A haul in for the long-haul
Optical start-up lands $55 million in new funding to boost depressed market.
 
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Just when you thought the long-haul optical market was being left for dead, a start-up in Ottawa just landed $55 million in new funding to revive it.
Of any market segment in telecom, optical long-haul is perhaps the most depressed. In the fourth quarter of 2001, revenue for long-haul dense wavelength division multiplexing (DWDM) and SONET/SDH was down 30% and 27%, respectively, from the third quarter, according to the Dell'Oro Group.
For all of 2001, long-haul DWDM and SONET/SDH were down 25% and 38%, respectively, from 2000.
By contrast, metro DWDM was the only segment to post quarter-over-quarter growth of 12% in the fourth quarter. For the year, metro DWDM was up 75% from 2000, Dell'Oro states.
Nortel, one of the leading optical system vendors, has continually cited the lag in long-haul as a chief contributor to its current fiscal crisis. The revenue drop-off in optical long-haul for Nortel has far exceeded the drop-off in any of its other businesses.
So leave it to a group of ex-Nortelers to inject some life into the market with this recent funding and a product to take on the likes of Nortel's HDX optical switch, Ciena's CoreDirector, and the long-haul transport systems from these two powers.
Innovance Networks began operations in mid-2000 with the objective to develop products to automate the core of the optical long-haul network. The company is headed by CEO Peter Allen, who was vice president of business development and general manager of the optoelectronics organization within Nortel's Optical Networks division. Allen was responsible for the system and component businesses.
Innovance is developing a system they claim combines photonic switching and transport. In essence, it will go up against a combination of Nortel's OPTera HDX (which is currently in trials) and OPTera LH systems, and Ciena's CoreDirector and CoreStream platforms, Allen says.
The Innovance system will replace the static point-to-point/OEO architecture of today's optical long-haul networks with a point-to-multipoint OOO system that is tunable - to help reduce contention among wavelengths for power and signal integrity - and can dynamically set up wavelengths in seconds vs. months. The system will support spans of 2,500 to 3,000 km without regeneration, Allen says, and will provide better economics than today's switch and transport systems through the elimination of costly and performance-sapping OEO conversions.
Eighty percent of the point-to-point optical long-haul spans in North America are less than 1,000 km, Allen says.
The Series B financing, in which JDS Uniphase and Corning participated, is testament to the reception the Innovance system received during beta testing, which is now complete, Allen claims. The company is now lining lab trials.
It might also indicate an impending rebound for optical long-haul. If 2001 was bad, 2002 will be equally bad, but 2003 will see some action in the market as carriers look to unclog filled-up routes, Allen predicts.
The Innovance system will launch in the second quarter and will be on display at SuperComm 2002 in Atlanta in June.
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Network World Optical Networking Research page
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