Staying on the right side of change
LightCounting reports from Juniper Networks’ annual user conference held in Las Vegas in October 2018
Juniper’s annual conference was first held in 2015 and it has been growing steadily in size. The attendance exceeded 1,000 in 2018, filling out a very spacious floor of the Mandalay Bay convention center in Las Vegas.
It was an energetic and productive event. Juniper products and customer support were praised in presentations given by customers and more importantly in many private conversations. Juniper announced several new products and partnerships at the show:
- Juniper Networks and Nutanix Partner for Improved Network Automation and Security
- Juniper Networks Fosters Adoption of Network Automation
The vibe suggested that the company must be growing rapidly, but a quick look at their quarterly revenues points to a different picture. Juniper’s quarterly revenues are steady at about $1.2 billion. For comparison, Arista Networks is growing rapidly. Cisco’s quarterly sales are steady at around $12 billion.
Juniper sells routers, switches, security and software into three main market segments: Communication Service Providers (CSPs), Internet Content Providers (ICPs), which Juniper refers to as Cloud Providers, and Enterprises. The majority of the attendees at this event were Enterprise customers and this segment of Juniper’s business is doing well in 2017-2018.
The company is fighting an uphill battle against Cisco, which has dominated the enterprise networking equipment market for decades, but it is making progress. Experts claim that Juniper did a much better job than Cisco with their SDN and NFV software products. Customers appreciate Juniper’s efforts at helping them to transition their networks into the Cloud or even the MultiCloud era, as Juniper’s CEO Rami Rahim referred to it.
The term “MultiCloud” refers to a seamless operation of applications running over telecom networks, and in public and private Clouds. “Operating distributed resources as a single system with ease” was one of Juniper’s slogans at the event. “Declaring war on complexity” (and Cisco)- was another one. The best one was “Juniper solves super hard problems that change the world”. The message certainly resonated with the crowd of innovators at the event.
Software is taking on a key role in making networking simple and reliable. Abstracted, programmable, automated – this is one of the major changes that Juniper has to be on the right side of.
Juniper’s CTO Bikash Koley, who spent almost 10 years as a network architect at Google prior to joining Juniper in 2017, gave an inspiring presentation at the event. He is certainly bringing some of the Google culture of innovation to Juniper and proudly presented the time scale of the latest software innovations at the company with new releases spaced by 12-18 weeks (yes weeks not months).
In response to LightCounting’s question on their view of white box switching hardware and open source software, Bikash Koley responded: “We love it. I was behind many of these initiatives at Google and Juniper offers white box hardware and supports open source software interfaces. Designs of white boxes lag behind Juniper’s products, but we do not allow our engineers to touch them.”
This is another major change that Juniper is staying on the right side of. However, the company is certainly more excited about white box ROADMs and DWDM transport systems, where Juniper’s hardware business has less to lose.
Juniper’s recent acquisitions of BTI Systems and Aurion bring more optical talent into the company. It is very likely that Juniper will report on its progress in Silicon Photonics solutions at OFC 2019. This is yet another industry change that Juniper is on the right side of. Are you on the right side of Silicon Photonics?
If not, this is a link to LightCounting’s report on Silicon Photonics and other technologies for optical integration: https://www.lightcounting.com/Silicon.cfm.
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LightCounting is a leading optical communications market research company, offering semiannual market updates, forecasts, and state-of-the-industry reports based on its analysis of primary research with dozens of leading module, component, and system vendors as well as service providers and other users. LightCounting is the optical communications market’s first choice source for the accurate, detailed, and relevant information necessary for doing business in today’s highly competitive environment. For more information, visit: www.LightCounting.com or follow us on Twitter at @LightCounting.
3D Sensing for Self-Driving Cars Reaches the Peak of Inflated Expectations
LightCounting releases a new report addressing illumination in smartphones and automotive lidarIn 2019, the market for VCSEL (vertical cavity surface-emitting laser) illumination in smartphones will exceed $1.0 billion – now nearly triple the size of the market for communications VCSELs. That’s quite remarkable for a market that didn’t exist three years ago.3D sensing in smartphones felt like an overnight sensation, but the technology foundations were laid down years ago with Microsoft’s Kinect – a motion-sensing peripheral for gamers released in 2010 but discontinued in 2017 after lackluster sales. Lumentum supplied lasers to the Kinect almost a decade before the iPhone opportunity emerged; the company was ready to profit from the iPhone X opportunity when Apple decided to launch 3D sensing for facial recognition in September 2017.
