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INVESTING IN PENNSYLVANIA’S FUTURE

Infinera: A Critical Part of the Internet’s “Circulatory System”

Typical web users don’t think much about how the Internet works to send email and instantly connect to videos, news and shopping sites-any more than they think about how their hearts, lungs, liver and kidneys keep their bodies running smoothly. But the inner workings of the World Wide Web are critical to both its speed and its connectivity. If the Internet were a living creature, its circulatory system would be the vast network of fiber optics systems that carries data to points around the world.

Infinera

Infinera develops the optical networking systems that are essentially the “circulatory system” for the Internet, carrying data from point to point around the United States and the world.

One of the leading manufacturers of these optical networking systems is Infinera, headquartered in Sunnyvale, CA, with offices around the world, including Allentown, PA. “All Internet traffic rides over fiber optics systems,” says Jeff Ferry, senior director of communications at Infinera. “Our customers include Level 3 Communications, XO Communications and Cox Communications-companies that carry a significant portion of the world’s Internet traffic. These big players have all chosen Infinera as their system of choice.”

A Crucial Communications Node

One of Infinera’s initial investors was Ben Franklin Technology Partners (BFTP). BFTP invested $150,000 for three years, for a total of $450,000, which went toward crucial development efforts. “But they provided much more than just money,” says Mike Reffle, vice president of modules at Infinera in Allentown, PA. “Our BFTP contact, Al Philpotts, was like a communications node. He plugged us into all kinds of expertise across the Lehigh Valley and Pennsylvania.”

For example, with the help of BFTP, Infinera utilized the Center for Optical Technologies at Lehigh University for a number of studies, including an extensive investigation of their next-generation technology. “There were times in early development when we would have a failure of an initial part,” Reffle recalls. “The folks at BFTP would drop everything and get some brains together to assist us in determining root causes and corrective actions.”

A Different Kind of Internet Technology

2007 was a great year for Infinera, and Ferry says the company is excited about its present position in the optical networking market. “It’s a $15 billion industry, and we’re the most highly differentiated new entrant into this market in many years,” he says. “We are number one in shipping long-haul optical networking systems in the North American market, and number four globally.”

Infinera’s success is remarkable because they have grown so quickly-from zero revenue in 2000 to $309 million in sales in 2007. In addition, Infinera raised $320 million dollars in venture capital between 2001 and 2006 to build their technology.

“When this company was founded in 2001, the telecom industry was contracting and declining rapidly,” says Ferry. “Many people were surprised that we were able to raise the money; we are very grateful to our backers for supporting us through that downturn.” The company started with three founders in 2001 and is now 800 employees strong.

According to Ferry, Infinera’s novel thinking is at the root of its success. “Our technology is different from everybody else’s. We came into this market with a radically new solution based on PICs [photonic integrated circuits] that combine 60 optical devices on a pair of chips,” Ferry says. “Nobody had ever succeeded in integrating dozens of optical devices on a single chip and producing those chips commercially.” For Infinera’s customers, this means more Internet capabilities in a smaller space for a cheaper price.

Infinite Internet Possibilities

Like the Internet itself, the possibilities at Infinera seem infinite at this point. “We announced in February that our next generation of PICs will go from 100 gigabits on a pair of chips to 400 gigabits-a fourfold increase,” Ferry says. “In fact, we expect to double the capacity of our chips every three years.”

Ferry adds that these constant advancements are critical if the Internet is to continue to scale with the kind of growth we have seen in recent years, especially on the video front. “We have seen the rise of user-generated video,” he says, “and television channels are beginning to use the Internet more aggressively to broadcast. Photonic integration is the only technology that can enable the fiber optic network to scale to accommodate Internet growth, and Infinera is the recognized leader in photonic integration.”

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This article was featured in
Keynotes June, 2008
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