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Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: Frank A. Coluccio who wrote (17158)	10/11/2006 5:13:58 AM
From: Frank A. Coluccio	Respond to of 46821

Death of the All Optical Network Oct 11th, 2006 [FAC: How could I resist posting this blog entry after what I stated yesterday in Message #17158 (uplinked) concerning Infinera?] networking.seekingalpha.com Andrew Schmitt submits: Privately held company Infinera took the bold and stunning risk of angering the Gilder priesthood at the Telecosm conference by illustrating that an all optical network was not the future and not the best solution. As a comm semi guy who will always have a soft spot in his heart for TDM circuit switches and electrical crossconnects, it was a message that resonated with me. But to the assembled congregation, still clutching to a vision of an all optical future, it was analogous to Galileo arguing that the sun did not revolve around the earth. JDSU (JDSU) has made a concerted move away from the optical module business and towards subsystems like ROADMs (reconfigurable optical add-drop multiplexers) and EDFAs (Erbium-Doped Fiber Amplifiers) . It is even rumored that JDSU has lost future 10GE module contracts at Cisco (CSCO) (this is single-sourced, any confirmation welcome) so they may have passed the point of no return. JDSU pushed hard during the panel that the future was indeed all optical, and that they were going to provide the building blocks to do it. Intel (INTC), as I suspected, may be exiting the commodity module business, buy they have tee-ed up a big effort to do pure optical research. The UCSB/Intel announcement was just a small step, even though it received a disproportionate amount of media attention. Kevin Kahn opened my eyes to what Intel is doing outside of the commodity optical products that I used to solely associate them with. This is worth following. Infinera laid out why O-E-O makes sense and that they have the most efficient solution as a result of their ‘optical chip’. I remember a meeting with Infinera (Actually called Zepton before a savvy marketing guy changed the name of the company) way back where Drew Perkins laid out an array of optical modules on the conference room table. He pointed at each one, and said that they were way too big with some very colorful language. The vision at Infinera appears to be the same as it was then. High integration creates high reliability, high port density, and low per port cost. I think people were mortified to find out that Infinera, the poster boy of Telecosm 2.0, is not an all-optical player This illustrates the depth to which people have gone to really understand what this company is doing, and I realized I didn’t know what sort of electrical switching function resides inside their system. I had fallen under the spell… The best part of the discussion was the limited debate between the merits of the ROADM and O-E-O. This was a good panel, with excellent participants and should have been allotted more time simply because much time was needed to explain the differences between what Infinera does with optical-electrical-optical (O-E-O) conversion and how ROADMs work. Some carrier input, particularly from a non-Bellco perspective, would help. This topic will be just as relevant next year and should be revisited. ------ FAC

To: Frank A. Coluccio who wrote (17158)	10/11/2006 10:03:30 AM
From: axial	Read Replies (2) \| Respond to of 46821

"In fairness, I still believe he's on the right track w.r.t. the ultimate dominance of the lightpath model, but like other aspects of his testimony, he's talking in the present tense about technologies that won't be ready for mass market adoption until sometime beyond 2010." Yes. We're still going through a transitional phase, IMO. Saying one thing is like another can be mistaken, but I often compare the present to the mid-1800's, and the transition to rail. There were all kinds of warnings about the dangers of this newfangled technology. All kinds of caution - yet rail is still with us. The advent of rail had profound effects on nations that recognized the potential - especially, their possible impacts on society and national interests. In both Canada and the US, the transcontinental buildout was marked by government support and incentives, spectacular corruption, mismanagement, and stupidity. But the concept was right, and it lasted. Railways turned out to be successful and pervasive transport technology, with many variants, which will probably still be in use 200 years from now: especially as energy costs climb. That's the key word: probably. There's nothing wrong, nothing imprudent, in committing to a technology for which you can foresee no superior alternative. "... but also confusing in places. For example, what did you mean by "denigrate the per-bit life-cycle cost of fibre? In any event, wired or wireless, assigning attributes to bits can be considered a fool's game at times, when you think about it." Agreed, a fool's game it can be. Perhaps I should have been more cautious, and stated that among wired technologies, optical's life-cycle cost per bit is attractive, and getting better. But the evaluation shouldn't end at purely technical criteria, else the hideous cost of building rail through mountains would have seen track end at the Rockies. In a non-commercial sense, there were valid reasons to support the cost, and complete the buildout. Once the price was paid, the benefits far outweighed the costs, which seemed prohibitive. The value of a bit depends on the evaluation criteria. It also depends on whether there is a market. The societal criterion that needs to be satisfied is whether the network allows the optimal (balancing all the criteria) flow of bits to their markets. Optical has (and will continue to have) alternatives, as did rail. Through time, the balance among competing technologies will change. I'm pleading the case for a technology that doesn't satisfy all the criteria, any more than rail does. The core of the argument is that it satisfies so many demands for the transport of bits, in the present and the foreseeable future. It's not everything to everyone, but like railways, it's a damn good bet as transport technology. We should use it. We should make the technology available and widely dispersed, with government legislation, support, and incentives where necessary: just as was done with rail, air, and highways. Jim