The introduction today by Alcatel-Lucent (ALU) News - Alert) of its FPE 400 Gigabits-per-second (G) network processor, the world’s fastest, will rightfully be greeted as big news. It is guaranteed to raise industry eyebrows. Featuring a fourfold increase in transmission speeds, 50 percent power consumption reduction without compromising service adaptability or quality, accommodating today’s transmission speeds and providing a nice glide path to the future, the announcement commands and demands attention.
More than 30 years as an industry analyst has made me cautious, skeptical and many times critical. Shifting the marketing surround to get to the meat is my mission. Explaining it is my passion. That said, in this instance my skepticism has been allayed. The FP3 has the look and feel of a game changer.
Analysts are voicing similar opinions. Michael Howard (News - Alert), Co-founder and Principal Analyst, Carrier and Data Center Networks, Infonetics Research, stated, “I’m impressed that any company could develop such a high capacity network processor, solving 400G in the electrical domain before the industry solves 400G for lightwaves. This 400G chipset is a generational advance that will improve router 100GE density/cost and will attract the eye of service providers.”
Service provider customers were laudatory as well. Verizon and NTT Communications executives were quoted with remarks similar to those of Karl Penaluna, President of Global Networks and Computing Infrastructure at BT, who said, “We see no end to our customers’ insatiable demand for bandwidth, especially on our Ethernet platform. As cloud-based services emerge and rich multimedia services proliferate, this type of technology can help us provide the best quality of service at even higher speeds.”
Let’s take a look at what the buzz is about.
FP3 — What it is, does and the innovation it represents
Available in 2012 as part of ALU’s IP routing portfolio, there is a lot to consider:
- Impressive ALU science involved in the FP3, and the ecosystem required to provide predictable or deterministic access to memory at unprecedented speeds and other capabilities.
- Market opportunities for ALU routing products and their role in driving the company’s High Leverage Network™ (HLN) vision.
- Service provider opportunities FPE deployment can enable and its impact on their customers.
Why is the FP3 a significant technological advancement? The reasons lie in the attributes, which, by going from 100G to 400G, will literally skip an innovation generation cycle, of what will be the industry’s first commercially available 400G network processor :
- Supports IP routing with full range of business, residential and mobile edge services
- Accelerates time to market for high-density 100G line card designs
- Highly integrated design reduces overall memory requirements
- Granular power management in 10G increments reduces overall power consumption by up to 50 percent per bit
- Leverages existing 40nanometer manufacturing process to reduce risk
- FP-3 based line cards for the ALU 7750 SR will be commercially available in 2-port 100GE, 6-port 40GE, and 20-port 10GE configurations in 2012
From a technology perspective, ALU is correct in touting this as important on three key fronts:
FASTER — 400 Gb/s packet processing delivers 400 percent performance gain and will, when deployed, accelerate adoption of 100G from network edge to core. What this translates into, for example, is that a single FP3 processor could handle 70,000 simultaneous High Definition video streams or 8.4 million simultaneous retail cloud sessions.
SMARTER —Delivers personalized services, content and applications, IPv4 and IPv6. It scales to support billions of people and machines and is fully programmable to adapt for the future.
GREENER — Up to 50 percent less power consumption per bit with up to 30percent less physical space in service provider premises makes IP networks more environmentally sustainable.
Putting this in a market context, demand for higher speeds and feeds with advanced services is booming — many say outpacing -- service provider abilities to generate the revenue needed to keep pace with the network infrastructure upgrades necessary to accommodate the traffic growth. For instance:
- Conservative estimates put bandwidth demand on a path that doubles almost every two years.
- We just passed a watershed where the roughly three billion mobile devices now outnumber fixed ones (and more and more are smartphones).
- Almost every new industrial or residential device can be IP connected, exploding into the billions the machine-to-machine (M2M) market.
- Demand for video could eat up more than over 70 percent of the bandwidth of the Internet within the next three years to accommodate YouTube (News - Alert), Hulu, Facebook, IPTV, Skype, business video and conferencing, etc.
As stated, the need is insatiable and growing. Service providers need new products and strategies to help them not just react but flourish in terms of market share as well as financially. FP3 is positioned to be part of the foundation for service provider success going forward.
