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About our Top 5 vendors

February 20, 2008

Posted by Stephen Hardy

If you're reading this, you've probably already visited the story describing our picks for the Top 5 component/subsystems vendors for 2007. (And if you haven't read it, you can find it here.) Before you offer your comments, let me tell you about some of the companies that almost made it.

In particular, we were impressed with companies who made aggressive moves to expand into new areas or improve market share through acquisition. Oplink acquired Optical Communication Products (see here) and moved within Ovum RHK's Top 10 list of vendors for the four quarters beginning with Q406. Luminent's acquisition of Fiberxon to create Source Photonics had the same effect. And Emcore's acquisition of Opticomm in April and the telecom portions of Intel's Optical Platform Division in December may produce a similar result once the latter deal closes.

However, these moves weren't quite enough to overcome the momentum we believe our Top 5 picks generated during 2007.

You may fire when ready...

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Blogger mnewsom said...
Thursday, February 21, 2008 1:33:00 PM EST  

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Posted by Meghan Fuller Hanna

In this space a few months ago, I cited the emergence of the packet optical network platform (PONP) as key trend to watch in 2008. (Click here for that blog entry.) Certainly, the analysts' numbers indicate a steep deployment curve, with the market netting as much as $1.7 billion in annual sales by 2010, by some accounts.

But not everyone advocates this approach. I spoke recently with Russ Esmacher, manager of technical marketing for Cisco's Optical Transport Business Unit, on the subject of ROADMs, which lead to a discussion about the PONP. Esmacher gave me Cisco's admittedly contrarian view that the all-in-one-box approach to packet optical networking does not make sense for the many carriers that have already invested heavily in ROADM technology.

Instead, Cisco gives its customers the option of taking an ITU wavelength off a router and plugging it directly into the ROADM, a technology it calls IP over DWDM. Cisco also offers an MSPP on a blade that performs classic SONET/SDH ADM and Ethernet. Finally, the vendor rounds out its packet capability with another card form factor, the Ethernet Xponder, that does Layer 2 Ethernet with 50-msec restoration.

"We saw that the ROADM layer is in place," said Esmacher. "It is a protocol-agnostic converged layer. To our customers who have routers next to it, who have ADM needs next to it, we are basically saying, 'Don't change your back office OSS. Don't change how you deploy things. You've already got this ROADM in place. Just change the on-ramp to it.' This is different from what a lot of our competitors are doing," he admitted, "but, we have enough market input from our customers to think this is the right strategy."

To be fair, the PONP does represent a paradigmatic shift in network build out, particularly from a backoffice and OSS perspective. The folks at Cisco maintain that carriers simply aren't interested in changing their procedures in such a radical fashion.

But Verizon's recent packet optical transport platform (P-OTP) RFP suggests otherwise--to the tune of $500 million or more, which is the estimate Morgan Keegan analysts have given for the contract.

True, this isn't a Blu-Ray versus HD DVD-kind of debate where one format will eventually win the day; individual carriers will continue to deploy whatever architecture suits them best. But like Blu-Ray, the PONP does seem to have some industry heavyweights lining up behind it. And, as is often the case, the smaller guys may well follow suit.


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Lean and mean

February 8, 2008

Posted by Stephen Hardy

Remember those "lean manufacturing" initiatives we heard optical component and subsystem companies blame for last year's poor start? (See here and here for reminders.) Well, they're not over yet -- they're just moving farther down the food chain.

In a recent conversation, JDSU's Craig Iwata, senior director of marketing and business operations, told me that the adoption of lean business practices by systems houses last year had two major effects. The first was that it gave the systems vendors an opportunity to re-examine their inventory requirements; several decided they didn't need to carry as many spare parts, which led to the aforementioned slowdown in orders.

The second effect was a shortening of lead times, down to three weeks in some cases. So what can a company like JDSU do to meet these reduced lead times? Why, institute lean business practices itself. The company feels so strongly about its decision that it's hosting a webcast on the subject February 13. (Find details here.)

You can't blame JDSU and other subsystem vendors for taking this approach. But this certainly can't be good news for component suppliers to JDSU and companies of its ilk. They already suffered a trickle-down effect from the spread of lean practices at the systems level in 2007; a repeat at the subsystems level suggests component companies will see another year get off to a rocky start.


Blogger Lani said...
The manufacturing guys over at Evolving Excellence had a nice comment on your post... guess he's been in your industry.
Saturday, February 9, 2008 12:17:00 PM EST  

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Posted by Meghan Fuller Hanna

This year's Super Bowl will have a high fiber content, and I'm not talking about the chili I'm planning to make for the big game.

All the glamour and excitement of Super Bowl XLII will unfold Sunday night at the University of Phoenix Stadium in Glendale, AZ, a stadium I profiled last year in the pages of Lightwave. (See "Air-blown fiber is an MVP at University of Phoenix Stadium".)