Figure: 3D depth-sensing meets the Gartner Hype Cycle
Source: Gartner with edits by LightCounting
If all technologies follow the Gartner Hype Cycle, shown in the Figure above, then 3D sensing in smartphones is now moving up the slope of enlightenment. Android brands raced to add 3D sensing to their flagship phones in 2018 – the Xiaomi Mi8 Explorer and Oppo Find X phones were first – although these only sold in single digit million quantities. Huawei also brought out new phones with 3D sensing, but the ongoing U.S. export ban on the Chinese company must be hurting the company’s traction outside China. Apple continues to dominate the market as all new iPhones released by Apple since 2017 have included 3D sensing on the front of the phone. Apple is expected to introduce 3D sensing for ‘world-facing’ applications in 2020, which adds another laser chip to every phone.
Last year illumination for lidars were not included in our market forecast since LightCounting considered it unlikely that lidar would penetrate the consumer market to any great extent over the forecast period. All indicators now point to a market for lidar illumination ramping up in 2022 and beyond. Optical components firms are now shipping prototypes and samples of VCSELs, edge emitters and coherent lasers to customers developing next-generation lidar systems – many of them building on their expertise in illumination for optical communications and smartphones.
As was the case with smartphones, the foundations for lidar technology were laid down much earlier – in this case with the DARPA Challenge 2007, where the winning vehicle used a 64-laser lidar system from Velodyne Acoustics (now Velodyne Lidar). Lidar is considered by the majority of the industry to be an essential part of the sensor suite required for autonomous driving, helping the vehicle to navigate through the environment and detect obstacles in its path. The first commercial deployments have begun. In Germany, lidar on the Audi A8 enables the car to drive itself for limited periods under specific conditions. In Phoenix, Arizona, you can hail a ride in a Waymo robotaxi.
Investor enthusiasm for lidar is undeniable with nearly half a billion dollars invested in lidar start-ups in 2019 according to our analysis of publicly available investment data. Notable deals include $60 million for U.S. company Ouster in March, Israel’s Innoviz Technologies Series C round of $132 million in the same month, and $100 million for U.S.-based Luminar Technologies in July. Interestingly, these examples illustrate the variety of lidar approaches: each company is building a different type of lidar based on a different wavelength: 850nm for Ouster, 905nm for Innoviz and 1550nm in the case of Luminar. There’s an open technology battle and they can’t all be winners.
The automotive lidar market seems to be close to the peak of ‘inflated expectations’. It’s easy to understand why. The automotive industry is enormous, with nearly 100 million vehicles (including trucks) produced annually. Players like Baidu, GM Cruise and Waymo are backed by deep corporate pockets, and new entrants like Aurora and Pony.ai are attracting hundreds of millions in investment. Intel’s $15.3 billion purchase of Mobileye in 2017 was also directed at autonomous driving. Sensor company AMS is in a $4.8 billion battle to acquire German semiconductor lighting firm Osram with its eye firmly on lidar.
However, signs indicate that the descent into the trough of disillusionment could have already begun. Waymo has yet to roll out its robotaxi services more widely – and this summer admitted that its vehicles needed more testing in the rain. GM Cruise has delayed launch of commercial services for self-driving cars beyond 2019 and is reluctant to commit to a new timescale, with its CEO Dan Ammann observing that safety is paramount; automotive is not an industry where you can “move fast and break things” he said. A casualty of the slow pace was optical phased array lidar developer Oryx Vision, which closed its doors in August and started to hand money back to investors.
While lidar is being deployed commercially today, prices are not conducive to mass production, and there are open questions around regulation, safety, ethics and consumer acceptance. Do local laws prohibit self-driving cars? Will they really be safer than humans? Who is responsible for a crash? LightCounting remains skeptical about the pace of adoption of autonomous vehicles, but will be watching the market closely and with optimism.
More information on the report is available at: https://www.lightcounting.com/Sensing.cfm.