Service Provider Networks / (none) /

Industry veterans launch newest optical access firm

By Terri Gimpelson
The Edge, 05/28/01

SAN JOSE - Look out ATM, there's a new Ethernet guru in town.

Salira Optical Network Systems was launched last week to develop products that would let carriers provision optical Ethernet access to the Internet.

Founded in July 2000, the firm is managed by seasoned industry veterans, including CEO Herb Martin (late of Wollongong, Ericsson and Plessey), CTO Wei Gao (Nortel Networks and Cylink) and Chairman David House (Intel, Bay, Nortel and Allegro). Salira secured nearly $7 million in its first round of financing through Vertex Management Systems and is in the process of closing on its second round.

Profile: Salira
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The company says it has 13 patents pending with seven more under review.

According to Martin, Salira's goal is to provide optical access for broadband services with Ethernet working at the media access control layer.

"We think Ethernet has many advantages over ATM," Martin says. "First, there are many cost advantages to Ethernet. There are also inherent bandwidth advantages with Ethernet and its ability to scale from 1.25G bit/sec up to 10G bit/sec and beyond."

Martin also touts Ethernet's simplified service provisioning, increased dynamic bandwidth allocation and what he calls the "de facto parity with ATM on [quality of service]," meaning Ethernet offers the same "no jitter, no latency" reliability as ATM.

Salira claims its products will be able to handle multilayer switching, Multi-protocol Label Switching, VPNs, video, voice and data, all based on an Ethernet-enabled passive optical network (PON).

"This is really a technology enabler for carriers," Martin says. "Both the carrier and the user want less cost and to be able to control hidden costs. DSL is a disaster in the provisioning area. That's one of the better aspects of PON. You can make a minimal investment and build out cost-effectively when necessary."

Salira is targeting companies such as Qwest Communications, Verizon, Time Warner Telecom, Yipes Communications, British Telecom, Sprint and Everest Broadband. Martin says the company's market strategy began with fiber to the building and within the next 18 months hopes to extend fiber to the curb and to the home, where it plans to use high-speed Ethernet over the last 1,000 yards over twisted pair.

The company's biggest competitor in this space is Alloptic, which claims to be a pioneer in the development of Ethernet PONs and touts the first product line to use IP as the primary PON service. Terawave also poses a competitive threat with its own optical access solutions, including PON and dense wave division multiplexing, but unlike Salira, Terawave targets last-mile applications - both horizontal access to the building and vertical fiber-in-the-riser solutions.

Quantum Bridge Communications is another heavy hitter in the PON market and also supports optical equipment for access networks. Recently, the firm extended its access focus beyond PON by adding an ATM switch fabric to its QB 3000 box.

According to Marian Stasney, senior analyst for The Yankee Group, Salira is in a position to contribute many positive innovations to the industry.

"This company does dynamic bandwidth switching. I don't know of anyone who does that yet," she says. "They also have QoS and security patents pending, and they offer burst-mode optics, which means there's intelligence at the customer end and the service provider end. They are developing coarse wavelength division multiplexing products that will be completed next year, and they are also developing Ethernet over copper. Their goal is 2,000 yards. They also have an autodiscovery process that works like routers do and will know when a new unit is added."

Stasney says burst-mode optics lets a vendor monitor at both ends of the connection, giving it more opportunity to offer enhanced service-level agreements.

Salira's next challenge, according to Stasney, is getting the message out and gaining market acceptance. Salira has also chosen a target customer market - incumbent, competitive, Ethernet, international and building local exchange carriers (LEC); and interexchange carriers - that is harder to sell to than greenfields, she says.

But the challenges don't end there for Salira. In these markets, the start-up will go up against entrenched giants that the LECs have bought from for decades. Salira is an unproven, unestablished company pitching a technology to disrupt the vast installed, revenue-generating base of ATM and SONET, observers note.

The company will demonstrate its technology next week at SuperComm in Atlanta and is preparing trials for November.