- Nokia is weighing a move to expand from connecting data centers to connecting the compute inside them
- The big questions are whether it should chase near-packaged optics or co-packaged optics, and whether it builds its own box or just supplies lasers
- Scale-out is the initial target, but near-packaged and co-packed optics could also address scale-up in the future
Nokia has the one thing everyone in the optical world is clamoring for: lasers. And that could give the company a leg up as it eyes a move to establish itself in data center networks.
Nokia is already a well-known name in the scale-across domain, with its products anchored by coherent optics technology serving long-haul transport and data center interconnect use cases. But Rob Shore, head of Optical Networks Solution Marketing for Nokia Network Infrastructure, told Fierce the company isn’t a one trick pony.
“I think it’s probably obvious we’re going to do more than just coherent solutions,” he said, noting the company recently expanded its manufacturing facilities in San Jose and is doing the same with a plant it acquired from NXP in August. “Anything that involves a laser, there’s no reason Nokia should not be part of that.”
Lasers, of course, show up in a variety of network elements, including amplifiers. But notably, they also show up in optical solutions vendors are building to solve challenges in the data center scale-up (chip-to-chip) and scale-out (rack-to-rack) domains.
That, of course, prompted Fierce to ask: Is Nokia looking to get into scale-out and scale-up networks?
The short answer is yes. Well, at least probably.
So long, digital signal processors
Here’s what’s happening: AI is driving a need to increase speed and reduce power consumption in data center networks. That means a shift away from pluggable transceivers that rely on electrical digital signal processors (DSP) and a move toward solutions that integrate the optics inside the chassis of the switch.
Dell’Oro Group Research Director Frank Yang told Fierce that anywhere from 30-40% of pluggable power is consumed by the DSP. So removing them can increase efficiency and reduce power consumption. It also lessens cooling requirements given the less electricity you consume the less you need to cool. Additionally, it can help reduce costs and improve signal integrity.
The replacement for these old DSP-dependent technologies is a new wave of optical options, including near-packaged optics (NPO), which place the optical engine on the same board as the processor, and co-packaged optics (CPO), which place it on the same silicon substrate.
To date, most discussions around NPO and CPO have focused on scale-out applications. But as chip densities climb, NPO and CPO could also be applied to scale-up. Yang said thus far, most of the conversation around NPO and CPO for scale-up is focused on large, multi-rack applications. But overall, the scale-out opportunity is a bit more clear than the scale-up one at this point, he said.
Will NPO or CPO win out?
The problem Nokia – and the market at large – is facing is a lack of consensus around whether NPO or CPO will win out. (For what it's worth, Nvidia seems to have placed its bet on CPO). Shore said he expects CPO will be great for early adopters but expressed doubts about its long-term viability. Yang said one of the advantages of NPO is that certain elements can be replaced in event of failure due to the way things are packaged.
Nokia also has to decide whether it just wants to supply external lasers to the market or build its own complete NPO or CPO solution.
“We haven’t made a lot of announcements in this space because we’re still in the technical playground phase of things for NPO and CPO,” Shore said. “The question for us is which one of those does it make the most sense for us to build…Whether or not we build NPO solutions, CPO solutions or we just provide external laser sources, that’ll play itself out. We are looking at those things. I think it’s safe to say Nokia will get into that market.”
“In general, I think the market is going to go NPO more than CPO, and Nokia will, in some fashion or another, be part of that,” he added.
Should it follow through, Nokia will have a fair bit of competition on its hands. As a provider of external lasers, it would be competing with Lumentum, Coherent and at least two dozen Chinese suppliers. Shore, however, noted that given the demand for lasers it’s more likely that Nokia would simply expand the market rather than stealing anyone’s share. He also noted U.S.-based hyperscale companies might be hesitant to source from Chinese vendors.
On the NPO side, it would likely be up against the likes of Lumentum, Coherent, Ciena and Cisco (via its Acacia assets), as well as a raft of startups like Lightmatter.
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