Basil Alwan, president of Alcatel-Lucent’s IP Division, said, “This technology puts us a generation ahead of today’s fastest IP core routers. And it’s not just moving bits but generating revenue and creating value for service providers and their business, residential and mobile customers. By making networks faster, smarter and more environmentally sustainable, Alcatel-Lucent (News - Alert) is enabling the continuous innovation of consumer and business devices, content and applications that increasingly depend on service provider networks.”
What does this mean in terms of the addressable equipment opportunity? According to a recent forecast by Dell'Oro Group, the 100Gb/s port shipments from 2010 through 2015 are predicted to grow in excess of 200 percent annually.
Creating a glide path
Backing up for a moment, the last two points in the list above about 40nanometer manufacturing along with the availability of FP-3 based line cards for the ALU 7750 SR being commercially available in 2-port 100GE, 6-port 40GE, and 20-port 10GE configurations in 2012, are non-trivial from both the technology and market perspectives.
Leveraging today’s manufacturing processes instead of moving to new ones does more than simply “reduce risk.” It does so by avoiding the major costs moving to new ones. Offering the various port sizes, thus enabling service providers to adapt and evolve as market conditions demand, is vital.
As we have seen with so many “next big thing” network infrastructure products -- which are designed to stay in service provider networks for seven to ten years at a minimum -- two things typically happen:
- First, service providers hesitate to offer new services that will cannibalize profitable existing ones.
- Second, pricing of newer services tends to be cost-prohibitive for most of the market (for a variety of reasons) which means service providers can be circumspect about how fast they need to make network upgrades (always a highly complex process in the best of circumstances) sometimes creating interesting chicken and egg problems for both service provider and large customer CFOs.
Enabling service providers to leverage the savings from power consumption reductions while offering them the opportunity to meet market segment demands for speeds as needed an, easily accommodate the needs of larger and more sophisticated users (including mobile operators facing major backhaul needs), cannot be underestimated as a way to mitigate costs while driving revenues and profitability in the face of traffic growth projections.
The home-grown and ecosystem support advantages
A tip of the hat to Alcatel-Lucent for using its intellectual property in its core competency while engaging a dynamic ecosystem to bring the FP3 to fruition and market. At the heart of the FP3 are the ALU advances in the use of home-grown silicon. This is important in two respects:
Technically — Silicon defines platform capacity and performance, interface speed and density, services scope, scale, and evolution and power efficiency.
Competitively — As a result of the criticality of silicon, ownership of it is obviously crucial.
Amplifying the second point, silicon ownership allows ALU to optimize it for service provider applications and guarantee it will fit into the longer-term plans of customers as they address the evolution of their network infrastructure and services and the need for investment protection that does not impinge on the flexibility to scale and adapt to rapidly changing market demands. As such, it provides ALU a competitive advantage:
- Enabling them to control their own product and services development and rollouts.
- Creating differentiated value by supplying, managing and evolving increasingly complex networks thereby establishing significant barriers to market entry.
This marks the third time in its history that ALU has raised the network processor performance bar —first in 10G then 100G and now 400G. The company cites its prominent position in IP routing with “more than 100,000 Service Routing systems in use at more than 400 service providers in over 100 countries. “ It also says in 2010 Alcatel-Lucent’s IP Division reported revenues of €1.46Bn, representing 24 percent growth compared to 2009.
Finally, while ALU is proud of its accomplishments, it points to its partnerships with semiconductor industry leaders Samsung Semiconductor, NetLogic Microsystems, Micron, GSI Technology, Cypress, Broadcom and others to push the envelope of innovation on:
- High-speed DDR (double data rate)
- RLDRAM (Reduced-latency Dynamic random access memory)
- CAM (Content Addressable memory)
- QDR (Quad Data Rate) memory and memory access
This is enabling the industry to accelerate adoption of 100G speeds and to look over the horizon at what can come next.
The bottom line is, to quote Mr. Rogers, “It is a beautiful day in the neighborhood.” ALU has delivered on the promise of creating an industry breakthrough. How this plays out in the market will be exciting to watch.
Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest brands, including Avaya, Alcatel-Lucent, Telcordia, HP, Siemens, Nortel, France Telecom (News - Alert), and others, and having served on the Advisory Boards of 15 technology startups. To read more of Peter's work, please visit his columnist page.