WAN Services /

Salira eyes Ethernet PON market

By Marguerite Reardon
Network World Optical Networking Newsletter, 06/04/01

Salira Optical Network Systems came out of hiding recently when it announced it will use Ethernet-based passive optical networking technology to attack telecommunication applications in the last mile of access.

PON technology uses relatively inexpensive " passive " equipment that splits a single strand of fiber and allows the bandwidth to be shared without the use of more expensive "active" components like lasers. Carriers have seen this as an economical way to roll out fiber-optic networking technology to homes and businesses.

Salira has several things going for it: decent funding, good technology and a management team filled with some big names. Even though its product won't be ready to ship until 2002, it will be demonstrating its technology at this year's Supercomm 2001 trade show in Atlanta this week.

David House, formerly of Intel, Bay Networks and Nortel Networks, is chairman of the board (he also chairs another start-up, Allegro Networks). Salira CEO Herb Martin has worked at Ericsson, ESS Technology, Onyx and The Wollongong Group. Salira CTO and co-founder Wei-Gao formerly worked at Nortel's Bell Northern Research unit, where he helped develop the first OC192/Sonet product.

" They've got a good group of people working with them - a real strong management team, " says Alan Bezoza, an analyst with CIBC World Markets. " They have people from Cisco, Nortel, ONI Systems, Alcatel and Marconi Communications. I was impressed. "

Since September, the company has been supporting its 55-person operation with about $7 million in venture funding, which it secured from Vertex Management. But CEO Martin says the company is about to close a $20 million round in the next 30 days, which should keep its development wheels turning.

Unlike companies like Quantum Bridge, Terawave Communications and Paceon, which have developed PONs using ATM, Salira has based its product exclusively on Ethernet. Why? For one, Ethernet is the most common IP-based technology.

Secondly, Ethernet PONs are cheaper to implement because they can support more users per unit. For example, Salira claims its gear will be able to deliver nearly eight times the symmetrical bandwidth capability as its ATM PON counterparts. This enables carriers to provision eight times as many customers on a PON circuit and amortize the equipment and fiber costs over a much larger customer base, says the company. Also, Ethernet components are cheaper than those based on ATM, another important factor in keeping initial costs down. Gigabit Ethernet technology also provides a more scalable solution because it can support speeds as high as 1G bit/sec, while ATM taps out at 622M bit/sec.

" The Ethernet market in the metro area network is starting to take off, " says Michael Howard, principal analyst and co-founder of Infonetics Research. " The smaller upstarts are now forcing the bigger players like Qwest Communications to announce Ethernet services. It is going to be a big market. "

Other start-ups like Alloptic, OnePath Networks and Wave7 Optics are also developing Ethernet PONs. Salira says its solution is different from what others have proposed because it delivers robust quality of service, which allows carriers to support differentiated classes of IP services over a PON infrastructure.

But there is one big issue left to tackle: standards. While Salira claims that its first release, scheduled to ship in March of 2002, will support the IEEE 802.1p, IP precedence classification, DiffServ, and Multiprotocol Label Switching standards, these standards are for point-to-point Ethernet implementations and not for PON architectures, which are point to multipoint. This means that whatever standards are used will have to be adapted in a proprietary way to work in Salira's PON architecture.

ATM PON technology is based on Full Service Access Network specifications, which were developed by the International Telecommunication Union over the past 10 years and finally adopted last year.

This could be a problem for companies like Salira that want to sell to incumbent carriers. " While carriers don't get the same capacity they could with Ethernet PONs, and even though it's probably more expensive, they want standards, " says Bezoza.

The IEEE has already created a working group to address these issues, but nothing is expected to materialize by next year when Salira begins shipping its product. Still, the company is confident that carriers will see its value.

" I think with or without a standard, if we offer the same kind of service with Ethernet PONs for a lower cost, I don't think carriers will wait for a standard, " says Rick Li, Salira's vice president of software engineering.

Marguerite Reardon is a senior editor at Light Reading (www.lightreading.com), an optical networking Web site. She can be reached at reardon@lightreading.com