Blaine Bateman set himself an ambitious goal when he started researching the topic of silicon photonics. The president of the management consultancy, EAF LLC, wanted to answer some key questions for a broad audience, not just academics and researchers developing silicon photonics but executives working in data centres, telecom and IT.
The result is a 192-page report entitled Silicon Photonics: Business Situation Report, 59 pages alone being references. In contrast to traditional market research reports, there is also no forecast or company profiles.
Blaine Bateman's risk meter for silicon photonics. Eleven key elements needed to deploy a silicon photonics solution were considered. And these were assessed from the perspective of various communities involved or impacted by the technology, from silicon providers to cloud-computing users. Source: EAF LLC.
“I thought it would be helpful to give people a business view,” says Bateman.
Bateman works with companies on strategy in such areas as antennas, wireless technologies and more recently analytics and machine learning. But a growing awareness of photonics made him want to research the topic. “I could see a convergence between the evolution of telecom switching centres to become more like data centres, and data centres starting to look more like telecoms,” he says.
The attraction of silicon photonics is that it is an emerging technology with wide applicability in communications.
Just watching entirely new technologies emerge and become commercially viable in the span of ten years; it is astonishing
“Silicon Photonics is a good topic to research and publish to help a broader community because it is highly technical,” says Bateman. “It is also a great case study, just watching entirely new technologies emerge and become commercially viable in the span of ten years; it is astonishing.”
Bateman spent two years conducting interviews and reading a vast number of academic papers and trade-press articles before publishing the report earlier this year.
Blaine BatemanThe main near-term opportunity for silicon photonics he investigated is the data centre. Moreover, not just large-scale data centre players with an obvious need for cheaper optics to interconnect servers but also enterprises facing important decisions regarding their cloud-computing strategy.
“The view that I developed is that it is still very early,” he says. “The price points for a given performance [of optics] are significantly higher than a Facebook thinks they need to meet their long-term business perspectives.”
The price-performance figure commonly floated is one dollar per gigabit but current 100-gigabit pluggable modules, whether using indium phosphide or silicon photonics, are several times more costly than that.
This is an important issue for cloud providers and for enterprises determining their cloud strategy.
Do cloud provider invest money in silicon photonics technologies for their data centres or do they let others be early adopters and come in later when prices have dropped? Equally, an enterprise considering moving their business operations to the cloud is in a precarious position, says Bateman. “If you pick the wrong horse, you could be boxed into a level of price and performance, while you will have competitors starting with cloud providers that have a 30 to 50 percent price-performance advantage,” he says. “In my view, it will trickle all the way to the large consumers of cloud resources.”
Longer term, the market will resolve the relative success of silicon photonics versus traditional optics but, near term, companies have some expensive decisions to make. “The price curve is still in the early phase,” says Bateman. “It just hasn’t come down enough that it is an easy decision.”
Bateman’s advice to enterprises considering a potential cloud provider is to ask about its roadmap plans regarding the deployment of photonics.
Findings
To help understand the technology and business risks associated with silicon photonics, Bateman has created risk meters. These are intuitive graphics that show the status of the different elements making up silicon photonics and the issues involved when making silicon phonics devices. These include the light source, modulation method, formation of the waveguides, fibering the chip and fabrication plants.
“The reason the fab is such a high risk is that even though the idea was to leverage existing foundries, in truth it is very much new processes,” says Bateman. “There is also a limited number of fabs that can build these things.”
The report also includes a risk meter summarising the overall status of silicon photonics (see above).
Bateman says there are concerns regarding silicon photonics which people need to be aware of but stresses that it is a viable technology.
This is one of two main conclusions he highlights. Silicon photonics is not mature enough to be at a commodity price. Accordingly, taking a non-commodity or early adopter technology could damage a company’s business plan in terms of cost and performance.
The second takeaway is that for every single aspect of silicon photonics, much is still open. “One of the reasons I made all these lists in the report - and I studied research from all over the globe - is that I wanted to show the management level that silicon photonics is still emerging,” says Bateman.
China is focused on innovation now, and has formidable resources
This surprised him. When a new technology comes to market, it typically uses R&D developed decades earlier. “In this area, I was shocked by the huge amount of basic research this is still ongoing and more and more is being done every day,” says Bateman. “It is daunting; it is moving so fast.”
Another aspect that surprised him was the amount of research coming out of Asia and in particular China. “This is also something new, seeing original work in China and other parts of the world,” he says.
The stereotypical view that China is a source of cheap manufacturing but little in terms of innovation must change, he says. In the US, in particular, there is still a large body of people that think this way, says Bateman: “I feel they have their head in the sand - China is focused on innovation now, and has formidable resources.”