Photonic Integration and theDigital Optical NetworkElectronics Before the Integrated CircuitComponents are costly, failure-prone, bulky, andpower-hungryResulting systems inherit the same problemsInfinera Confidential and Proprietary | 2Discrete electronic components.Enable pre-IC computing systemsThe Integration RevolutionFundamental improvements in cost, space, power,reliabilityA virtuous cycle as advances enable new applicationsincluding a transition from analog to digitalMoores Law improvements for 45 years and runningInfinera Confidential and Proprietary | 3INTEGRATED electronics.Results in pervasive computingConventional Optical Telecom TodayComponents are costly, failure-prone, bulky, andpower-hungryResulting systems inherit the same problemsInfinera Confidential and Proprietary | 4Discrete photonic components.Conventional DWDM systemsInfinera Confidential and Proprietary | 5100 Gb/s Transmit100Gb/s Transmit100Gb/s ReceiveInfineras Photonic Integrated Circuit Innovation5mmDIRECT BENEFITS:cost, reliabilitySize, power,STRATEGIC BENEFITS:Low-cost OEO conversion allows a digital networkparadigmResult: Lower CapEx, lower OpEx, more flexibleoptical networkInfinera Confidential and Proprietary | 6Infinera DTN: First PIC-based Optical PlatformPhotonic integrated circuits meanScale 10x faster than competitionDigital ease-of-use: 75%+ fewerman-hours to plan, engineer, deploy2-4x more ports per rack inchHigher reliability with 97% fewerfiber couplingsMaximum network flexibilityDigitally configure your systems forforecast tolerance to capacity needed,service mix, traffic matrixConventional DWDMDigital Optical Networkeach lambda requires planning,engineering, installation, fibercleaning, power balancingPICs mean each line card adds10 lambdas for faster, easier scaleConventional DWDMeach lambda requires planning,engineering, installation, fibercleaning, power balancing= DWDM terminal= ROADM or WSSDigital Optical NetworkPICs mean each line card adds10 lambdas for faster, easier scaleInfinera DTNswitched WDMsystemInfinera Confidential and Proprietary | 7DWDM Versus a Digital Optical Network:Scaling the NetworkConventional DWDMDigital Optical Networkthird party systems required forbuilt-in digital switching makescapacity delivery simple and flexibleConventional DWDMthird party systems required forswitching in complex networks= DWDM terminal= ROADM or WSSDigital Optical Networkbuilt-in digital switching makescapacity delivery simple and flexibleInfinera DTNswitched WDMsystemInfinera Confidential and Proprietary | 8DWDM Versus a Digital Optical Network:Integrated SwitchingConventional DWDMDigital Optical Networkintervention from planning andoperations staffGMPLS autoprovisions andreroutes around network failureGMPLSConventional DWDMDigital Optical Network “dumb pipes”mean manualintervention from planning andoperations staff= DWDM terminal= ROADM or WSSGMPLS autoprovisions andreroutes around network failureInfinera DTNswitched WDMsystemInfinera Confidential and Proprietary | 9DWDM Versus a Digital Optical Network:Software-based Network IntelligenceInfinera Confidential and Proprietary | 10Drivers of Infinera Market AdoptionSteepest possible cost-per-bit curvesMoores Law for photonicsEase of Use, SpeedThe optical layer finally goes digitalNetwork FlexibilityForecast tolerance to required capacity, traffic matrix,and service typesinggssincemoryesoryroocPMePrMem&hidtthdwwidanndBBaeraggetooraSStCost per bitSteepest Possible Cost Curves:New Cost Points Enable New Apps?TimeInfinera Confidential and Proprietary | 1150% every 50% every1.5 yrs 2 yrs?Cost per bitkorA:etwerrriranCafineInCo r ir eren B -naetwOn the steepest cost curve:Steepest Possible Cost Curves:New Cost Points Enable New AppsTimeRequired costto enable“Killer App”Canvtiol NorkOn the steepest cost curve:Offer compelling services or contentbefore competitors, or offer thesame services at lower costTime to MarketAdvantageInfinera Confidential and Proprietary | 12OSNR OtherVOAVOA GFFPhotonicsPhotonicsGFFOSNROtherEEEEEO-E-OEEEEEEEEEO-E-OO-E-OO-E-OO-E-OO-E-OO-E-OO-E-OO-E-OO-E-OO-E-OO-E-OO-E-OO-E-OO-E-OEDigital Electronics& SoftwareSignal regenerationError correctionSub- add/dropProtectionMultiplexingGrooming & switchingPerformance monitoringInfinera Confidential and Proprietary | 13Ease of UseThe Optical Layer Finally Goes DigitalEDFAElectricalOpticalEDFADCFROADMPMDConventionalDWDM systemarchitectureInfinera systemarchitecture1.2.3.4.5.6.Your Infinera network offers 100Gcapacity with each DLM.Service order comes in. Pre-provisionand test if desired.Order two Tributary Adapter Modules,one for each end point.TAMs arrive within 10 days of order.Install TAMs, activate, and test.Connect to client system, service is up!Network Flexibility: “Rapid Reaction” Networkand Just-In-TAMService Order:10G waveSF-PHLAInfinera Confidential and Proprietary | 14“As a planner, itsimpossible to know whatbandwidth a customer willwant in a years time.”Peter Boland, SVPPlanning and Engineering,FLAG TelecomInfinera Confidential and Proprietary | 15Market TractionAs of August 2006 (21 months post-FCS)9 announced networks4.3M PIC field hours with zero failures#1 in deployments of long-haul capacity in 2005 and2006 up to todayA new paradigm in simplicity and flexibility for opticalnetworksInfinera Confidential and Proprietary | 16Customers Touting Infinera as a StrategicAdvantage10,0008,0006,0004,0002,000012,000InfineraAlcatelCienaFujitsuHuaweiLucentMarconiNECNortelSiemensOtherRapid Adoption of Digital Optical NetworksQuarterly 10G LH DWDM Wavelengths Deployed Worldwide3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06Source: DellOro GroupInfinera Confidential and Proprietary | 17Infinera takes #1spot with 20%Today: #1 with29% shareFiber Output Power (dBm)Infinera Confidential and Proprietary | 18PIC Futures: 1.6 Tbps PIC Demonstration0-10-20-30-40-50-60-701.5651.5501.5451.555 1.560Wavelength (m)CH1CH2CH3CH4CH6CH7CH8CH9CH11CH12CH13CH14CH16CH17CH18CH19CH21CH22CH23CH24CH26CH27CH28CH29CH31CH32CH33CH34CH36CH37CH38CH39Single Monolithic Chip40 channel x 40 GbpsData Capacity Per Chip (Gb/s)Scaling of InP Device Data Rate in TelecomTransmission NetworksCurrent IP NetworkCAGR: 70-100%0.110010110000100019751985199520052015DWDM PICsEML400 Gb/s100 Gb/sTunable EMLwith SOA1.6 Tb/sDevelopmentDevicesData rate perdevice hasremained at10Gb/s forpast 10 yearsOnly Photonic Integration Enables ContinuedCost-Effective Scaling of Network CapacityInfinera Confidential and Proprietary | 19Data rate has doubledevery 2.2 yearsDMLInfinera Confidential and Proprietary | 20Infinera SummaryLeader in photonic integrated circuits and onlyPIC-based systems manufacturerPIC direct benefits: Space, power, reliability, costStrategic benefits: OEO conversion and digitaloptical networksStrong market adoptionSatisfied customer baseA differentiated and (we believe) compelling future