|To follow is an excellent article on data flow and switches I came across and thought it would be great to share. There will be many exciting opportunities as this is where it is all headed. Traffic doubling every 100 days-now what can a guy do with all that bandwidth--mmmm. Some pretty neat new applications-never before possible, like net resident speech rec, or telephony and all kinds of other cool things we haven't dreamed of yet.|
Optical switches will be the next big thing in data transmission
By Bill Alpert
The optical Internet is a modern wonder. In the last decade, the cost for a kilometer's worth of gear that carries a billion bits per second of data has plummeted -- from $1,000 to $100. Firms like Nortel Networks and Ciena delivered that deep discount, with gear that packs dozens of signals on a single optical fiber, overlapping different colors of light through the technique called wavelength division multiplexing. By doubling their price-performance every 10 months, optical networks have left semiconductors in the dust. Moore's Law, as every kid knows, doubles computer processor power just every 18 months.
"Bandwidth is cheaper than processing power," said Nortel chief executive John Roth on Thursday, at the 25th anniversary of the Toronto firm's New York Stock Exchange listing. The Big Board's trades, Roth proudly noted, are crossed on computers in Brooklyn, not Wall Street.
Unfortunately, all that bandwidth is not good enough. Internet traffic is doubling every 100 days. While fiberoptic transmission of that traffic has gotten cheaper, the electronic switches that direct the traffic are doubling their price-performance only once every two to three years. That's why the next technological leap in optical networks has to be optical switches. The same day as Nortel's gathering, Vancouver-based 360networks announced plans to buy as many as 100 optical switches from Sycamore Networks. Chelmsford, Massachusetts-based Sycamore is just one of a dozen vendors working to perfect optical switches. Before this fall's collapse in tech stocks, optical switches were a primary cause of Wall Street's mania for optical stocks like Sycamore and Corvis.
A stock like Corvis never merited its August price of nearly $115, which valued the Columbia, Maryland, firm at $38 billion-some 125 times its hoped-for revenues next year. But market researchers predict that optical switching will be a $5 billion annual business by 2004, and even in the now deflated environment for tech stocks, a number of optical switch firms have lined up for their initial offerings.
All the burgeoning content of the Internet -- from e-mails to videos -- is made of electrons, notes Cisco Systems spokesman Kent Jenkins.
Cisco, of course, made the big time by figuring out how to route all those electrons. The routing switches of Cisco, and such challengers as Avici Systems and Juniper Networks, now shuttle those electrons around at speeds of 2.5 billion bits per second.
Nortel, however, has been outfitting the backbone of the Internet with lightwave multiplexing gear that runs at 10 billion bits per second. Next year, Nortel is cranking the speed up to 40 billion.
This is possible because of the wavelength division multiplexing pioneered by Linthicum, Maryland-based Ciena. The WDM technique takes electrons off copper wire and converts them into lightwaves beaming across fiberoptics. The photon particles of light move faster than electrons, of course. Better yet, photons can pass right through each other, allowing WDM to simultaneously send separate streams of light down the fiber, each stream of a slightly different wavelength (or "color"). Nortel gear packs 160 wavelengths on a fiber, with a 320-channel system in the works.
When those streams of light need to make a turn on the superhighway, or get off at their final destination, they've got to be converted into electrons-because until recently, switching gear has been electronic. To keep up with just one channel of photons barreling at 10 billion bits per second, therefore, it takes four lines of electronic switching. As that disparity gets wider, it gets more cumbersome and expensive for electronics to keep up.
"It's like building an interstate highway with no developed roads off the exit ramps," says Karen Liu, an analyst at market researcher RHK Inc. "You have huge traffic jams."
Keeping up isn't the only motivation for optical switching. Global Crossing, Qwest Communications and Williams Communications, all of which have newfangled networks, figure that optical switching will greatly reduce the cost of building and operating the Internet.
The world's communications networks were built for voice traffic, which runs in steady, small pieces. A wonderfully fault-tolerant technology called SoNET carried this traffic along doubled-up rings of fiberoptics. If one ring got cut, electronic connections shifted traffic to the spare ring in an imperceptible 50 thousandths of a second.
Data traffic has now overtaken voice traffic on many networks, and the evolutionary legacy of networking gear has resulted in roadblocks.
Data traffic undergoes several levels of repackaging in order to get on and off the 'Net's optical backbone. Packets get addressed in a protocol called IP, then bundled for express delivery in yet another protocol dubbed ATM. Next, they're converted again for transmission over failsafe SoNET rings, then finally packaged by WDM gear as wavelengths for the network's backbone.
The great hope for directing this traffic once rested on ATM switches. However, converting optical traffic into ATM's electronic format is like taking passengers off a high-speed express and herding them single-file onto another train headed in the direction they want to go.
In contrast, optical switches, in effect, just turn the whole express train around and send it and the passengers on the correct route. They do this by switching a stream of optical data without going through conversion to other protocols.
By collapsing today's four-level hierarchy of data formats into just two, optical switch vendors promise to generate big savings for their customers.
Tellium, an Oceanport, New Jersey, firm now in registration for its initial public offering, can replace 40 racks of SoNET-style gear with four racks of optical switches, asserts Chief Executive Harry Carr.
