We've said it before and we'll say it again -- a fundamental shift is occurring in the market that might just put...
router vendors in a better position to tackle the packet optical transport market.
ACG Research noted as much in a market impact report on the Cisco/CoreOptics acquisition. Now, even some core Tier 1 telecom service providers are conceding that MPLS vendors are likely to be well positioned to address packet optical transport requirements over the next few years.
Cisco and Alcatel-Lucent are clearly making moves in this market, which makes us wonder what Juniper -- the No. 2 routing vendor in this space -- will do. Juniper Networks has some integrated optics available on its core routers, and it has a selling partnership with NSN. But neither of these factors will position the company competitively moving forward.
Juniper has two major options regarding the packet optical transport market:
- It can dismiss the optical competition (and potentially subject the company to long-term market erosion) and focus more on the enterprise and its relationship with IBM.
- Or it can jump into the competition. We're urging the company to jump in feet first; the water is warm!
Juniper left with limited packet optical acquisition solutions
To compete in this market, Juniper clearly must make an acquisition. Juniper does not have in-house development capabilities and, perhaps more importantly, it lacks internal optical expertise to assemble a system-level product, even if it purchased multiple optical pieces separately.
Given these factors, what, then, does Juniper need? Juniper must have a 100G DWDM optical networking transport solution and a ROADM (reconfigurable optical add-drop multiplexer). 100G technology is of strategic importance because it provides advanced signal processing and the ability to implement these techniques in silicon to overcome major fiber impairments. A 100G ASIC requires expertise in high-speed analog and mixed-signal design that most DWDM vendors do not have.
A ROADM can be purchased from optical communications vendor JDSU or on a blade from another system vendor, but to design a full packet optical transport product with an appropriate FCAPS framework and EMS features compatible with a carrier's mode of operation is still a big challenge for any vendor in the market.
Cisco scored a coup with CoreOptics by acquiring an experienced analog and mixed-signal ASIC team that can develop a 100G solution while at the same time removing from the market a potential 100G solution others could use. Cisco also has a team of experienced optical engineers that can systematize any number of acquisition options.
Cisco and Alcatel-Lucent are clearly making moves in this market, which makes us wonder what Juniper will do.
Juniper, on the other hand, cannot follow Cisco's lead and just acquire another component or subsystem vendor such as Opnext, which is also heavily invested in a 100G ASIC. It cannot buy one of the new startup 100G design firms such as Clariphy, Acacia Networks or Chromatic Systems because they lack the system-level expertise to incorporate that technology into their portfolios.
So what Juniper needs is to acquire a complete team of optical expertise, and that team must also be able to sell complete transport systems to carriers.
So why not just acquire a system vendor? The solution is not that simple. Ciena (Nortel) is too large to tackle now, although a partnership could be feasible. ADVA, ECI and Tellabs are all options, but none of them has in-house high-speed analog IC expertise to provide the necessary edge in the 100G battle that is quickly approaching. Also, Juniper does not usually purchase system vendors at the mid-tier level.
Menara Networks is the only other "system" company that has experience designing and building high-speed signal-processing ASICs. Executives that were formerly with established vendors and carriers such as Nortel, Qtera, Alcatel, Fujitsu and MCI/Worldcom make up Menara's top management.
Menara has developed 11G signal processors used in its OTN XFPs and a 12G EDC chip. Menara's approach does not use an upfront analog-to-digital converter (ADC) but instead carries out the entire signal processing in discrete analog fashion, requiring much more high-speed precision analog design.
This approach provides a smaller and lower-powered device than the standard ADC, which can become the bottleneck during high-speed transmission if not designed properly.
What the packet optical future holds
With the race pivoting to include packet vendors in the packet optical transport market, we believe that Juniper can leverage the Menara Networks' option effectively to create a market position for itself and to acquire an experienced team that can assist in the system formation of a carrier-class product without the baggage of a system vendor.
Juniper's late plunge into these waters can be overcome based on the availability of key mature optical subsystems (such as ROADMs) and on the strength of JUNOS and Juniper's control plane. Juniper certainly has serious challenges ahead, but it also has a tremendous opportunity to establish itself as a strong contender in the optical market. Juniper's conundrum is to find the right strategic partner with the necessary expertise, as well as one that can thrive within the Juniper culture.
- Major carriers now believe that MPLS router vendors may be well positioned to tackle the packet optical transport market.
- Router vendors including Cisco have already made some moves in this market.
- Juniper can jump in or be left behind. We say, JUMP!
- Juniper is hampered because it lacks an in-house transport team.
- Juniper must make an acquisition, but who?
- Our suggestion: Menara Networks would be a solid option for Juniper.
About the author: Eve Griliches, managing partner of ACG Research, has extensive experience in technology product management and the telecommunications industry. She was IDC program director for the Telecommunications Equipment group, where she provided in-depth analysis on many key technologies in the telecom market. Her product management experience at network equipment vendors include Marconi (Ericsson), PhotonEx, Nortel Networks, Bay Networks and Welfleet. Wellfleet. She can be reached at firstname.lastname@example.org.