Carriers and system vendors will return to investing in core technologies that make no sense for the venture world but will give them a competitive edge. So believes Ian Jenks, general partner at venture firm, Crescendo Networks, speaking at the ONE 2006 conference at ECOC.
Summarising the optical landscape today, he stresses there are no IPOs, few buyers with shallow pockets only, and average technology exits of U.S. $83m. "Bleak but maybe getting better," says Jenks.
He argues that one consequence of convergence will be to bring people together. "People deliver services collect $3 trillion a year, equipment makers $14 billion and optical components makers $2 billion." And with bandwidth demand greatly outstripping supply he expects users will become increasingly frustrated with the slow responsiveness of getting and delivering content. "It [demand for bandwidth] has never been linear, its always been boom and bust."
He thus sees a requirement for new investment in core optical technologies which he foresees coming from carriers and vendors, not VCs, that will give them a competitive edge. "They will rediscover the reasons for their success," he says.
Are carriers and equipment vendors missing out by not working more closely - and funding - innovative optical component start-ups?
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