New carriers like 360networks and Level 3 Communications are using optical switches to avoid the inefficiency of SoNET's paired-ring structure, which leaves half of a network's capacity idling to ensure sub-second failovers. (In other words, if one part of the system crashes, the other will almost instantaneously take over, with no data loss.) A mesh of optical switches, in comparison, might deliver fault-tolerance with less than a quarter of the fallback capacity.
Ironically, most "optical switches" today are electronic at their core. Firms like Ciena, Sycamore and Tellium can take in wavelengths streaming down the channels of a WDM fiber and switch them out to another WDM fiber-the traffic's converted to electrical form for switching in the guts of their devices.
"The industry's done a disservice to the English language by using the term 'optical switch' for something that's electronic in the middle," chuckles Don Smith, president of Nortel's optical Internet unit, which itself sells an optical-electrical-optical product called the OPTera Connect DX.
In contrast to such "OEO" devices are all-optical switches that redirect lightwaves in original form. Smith and others call such a product a "photonic switch" or just "OO." A debate has raged between proponents of OEO and those of OO.
The OO device, in fact, is a key part of the strategy of Corvis, which came public in July at the peak of Wall Street's optical frenzy, raising over $1.1 billion through the sale of 32 million shares at $36 apiece. With more than $550 million in contracts in hand from Broadwing Communications, Qwest Communications and Williams Communications Group, Corvis saw its shares crest near $115 and then dive with the rest of the network sector, falling below $20 before recovering a bit to a recent $32.
With a portfolio of all-optical technologies, Corvis boasts that it can save its customers 90% of the cost of building a network. The firm has intrigued -- and maddened -- outsiders by refusing to disclose details of its technologies, even to the brokerage firm analysts that tout Corvis shares. Fans find reassurance in the credibility of Corvis' founder, David Huber, who was the brains behind wavelength multiplexing at Ciena.
"It's a technological black box," maintains Shyam Jha, Corvis's vice president for marketing. "But it's a black box that works." Corvis justifies its secretiveness by claiming it has an 18-month lead over Nortel and other optical-network rivals and doesn't want to reveal anything that might help them catch up.
Jha will say only that the Corvis device can switch a stream of 960 wavelengths, traveling at 2.5 billion bits per second.
Among the few who have seen the switch are Corvis customers.
Engineers at both Williams and Broadwing have told Barron's they've been happy with what they've observed. Chris Rothlis, the VP who runs Broadwing's optical lab in Austin, Texas, says his company has two switches. It's now installing them in its network for field testing.
Jha says that his firm will reveal its technology as customers turn on the switches. Investors will no doubt take heart, although with a $10 billion stock market value, Jha's company still is far from cheap. Expected revenues are $30 million this year, and $300 million in 2001, with breakeven expected to arrive in 2002.
Other all-optical switch contenders have been more open about their technologies. Indeed, a bewildering variety of switching fabrics have been proposed, ranging from swiveling arrays of tiny mirrors to ink-jet-style bubbles.
The latter approach is being explored by the Hewlett-Packard spinoff Agilent Technologies, with the encouragement of French telecom supplier Alcatel.
Lynx Photonic, a privately held Israeli firm with operations in Woodland Hills, California, is pursuing switches built of a material called lithium niobate, which appears to be very fast and very immature. Another Israeli startup, Trellis Photonics, aims to bounce lightwaves off holograms embedded in crystal arrays.
Chorum Technologies, a Richardson, Texas, firm in registration to raise as much as $150 million in its IPO, has delivered prototype components that use liquid crystals like the display of a laptop computer. Backed with $158 million in venture funding, Chorum had $3.3 million in initial revenues in the September quarter, and a loss of $44 million. Other component suppliers for solid-state photonic switching include PMC-Sierra and Applied Micro Circuits. The most hotly pursued technology for all-optical switches, however, are microelectro-mechanical switches, or MEMS. These are arrays of movable mirrors cut from a wafer of silicon.
Lucent Technologies made a splash with the announcement of the first MEMS-based switch, the LambdaRouter. Global Crossing is using it to switch traffic between New York and England.
In March, Lucent rival Nortel paid over $3.2 billion in stock for MEMS-maker Xros. Greg Reznick, who runs Xros, plans to deliver a switch next year that can switch 1,152 links. The beauty of all-optical switching, says Reznick, is that it can switch signals in any format, wavelength or speed. In contrast, OEO switches have to upgrade their electronics every time the network speeds up.
To scale up to 1,000 links, the mirrors in switches like those of Lucent and Nortel must be able to swivel along two axes, like a ship's compass. Tellium, the switchmaker in registration for a $260 million IPO, bought comparable MEMS technologies this year, to supplement the 512-link OEO switch it's already selling.
Also in registration for an IPO is San Diego-based OMM, which sold $1.5 million in MEMS components to customers like Alcatel. OMM's mirrors only flip along one axis, however, and it must develop "3D" technology to supply large switches.
Ultimately, says Tellium's Harry Carr, optical switches will need both mirrors and electronics. When fiber channels commonly run at 40 billion bits per second, in a couple of years, only all-optical will be able to keep up. But outside the core of the network, those lightwaves will have to be decoded into electrons for delivery to a network's customers.