ECOC 2009: An industry view

One theme dominated all others for attendees at this year’s ECOC, held in Vienna in late September: high speed optical transmission technology.

“Most of the action was in 40 and 100 Gigabit,” said Stefan Rochus, vice president of marketing and business development at CyOptics. “There were many 40/ 100 Gigabit LR4 module announcements - from Finisar, Opnext and Sumitomo [Electric Industries].”

Daryl Inniss, practice leader, components at market research firm Ovum, noted a market shift regarding 40 Gigabit. “There has been substantial progress in lowering the cost, size and power consumption of 40 Gigabit technology,” he said.

John Sitch, Nortel’s senior advisor optical development, metro Ethernet networks, highlighted the prevalence and interest in coherent detection/ digital signal processing designs for 40 and 100 Gigabit per second (Gbps) transmission. Renewed interest in submarine was also evident, he said.

Rochus also highlighted photonic integration as a show theme, with the multi-source agreement from u²t Photonics and Picometrix, the integrated DPSK receiver involving Optoplex with u²t Photonics, Enablence Technologies, and CIP Technologies' monolithically integrated semiconductor optical amplifier with a reflective electro-absorption modulator.

Intriguingly, Rochus also heard talk of OEMs becoming vertically integrated again. “This time maybe by strategic partnerships rather than OEMs directly owning fabs,” he said.

The attendees were also surprised by the strong turnout at ECOC, which was expected to suffer given the state of the economy. “Attendance appeared to be thick and enthusiasm strong,” says Andrew Schmitt, directing analyst, optical at Infonetics Research. “I heard the organisers were expecting 200 people on the Sunday [for the workshops] but got 400.”

In general most of the developments at the show were as expected. “No big surprises, but the ongoing delays in getting actual 100 Gigabit CFP modules were a small surprise.” said Sitch. “And if everyone's telling the truth, there will be plenty of competition in 100 Gigabit.”

Inniss was struck by how 100 Gigabit technology is likely to fare: “The feeling regarding 100 Gigabit is that it is around the corner and that 40 Gigabit will somehow be subsumed,” he said. “I’m not so sure – 40 Gigabit  is growing up and while operators are cheerleading 100 Gigabit technology, it doesn’t mean they will buy – let’s be realistic here.”

As for the outlook, Rochus believes the industry has reason to be upbeat. “There is optimism regarding the third and fourth quarters for most people,” he said. “Inventories are depleted and carriers and enterprises are spending again.”

Inniss’ optimism stems from the industry's longer term prospects. He was struck by a quote used by ECOC speaker George Gilder: “Don’t solve problems, pursue opportunities.”

Network traffic continues to grow at a 40-50% yearly rate yet some companies continue to worry about taking a penny out of cost, said Inniss, when the end goal is solving the bandwidth problem.

For him 100 Gbps is just a data rate, as 400 Gbps will be the data rate that follows.  But given the traffic growth, the opportunity revolves around transforming data transmission. “For optical component companies innovation is the only way," said Inniss. "What is required here is not a linear, incremental solution."