How Infinera Turned Thinking about Optics on its Head

A Q&A with Jagdeep Singh

Right. And so Infinera’s answer to the problem was ...
Singh: “Our fundamental insight was that you can’t get rid of the digital access, you have to be able to process the bits, because that’s the business the carrier’s in. And if you’re doing it electronically you need some way to have a low-cost O-E-O mechanism.

“The reason why O-E-O is expensive is because each O-E-O consisted of lots of discreet components – there were lasers to generate light, and modulators to turn it off and on, and photodiodes to receive light, and so on. And each of these elements, if you took a look at it from a typical laser package, typical lasers sell for about $1,000, but the laser diode chip that emits light only costs a few tens of dollars, maybe $20 or $30. So what you’re really paying for is the opto-mechanical packaging and subassembly around the device, not the actual device itself. And so, given this is true for all the other devices as well, the most direct way to reduce costs was to integrate ... all these different elements.

“We took the equivalent of 60 separate, discreet elements – and integrated them monolithically into a single pair that you’d classify as photonic circuits.”

Infinera believes this type of integration is going to be the wave of the future, pardon the pun, for the optics industry, correct?
Singh: “In general, what we’ve said is over the next 15 to 20 years there’s no question that everybody is going to have photonic integrated chips. The reason for that is it’s the only way to fundamentally get the cost structure to rationalize.”

Many new companies, even if they have great new ideas, find it impossible to compete with the big telecom suppliers, who are already embedded into the networks and organizations of the telcos. How was Infinera able to break through that barrier?
Singh: “The reason we’ve been able to do that is because of value proposition. When we started the company, people told us ‘Carriers don’t buy from startups, you’re not going to be able to sell to carriers because the telecom industry is in a downturn. They want big, profitable companies [as suppliers].

“And our answer was ‘Look, it’s a function of how much better you are than the competition.’ If you’re 10 or 15 percent better, yea, you’re right, you’re not going to be able to get over the threshold to sell to the carriers. But if you’re compelling enough better, then the converse will be true, which is that they can’t afford not to look at you because if their competitors are and it gives them real competitive advantage, then how can they not consider you?”

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