Global Megatrends Driving Optical Innovation

The New Economy

Philippe Morin, SVP, Global Products Group

May 2010

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Global MegatrendsDriving Global Innovation

Drivers

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New economy and new business models are accelerating bandwidth growth

Devices and connectivity move from “nice to have” to necessity

Demands for HD video are fueling the next wave of bandwidth growth

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Corporate ProfitabilityBandwidth is Essential

Economic impact to IT solutions scheduled for deployment to maximize efficiencies:

Data Center Consolidation

Data Center Virtualization

Telepresence

Software as a Service

Serverless Branch

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Source: Webtorials, 2009

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Corporate Solutions Using Capacity to Increase Productivity

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Telepresence / video conferencing

Increasing current application performance

Telecommuting / Teleworking

Data center consolidation – serverless branch

Massive capacity, new economics

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New Global Distribution Models Accelerating Bandwidth Growth

• 1+ billion views a day• 20 hours of video uploaded every minute; equivalent of over 130,000 full-length Hollywood movie releases every week• More video is uploaded to YT in 60 days than all 3 major US networks created in 60 years• More page views every day than the primetime audience of all three networks combined• The world premiere of Wayne Wang's film, "The Princess of Nebraska" was viewed 165,000+ views during the first 48 hours it was posted.• Mobile uploads up 1700% in first half of '09; uploads have increased by 400% a day following the iPhone 3GS launch

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Source: YouTube, 2010

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Devices and Connectivity Move from “Nice to Have” to Necessity

Personal relevance and connectivity

Eliminating discretionary items ahead of connectivity

Staying relevant with world-impacting news events

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Mobile Broadband Accelerating Despite Economic Downturn

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HD Video will Fuel the Next Wave of Bandwidth Growth

Anything less than HD on any device will be unacceptable in 24 months

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Consumer and Business Video Applications Fuel the Next Wave of Bandwidth Growth

Ca

pac

ity

Internet SD Video

Quality of Experience

Internet HQ Video

Telepresence

VR Gaming

3D HD TVDC Consolidation

HD Video

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Internet TV / Video Fueling New Business Model

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Bandwidth Demand Scenarios

“Networks now are being used in a way that few people foresaw”David Payne, Institute of Advanced Telecommunications, Swansea University, UK

All previous assumptions must be challenged!

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Network Changing Innovation

Wireless techniques: increased spectral efficiency

Coherent Detection: Access to amplitude, phase, polarization

DSP: correcting signal degradations

Integrated in cost effective CMOS ASIC

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40G/100G with same or BETTER performance than 10G Networks!

Coherent Transmission System

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Creating Technical Discontinuity in the Optical Industry

1975 1980 1985 1990 1995 2000 2005 2010 2015

1 Mb/s

1 Tbps

1 Gbps

Capacity/C-band

TDM Evolution

WDM Evolution

Coherent Evolution

1 Pbps

New Era of Optical Networking

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Next Frontier

Many “impossible” challenges waiting to be solved

Achieving Terabit / λ in

the not so distant future

Access technologies a

magnitude lower in cost

Upgrading Upgrading capacity without capacity without

wholesale wholesale changeschanges

Reducing the complexity in the network

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The Way Forward…..

Steps to Take

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Understand Market Forces and Megatrends Shaping our Industry

Challenge Current Assumptions and Established Ways of Doing Business

Become an Advocate for the Industry

Thank you