I had the pleasure of interviewing Cardinals IT director Mark Feller, who told me that the stadium features 71,000 feet of air-blown multimode fiber and 30,000 feet of air-blown singlemode fiber. Sumitomo Electric Lightwave is the supplier. This fiber infrastructure supports the team's internal communications needs and provides the backbone over which live games are broadcast to the world.

But network traffic does not begin or end with the television broadcast. I've done a little research, and it turns out the Super Bowl generates a veritable bonanza of online traffic, most of which, presumably, rides over a fiber network at some point in its journey from origination to destination. For football fans, the Internet has become a big part of their pre- and post-game activities.

This year's Super Bowl is expected to drive 2.4 million high-definition (HD) television units, generating some $2.2 billion in sales, reveals the third annual "Sports and Technology" survey conducted by the Consumer Electronics Association (CEA) and the Sports Video Group. That's hardly surprising. But what is surprising is just how many of the respondents plan to watch the game on more than one screen.

"We have long known that the Super Bowl influences HDTV unit sales," notes Tim Herbert, CEA's senior director of market research. "We are now finding ties to other technologies consumers use to enhance their Super Bowl experience. This year, 18% of consumers watching the game expect to have a laptop PC nearby to check stats, IM with friends, or check betting lines," he says. "Another 12% plan to use their mobile phone for the same purpose."

And this interactivity does not end with the fourth quarter. According to the CEA, 57% of HDTV owners say they will go online after the game to view memorable moments or TV commercials.

In fact, the Super Bowl now generates a flurry of online activity even after the last of the confetti has rained down on the triumphant team. Last year's Super Bowl advertisers saw a collective 50% increase in Web traffic the day after the game, from 8.5 million unique visitors on Super Bowl Sunday to 12.7 million unique visitors on Monday, notes The Nielsen Company in its "2008 Guide to the Super Bowl." FedEx saw the biggest jump in Internet traffic last year; its Web site was below the reporting cutoff on Super Bowl Sunday (the sample size was insufficient for a reliable projection), but jumped to a whopping 1.1 million visitors the next day, report Nielsen analysts.

And the pundits, once dedicated to analyzing the success or failure of TV ads in isolation, are now examining the level of integration between an advertiser's TV ads and its presence in online search and social websites like MySpace, Facebook, and YouTube.

"Advertisers are becoming savvier about creating online buzz around events," says Peter Hershberg, managing partner at Reprise Media, which is conducting its fourth annual Super Bowl Search Marketing Scorecard. "Unlike many lost in the previous years, marketers are expected to finally use search and social media sites to capitalize on the excitement and brand awareness generated by their ads in the big game."

So if you play your cards right, it sounds like $2.7 million--the reported price for a 30-second ad--buys you more than it used to . . .

In my research, I uncovered a few more fun facts about this year's big game, and since it's Friday afternoon and--let's face it--we're all just counting down the minutes until the big weekend, I thought I'd share them here:

*Scarborough Sports Marketing estimates that 63% of Patriots fans in Boston have a broadband Internet connection.

*According to a Harris Interactive survey sponsored by The Workforce Institute and Kronos Inc., 1.5 million U.S. adults may call in sick to work the day after the Super Bowl, and an additional 4.4 million employees say they may arrive late. "Super Bowl-related absences could be particularly striking for organizations with a high population of Gen X and Gen Y employees," says the report, "as the majority of employed adults who say they may call in sick the day after the Super Bowl are males and females between the ages of 18-34 years."

*I can't argue with the results of this national consumer survey commissioned by Comcast. When asked who would look best in HD at the Super Bowl, Patriots quarterback Tom Brady was the most popular choice among six players, garnering 27% of the vote. (Personally, I think Tom Brady would look good in any and all media, but I'm admittedly a little biased.)

*And here's something I bet you didn't know: The Hass Avocado Board estimates that Americans will eat 49.5 million pounds of avocados on Game Day, enough to cover University of Phoenix Stadium end zone to end zone in more than 19 feet of avocados. In an unrelated study, The Nielsen Company found that tortilla chips were the most popular snack food during last year's Super Bowl, with a 29% sales increase and a $13.4 million incremental sales boost. Hence the need for 49.5 million pounds of avocados, I guess. Still, that's a lot of guacamole.

Well, that's all I've got. Have a great weekend, everyone. I'll see you back here on Tuesday. (Just kidding, Stephen.)


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The Lightwave editorial staff uses The Lightwave Blog to share their thoughts on optical communications and whatever else might be the current topic of conversation from cubicle to cubicle. Feel free to add your own opinions.

Stephen Hardy is editorial director and associate publisher of Lightwave, which makes him responsible for the editorial aspects of the Lightwave franchise. A technology journalist since 1982, he once had his job duties described as "gets paid to tick off advertisers ".

Meghan Fuller is senior editor of Lightwave. She has degrees from Franklin & Marshall College in Lancaster, PA, and the University of Delaware and is a card-carrying member of Red Sox Nation.