100G will soon be upon us

Paul Hansen, VP of marketing, Finisar Corp., talked about the key technology drivers and market opportunities for optical components and high-speed communications. Excerpts:



Please give us a brief overview of Finisar.

Established in the late 1980s and going public in 1999, Finisar offers fiber optic subsystems and network performance test systems. We are the leaders in that field having been in the forefront of the optical communications industry for nearly 20 years. With sales of more than $400M, Finisar has more than doubled its annual revenue within the last three years. Our products enable high-speed communications for networking and storage applications over Gigabit Ethernet local area networks (LANs), Fibre channel storage area networks (SANs), and metropolitan area networks (MANs) using both IP and SONET/SDH-based protocols. Finisar is the market leader of pluggable optical modules for both LANs and SANs worldwide and serves every major vendor in this market segment. In addition to our core optical module business, the Network Tools Division has developed a leadership position in high-speed protocol analysis, primarily serving the storage and consumer electronics markets.



What are the key technology drivers for optical components? Where do you see big opportunities for this market?

From an adoption point of view, applications drive the need for increased speeds, which in turn, drives the trends of optical components and their market timing. From an implementation point of view, networking technology offerings drive the usage of optical component characteristics and features. Low latency switching technologies being driven by new applications are driving faster speeds and features in optics such as low latency tunable lasers. The huge opportunity for optical components is to support applications that require 100Gbps to feed their insatiable demand for bandwidth and speed such as Web 2.0 applications and video-on-demand. Supporting low latency switching infrastructure is another opportunity for next-generation optical components.

Do you have a main product focus which is currently in demand?

In the optical modules business, our newest growth product is our 10Gbps optical transceivers. Recently qualified at our major accounts, we expect the 10G modules to fuel a large part of our growth for the next couple of years. We also have expanded our development of solutions for the telecom industry, utilizing long reach module technologies to grow our presence in this segment. In the network tools business, we are excited about our growth in Asia with the Bus Doctor family of products. The booming market of personal electronics devices is fueling the need for cost-effective analyzer tools that can support a wide variety of standards ─ particularly in Asia ─ where manufacturers have relocated the design and development of their products as a means to save money and speed time to market. We have been successful in the region since our tools significantly augment the development and testing of new products, accelerating the design process while ensuring compliance to key industry standards. The expansion of technologies in consumer products like MP3 players, cellphones and video cameras, is enormous. Engineers are now challenged with a multitude of new technologies that must be incorporated quickly, yet interoperate seamlessly and reliably. This is where the Bus Doctor product becomes a powerful instrument for designers. Due to a highly extendible architecture, the Bus Doctor platform can easily incorporate new protocols with the simple addition of plug-in modules.



What is your biggest technology disappointment?

Although the technology has been available for some time now, it is only recently that 10Gbs is beginning to have adoption by enterprises. This is disappointing since the next-generation 40Gbs is now available and 100Gbs will be upon us within the next few years.



Your lab is oddly named Medusa. Where did the name come from? Is there one aspect of the project of which you are most proud?

The story comes from tales of old days when many were afraid to set foot into that laboratory. When we were first started the company, we had to work in a dark lab with all the cables and lights hanging from the wall in a cluster ─ and it looked like a Medusa head. We really liked the name due to the mythological background of Medusa turning people to stone, plus the logo depicts the trade-off between good and evil, right and wrong, black and white. Our two main test programs are called “Pain” and “Maim” to reflect how we can be evil in our testing, but on the other hand we can also be a blessing to the companies that are racing to release high-quality products to market. It’s this love/hate situation that makes the Medusa logo so effective and appropriate. We are proud that a number of key industry leaders routinely use Medusa Labs for early testing of their products. They depend on our skills and expertise to improve the quality of their products, treating us as if we are part of their team.



How much do you spend for R&D? Which technologies are you focused on developing right now?

Investments in new technologies and products are typically in the range of 10 to 15 percent of total revenues, exceeding more than $50M per year. It is important to maintain a leadership position in the many markets we serve. Top technologies for Finisar include 10G and 40G optics, solutions for telecom, protocol analysis and data generation for the emerging 6G SAS/SATA, 8G Fibre channel and 5Gbps PCI Express standards, plus new developments targeting the consumer electronics markets.



You’re putting a big push on Asia. Why is that?

Asia has become an exciting market due to its high growth in technology infrastructure, which is good for optics, and its leadership in key markets such as consumer electronics. Moreover, many of our US-based customers have established R&D centers in Asia, so we must follow suit. Our revenue from this part of the world has increased over the past year and will continue to do so over the foreseeable future. Finisar maintains a workforce of more than 3,000 employees in Asia. Our electronics manufacturing bases include Malaysia and Thailand, with increasing investments in R&D around the region. Our key markets in Asia include Japan, China, Taiwan, South Korea and Singapore.



What is the big challenge going forward?

Challenges in any component market include providing increasing functions, performance and reliability to customers while simultaneously reducing prices.



How do you measure or quantify success?

Ultimately, we measure success when our customers triumph in their market segments. Our value is providing reliable technology, at the right value, at the right time. When we can speed the release of our customers’ products and they become loyal partners with us, then we feel we have been successful.