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October - 2000 - issue > Cover Feature

The Optical Arms Race: Who Will Build The New Internet?

Sunday, October 1, 2000

So what do visionaries view as the real Internet and communications paradigm for the twenty-first century? They see a rush of photons lighting up fibers and whisking data quickly and efficiently over the globe. They see new generation switches routing huge amounts of information at the command of software that will know in a matter of milliseconds where bandwidth is needed and how to deploy it. They see a new breed of optical network that will replace almost every element of the telecom-era infrastructure that exists today — a network that will finally allow the Internet to shed its cocoon of outdated switches and wires and grow into the technological marvel that it has long promised to become.

Who will build it? Today, three standout names come to mind when many people think of the networking industry — Cisco, Nortel and Lucent. That’s only fair, in a sense — the three of them currently have a combined market cap of nearly $850 billion. But the high tech industry moves fast, and apparently un-movable giants can fade away in periods of a few years. Facts are facts, and optical networking is clearly more than just a three-player industry. Today, many would pin the future of the networks on the new powerhouses like Juniper and Sycamore. Some might even bank on a consortium of relatively nascent pre and post-IPO players such as ONI, Amber, Tellium and Avici, among others — all of whom have eschewed acquisition by the big three in hopes of loftier rewards. However you view it, the fresh faces have been instrumental in bringing a new generation of technologies into play. Startups abound, the race is heating up and technologies are evolving at an alarming rate. There will be trillions of dollars awaiting those who succeed, and the big boys are going to have to be nimble on their feet — fighting, innovating, acquiring and scrambling — to preserve their prosperous business lives.

The Shock of the New

“Let’s step back and get some perspective here,” says Krishna Bala, CTO of Tellium. “We are moving to a point where the bandwidth is increasing by a factor of a hundred to a thousand. What that does, essentially, to today’s infrastructure, is that it makes it disappear. There will be a new network build-out — a paradigm shift … given the shift, there is room for a lot of companies to play in the space.” ONI Systems founder and CTO, Rohit Sharma, adds that “E-commerce transactions this year have already been more than half a trillion dollars. Three or four years from now it will be multiple trillion dollars. The infrastructure needed to support all of this is the one that’s going to get built.”

Says Sam Mathan, CEO of Amber Networks, a company that builds network edge aggregation products, “We are not just building a faster, cheaper box, we are addressing a new kind of product — with new technologies that are insurgent in nature — in that they are technologies that will change the way networks are being built.” Nearly every company, new and old, has a statement like this one to advertise the revolutionary nature of its product. Some of this is marketing buzz, but there is certainly astounding innovation taking place. This said, in the complex world of optical networking, how do innovation and business mix?

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