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Juniper CEO: On the cusp of transforming economics of optical networking

Tim Greene | Oct. 7, 2016
Will there be cost reduction due to this recent purchase?

Juniper Networks CEO Rami Rahim believes his company’s recent purchase of silicon-photonics vendor Aurrion may lead to a major cost reduction for high-speed networking gear.

Rahim says he thinks “we are potentially on the cusp of a real breakthrough that will transform the economics of the optics in networking equipment, which obviously will be of great interest to anybody that is building a large, mission-critical network.”

The big benefit for customers will be a better price per bit per second in Juniper’s high-speed networking gear, Rahim said in a phone interview during a break from the company’s NXTWORK 2016 (see highlights of the audio interview below). “It will also help Juniper in maintaining its long-term objective for growth margins of our products.”

Silicon photonics combines integrated circuits with semiconductor lasers to produce chips that can transfer data faster between optical and electronic network segments. The optoelectronic components of networking systems represent more than half the cost of the systems, according to Juniper.

Juniper and Aurrion have been partnering on its optoelectronic technology for more than two years, so Rahim knew Aurrion’s technology well and that it could become what he sees as a game-changer. He says that Juniper “waited until the risks associated with investments in this area were small enough that we believe that the potential for a real breakthrough product was actually very meaningful and that’s when we decided to pull the trigger on acquisition.”

Juniper further hopes to improve the economics of high-speed networking by developing, demonstrating and pushing for standards at the optical layer of networks. Currently inefficiencies in moving optical traffic from one vendor’s gear to another’s and between the IP and optical layers eats up bandwidth – “several tens of percents” of the total bandwidth involved, he says.

“Today,” he says, “because of the fact that the IP and optical layers are managed and administered separately, not as a single layer but as two separate layers with separate teams that look after them, there is wasted or stranded capacity. By combining them and optimizing them and automating them simultaneously you now free up the capacity, and that capacity is really gold in the face of the slowing of Moore’s Law and other performance challenges that we are facing today as an industry.”

In addition to saving costs, such standards will enable customers to avoid vendor lock-in because multi-vendor networks will be much easier to deploy. That’s not how it is today. “Once you have made a decision for one network element, pretty much every element in the optical network needs to be the same vendor because of that lack of interoperability that exists in that space,” he says.


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