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Impact of Cisco Systems’ Purchase of Tail-f?

August, 2014

What happens to Tail-f and to all of its customers after the acquisition by Cisco? Do those customers have to find a new partner? Will Cisco keep it open to all vendors and competitors? Does Cisco imbed it and no longer allow access to third parties? Each customer probably had an agreement with Tail-f in case of an acquisition. It may be on a case-by-case basis, but in terms a macro answer, these days, there are not purchases without putting in a clause for M&A. For small suppliers, it can be quite detrimental. For example, regarding a component company that was purchased in 2013, large module and system suppliers, such as Finisar, Juniper, etc., put in a stipulation that if the vendor was acquired, and did not supply the devices at ridiculously low prices, then they can take hold of the IP, and produce them somewhere else. It is a Catch 22 situation. If one refuses...

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Silicon Photonics: Widespread Usage on Active Components Doubtful

September, 2014

While the amount of industry chatter about silicon photonics rose substantially in 2014, partially because of certain market research firms looking to sell more reports, the technological hurdles, especially with insertion loss, make extensive use of active, combined components, such as for modulators and photodetectors, unlikely in the foreseeable future. Although there have definitely been numerous demonstrations of integrating with these CMOS fabrication processes, like with receivers, both the performance and cost are superior with standard methods. Certainly for passive devices, silicon lends itself quite well to integration, including for AWGs. Instead of using micro optics, combining waveguides with attenuators is being accomplished with Si. With 100G receivers, the delay lines are being integrated with the phase combiners...

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New M&A Types of Players In Optics

November, 2014

In recent weeks, there has been a flurry of acquisition activity with three optical component companies being purchased by non-traditional kinds of acquirers, particularly players in the short distance, communications market including data centers. These buyers, such as Huber+Suhner and its takeover of Cube Optics, are definitely concerned about an adequate supply of componentry being available. Evidently, even big enterprises with large data centers have the same types of worries as they are also investing in optical device development, as pointed out in a previous blog article. M/A-COM bought BinOptics at the premium price of $230 million (probably four to five times revenue) to ensure adequate access to laser semiconductors. The bottleneck created by Avago Technologies' pickup of CyOptics last year...

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Finisar Buyout of JDSU’s CCOP Inevitable?

December, 2014

Simply by a process of elimination, it is difficult to foresee any other player besides Finisar being interested in purchasing JDSU’s planned spinoff of its optical components portfolio, Communications and Commercial Optical Products (CCOP). Such a deal would provide Finisar with further diversification in the telecommunications transport space as well as potentially in new business sectors. Also, to whatever extent they presently go head to head with each other, it would eliminate a competitor from engaging in the cutthroat pricing behavior that is so prevalent in the market today. With its heavy focus on data communications, some industry observers have mentioned Avago Technologies as a possible acquirer of those JDSU assets in order to broaden its product line. However, there is a high likelihood that Avago would have a hard time justifying such a takeover after its...

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Cisco: Buyer of Potential Finisar-JDSU Combo?

December, 2014

If Finisar purchases JDSU’s CCOP division, would a systems integrator be interested in buying the combination? Unquestionably, there have been rumors in the past that Cisco Systems would buy Finisar, which with CCOP, would make Cisco’s previous component acquisitions pale in comparison in terms of cornering the market. Moreover, the full system supplier has been Finisar’s biggest customer for a long time. There is a school of thought that when Cisco decided to cease having a distinct transport business unit, it was making a statement that optics stopped being an end in itself – it was really a means to an end. While selling optical network gear remains part of its general strategy, its principal purpose is supposedly to tie routers and...

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