Yesterday Infinera (NASDAQ:INFN, news, filings) announced a major shift in its product development stance toward 100G. They now plan to ship a 100G system based on coherent transmission in 2012. The new system will be capable of supporting 8Tb/s per fiber (80 wavelengths x 100Gb/s each), and will feature next generation PICs in 500Gbps increments (5x100Gbps) with ultra-longhaul reach as well as the cost savings derived from photonic integration.
Prompting this product acceleration was a recent successful 1600km test in which Infinera successfully transmitted a 100G signal using coherent modulation technology. Until now, all eyes had been on the timing of Infinera’s 40G product release, which has appeared to be lagging the current market opportunity. The company still expects to have a 40G product available in 2011, but they see 40G as having a narrow window – something others have been saying for a while of course.
Therefore, their preference to leapfrog to 100G is not a shock, the main surprise is the speed with which the technology will apparently lend itself to the company’s photonic integration and therefore improve the pricing at which 100G can be deployed. With 2012 being just when 100G will likely really start to see widespread deployment, a 100G coherent PIC solution looks rather formidable. Assuming of course that they deliver on this timetable.
Nevertheless, the effects on their revenue growth in 2011 should be watched, as their customers may choose to leapfrog 40G alongside them, or else buy it elsewhere in the meantime.
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One thing that caught my attention was Infinera’s explanation that they were actually halting further system integration work with the 10x40Gb/s PIC and starting over with a discrete component version of a native 40Gb/s DLM blade but with coherent transmission. This replacement version is to come out in the same timeframe (2011) as the original PIC-based 10x40Gb/s product.
In the aggregate, it is somewhat bad timing that their Ottawa facility achieved their coherent transmission breakthrough with their 1Tb/s dual 500 Gb/s PIC DLM before the 10x40Gb/s product was able to get to market. The Company claims that they can leverage off of that effort and that there has been no disruption of their PIC strategy.
It just goes to show that when a company is dealing with long development times, there is not much wiggle room for perceived or actual errors in strategy
I suspect the market’s response to the 10x40Gbps product wasn’t looking all that strong either, and they felt a need to tweak that strategy. However, a 2011 timeframe doesn’t mean it isn’t three quarters later, we will need to see just what the timetable really is.
I think there may be more to the story than meets the eye. The 10×40 approach is top-heavy with muxing/aggregation stages, which the company recently acknowledged was a contributing factor to undesirable latency for some types of applications. You may recall from another, recent release, that they have taken measures to circumvent the complexities of so many multiplexing stages in silicon for certain types of applications by introducing an all-optical bypass (or mostly optical, as I’m not exactly sure about the texture of the fix) in special situations that require low latency. For now, those special situations are limited to the zeitgeist surrounding algorithmic, high-frequency trading, but with time similar low latency requirements will also begin showing up in a growing number of cloud applications between disparate data centers and user populations as well, IMHO.
frank@fttx.org