Are Fiber Network Players Really Playing Well Enough?

We are seeing more signs of the fiber challenge and opportunity, and more uncertainty about how it will play out, especially in terms of winners and losers.  Ciena continues to take sensible steps, Infinera continues to stumble, and making sense of these seeming contradictions is the challenging part of assessing fiber’s future.

It’s not like we don’t all know that fiber deployment has nowhere to go but up.  Wireless alone could double fiber in service by 2025, and there’s a lot of global interest in increasing the commitment to fiber access, especially FTTN combined with 5G.  The challenge for fiber network players like Ciena and Infinera is that they don’t sell glass, but systems, and the role of those systems in a fiber-rich future is much more difficult to determine.

Most network hardware includes fiber interfaces, so single-mission point-to-point or even multipoint connections don’t require the equipment fiber networking vendors offer.  What you need their gear for is building “fiber networks”, which are connective Layer-One structures that provide optical multi-hop paths, aggregation, and distribution of capacity.  If you’re a fiber vendor, you either have to focus on expanded applications of fiber networking, or you have to bet on expansion in the few areas of fiber deployment that are essentially point-to-point but do require or justify specialized devices.

Infinera seems to have taken the second option, talking more about things like subsea cables for intercontinental connection.  Yes, we’re likely to have more of that, but no, it’s not likely to be a huge growth opportunity.  Data center interconnect is another area that they’ve identified, and while surely the cloud will increase the need for that, it’s not exactly a household-scale opportunity.  Of the 7.5 million business sites in the US, for example, only about 150,000 represent any scale of data center, and my surveys say that only 8,000 even represent multiple data centers of a single business.

Ciena has done a better job in positioning optical networking as a target, and focusing on what I think is the fundamental truth for optical network vendors—you need to have a connective, multi-hop, complex Layer One infrastructure opportunity if you want to have an opportunity for discrete optical network products versus glass connected to the interfaces of electrical-layer stuff.  Even Ciena, though, may not be going quite far enough or being quite explicit enough.

It’s helpful here to look at the extreme case.  What would magnify the value of optical networking in its true sense?  Answer, diminution of electrical networking in the same sense.  Put in the reverse, the more connectivity we manage at the optical layer the more the electrical layer looks like a simple edge function.

This is a clear description of what a combination of agile optics and “virtual wires” would be.  If Level 1 is fully connective (in virtual wire form), fully resilient in recovery from faults, and fully elastic in terms of capacity, then higher protocol layers are just the stuff that creates an interface and divides traffic up among the virtual pipes.  SD-WAN is a good example; if you’re going to build services on an overlay principle you’d achieve the lowest cost and simplest operation by overlaying them on the most primitive underlay you can build—a virtual wire.

Virtual wires can be distinguished from optical paths by the presumption that a virtual wire is a Level 1 element that carries traffic but doesn’t participate in any data-plane protocol exchange.  Optical paths can be viewed as an implementation option for virtual wires, but probably not one broadly applicable enough to fulfill their potential.  The problem is that everyone can’t have a piece of an optical pipe serving them; you need to have some electrical-layer tail connectivity that aggregates onto the higher-capacity optical routes.  That’s what Ciena just announced, with the notion of a packet-technology edge function.

“Edge” is important here, because the closer you can get a fiber network—even a “fiber network” that’s including electrical/packet tail connections—to the edge, the more you can absorb into it in terms of features, functions, and benefits.  That absorption is what increases the value of fiber networks, and networking, and raises the revenue potential for vendors in the space.

If we look at edge computing in abstract, it’s tempting to see connectivity requirements as nothing more than a greater number of DCI paths, because edge computing is computer and data center connection if considered on its own.  The thing is, we have to consider it in the context of what else is at the edge.

The majority of edge computing sites will be sites where telecom/cablecom and wireless services converge.  Think telco central office.  There is already considerable traffic in and out of these locations, much of which is concentrated using its own specific equipment.  Historically, the “metro network” was a network created with optics (SONET) and supported through on-ramp add-drop multiplexers that offered operators a way of clumping a variety of traffic sources onto fast fiber paths.  If edge computing comes along, it adds to the stuff that needs clumping, and could potentially further justify the notion of a separate optical-layer network.

Ciena and Infinera already have “metro network” products and strategies, and it seems to me that edge computing is effectively an update to these strategies, a way of providing virtual wires to extend optics, perhaps even virtual-wire services to end users.  Ciena talks about some of the specific value propositions for 10 and 100GigE to the edge, but they really should explore two issues.  First, how do you keep the various higher-speed packet interfaces that the future will demand from being realize as simple glass between boxes and not elements of an optical network?  Second, how can you turn packet-edge into service-virtual-wire?

Virtual private networks can be created without switches/routers in a variety of ways, all of which are likely to offer lower service costs and greater operator profits.  Even things like content delivery networks and mobile packet core can be built that way, and we’re already seeing examples of this.  The logical pathway for operators to achieve better profits is to use cheaper technology—both in capex and opex terms—to create services.  Virtual wires would be a good way to start, because they can link in with SD-WAN, with virtual switch/router instances, and even with NFV-hosted service elements.

Optical players like Ciena and Infinera have an opportunity to anticipate what is likely an inevitable shift in how services like these are created, but it’s not one that will be automatically realized.  Vendors have to sing their own song, and sing effectively, if they want their buyers to listen.  Ciena has taken more positive steps in this direction, but even they’re not quite where they need to be.  Infinera has some hard choices to face.

A good, and sadly deceased, friend of mine, Ping Pan, was an advocate of a virtual wire concept.  He was one of the architects of the IETF effort on “pseudowires”, in fact, and if we’d had all the mature thinking on the cloud, virtual switches, virtual routers, instances of forwarding software, and SD-WAN, that we now have, he’d have seen the connection.  Edge instances of forwarding processes can combine with virtual wires to create all but the largest-scale services.  Interestingly, he was working at Infinera during some of his work on pseudowires.  They should have listened.