-class services using the Quantum
Bridge solution.
BACKGROUND INFORMATION:
REPORT ID: 200110-0001-01.NV
EVENT: Quantum Bridge Delivers Industry's First Optical Access System
REPORT TYPE: Competitive Intelligence Report
TYPE OF EVENT: Product/Services
VENDORS: Quantum Bridge Communications
COMPETITORS: Alidian, LuxN, Atmosphere
MARKET SEGMENT: Carrier Access
TECHNOLOGY: DWDM, Optical
TARGET MARKETS: Cable companies, incumbent telcos, Optical Metropolitan Area Network providers
DATE OF EVENT: January 10, 2000
DATE OF ANALYSIS: January 10, 2000
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