By Scott Schube, LightCounting, LLC -- The overall mood at this year’s OFC/NFOEC show was cautiously optimistic, as a number of new products and technologies made their way to market and new data center network providers offered new opportunities and challenges for the industry. Here is a summary of some prevailing trends at the show:
100G is all the rage: As far as products go, 100G was the story of the show. New 100G product announcements demonstrated the increased levels of integration and size, power, and cost reduction that we’ve come to take for granted from industry innovators.
On the client side, Avago, Finisar, NeoPhotonics, Oclaro, Sumitomo, Source Photonics, Oplink, Kaiam, EFFDON, and others announced and/or demonstrated CFP or CFP2 modules, while Cisco introduced a competing CFP2-like module called CPAK. Several vendors, including silicon photonics stalwarts Kotura and Luxtera also showed long-reach 100G QSFP+ modules.
On the line side, system vendors continued their return to optical product development with a number of 100G line card demonstrations. Optical component vendors demonstrated a range of new products for 100G coherent links, from the new even smaller micro-ITLA form factor for discrete tunable laser modules (Emcore, NeoPhotonics, JDSU, Oclaro, OFS Fitel) to 4x28G and 4x32G transmit ICs (Broadcom, GigOptix, M/A-Com, Triquint), to DSPs (ClariPhy), and a host of others.
Software-Defined Networking (SDN): The hottest trend at the show: No panel at the conference was complete without a mention of Software-Defined Networking. This concept, adding more intelligence and flexibility to the network to quickly and seamlessly reconfigure based on traffic needs and profiles, is not new but is apparently gaining great momentum.
Different companies have different definitions of what SDN means and where its greatest value lies, whether more flexible protection schemes, completely on-demand bandwidth provisioning, or more. The new requirements implied by SDN flow down to the component level mainly for ROADMs, where the push for colorless, directionless, contentionless ROADMs continue.
In this area we saw some new product announcements at the show, notably JDSU and Finisar’s announcements of dual 1x20 wavelength selective switch components, which along with other ROADM building blocks eventually will help enable the SDN vision at the optical layer.
Data center disruptors offer new opportunities and challenges: Over the last couple of years upstart data center operators like Google, Microsoft, and Facebook have exerted an influence on the industry far beyond their raw purchasing power in optics, and this year was no exception.
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Representatives of these and other data center companies spoke on a number of panels outlining their view of future trends, network needs, and requirements. The main need for these companies from the optical community seems to be massive, cheap connectivity, as their network topologies become ever more flat and highly interconnected.
The data center disruptors also weighed in strongly in favor of software-defined networking, which some of them are already implementing in some fashion within their data centers.
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LightCounting LLC's latest report on 40G and 100G data center interconnects addresses these trends in depth, offering an extended version of forecast for Ethernet and Fibre Channel transceiver for 2013-2020.
Silicon photonics 'Rump Session': While silicon photonics technology has been in the works for many years, it hit fever pitch at OFC/NFOEC this year. Some of the excitement has included hype which LightCounting addressed in our February 14 newsletter. Then, an equity analyst company, Jeffries, amped up the hype to an absurd level comparing Silicon photonics to the transistor replacing the vacuum tube.
Dan Kuchta, IBM Research and Michael Hochberg, OpSiS, moderated a Tuesday evening Rump Session with a challenge that “some of the hype has outpaced the technology." The large room was hardly large enough as hundreds packed in to join the open mike debate. LightCounting first asked whether the subject should be silicon photonics or photonic integration as other approaches such as InP have also shown good promise, but none are yet threatening VCSELs as has been suggested.
With so many 2-minute viewpoints expressed, themes were hard to define. Many seemed to agree that more reliability data is needed, especially when adding new processes into the CMOS fab model. The same goes for proving low cost. One speaker said he could not write checks to a CMOS foundry to get a module. Another said they introduced photonic integration for value rather than cost reduction, a viewpoint LightCounting can endorse.
No one argued that the industry has reached any consensus on an approach to silicon photonics and all agreed there are problems to resolve before seeing any market disruption. Researchers were chided for less than complete reported results such as including the power needed for the laser. A wrap up comment suggesting the technology has a good future but needs to avoid exaggerated claims brought a good round of applause.
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The embedded optical module vendor pool deepens: We saw an increase this year of announcements related to embedded optical modules, sometimes also referred to as parallel optical modules, with a number of vendors new and old showing new midboard-mounted embedded optical module products. With Finisar, Avago, TE Connectivity (Tyco Electronics), and Samtec all introducing new embedded modules with capabilities from 120G to 600G, competition looks like it’s heating up in this space. Compass Electro-Optical Systems presented the first chip-to-chip optical interconnect actually deployed in a high-end router. LightCounting will cover this important development in an upcoming newsletter.
Service Providers emphasize cost reduction as optics accounts for increasing share of the network cost: While this is not exactly a surprise and in some ways has been a prevailing OFC trend for the past decade or more, speakers at the OSA Executive Forum laid out the scope of this trend in illuminating detail.
Pieter Poll from CenturyLink noted that their peak downloaded data per broadband user is going up by 73% a year, and argued that network costs had to go down by essentially the same amount to keep things moving along. It seems that CenturyLink is not counting on generating more revenue from the increasing traffic or sharing this additional revenue with their suppliers.
Pieter Poll also mentioned that optics accounts for an increasing share of the network cost, suggesting that more of the future cost reduction burden will fall on optical system and component vendors.
We have heard this story before. Our market forecast projects that service providers will have to spend more on optics in 2013-2017. If Century Link does not find ways to increase revenues and fund infrastructure upgrades, their competitors will.
These are just a sampling of interesting trends we noted at the show. LightCounting LLC's upcoming OFC/NFOEC 2013 Review report, provided at no charge to LightCounting subscribers, describes specific product releases and announcements in these areas and many more, including optical transceivers and components, embedded optical modules, test and measurement, ICs and DSPs, silicon photonics, and optical fibers, to name a few.
LightCounting will be presenting at the upcoming Ethernet Technology Summit on April 3rd, 2012.