I think I agree with Vladimir's assessment that 10G is still the place to be for volume optical shipments.

I think many of the system manufacturers are in a strange position. They clearly need to show some kind of 40G and 100G capability moving forward, especially for their largest customers. Most of them, however, don't have (or have lost) the ability to do a vertically integrated development in this space.

Simultaneously the majority of the optical module suppliers cannot justify, or can only barely justify, the development of such a costly and low volume product offering. Our industry, on the whole, is in a quandary on this issue. Who is going to front the money and time to make 100G happen in a widespread sense?

More importantly, if it becomes widespread (at least on the supply side) but not widely adopted (perhaps due to cost reasons) then what happens to the too many folks that have come out with module solutions? They all will share a very small pie, which is not a recipe for success.

I wonder if 100G is still at the stage where economically it only makes sense to be done in startups? I can't fathom how a Product Manager at a mainline optical module vendor can justify a 100G module development (especially one aimed at the LH) given the cost of the development, the time to revenue, and the projected inflection point of 10G to 100G widespread adoption (and that doesn't even take into account 40G), unless of course the business is pre-wired and booked by a majority of the marketplace.

Mainly, it was the last three or four paragraphs that I was referring to.

The optical component companies, and especially their shareholders, have ended up with a raw deal. Whereas everyone can recognize the technological achievements of these companies and their contributions to high speed networking and long distance communications, the value of this effort has been siphoned off by the system vendors, and MSAs have been a big facilitator for this.

In the past, there have been several transceiver MSAs with wide industry participation. The extent of which appears directly proportional to its addressable market, i.e. niche vs. widespread, as evident with X2, XFP, and SFP MSAs in contrast to say, XFP-E, or XLMD, the CFP, etc.

Many times, when a nifty feature, such as Digital Diagnostics for example, (SFF-8472 MSA) was developed, the systems folks only became interested (meaning possible industry adoption) when the developer found three or four other vendors to join them and form a MSA. In essence, the MSA defeated the rewards of innovation and the ROI by forcing the OCs to share propietary technology.

It is difficult to see how IEEE standards, or OIF's involvement would help improve this situation. For years, we have discussed the effect of the MSAs as being a huge reason why these firms have never been able to excel, even when demand growth for their products indicate otherwise, and nobody has been hit as hard as their shareholders.

Thank you for your website and articles. They are a very valuable resource for investors and potential investors in OCs.

Well, the MSA has been around a few years so I'd argue it is interesting that these views are being expressed. And were people calling for the OIF or the IEEE to get involved 5 years ago? And was the industry so stretched as it is now?

Thanks for flagging up the article.

If I remember correctly, you could have read that on this board for over 5 years.... online_trader2000

Everything Bob says rings true with me.