editorial

Supply and demand2

As if we needed another reminder, this month's "Market Intelligence" article on the future of submarine network installations illustrates once again how the current supply-versus-demand dynamic threatens to warp the marketplace. Everything, it seems, is in short supply: fiber, cable, components, and subsystems are consumed as fast as they're produced. Even faster, in some cases-a chip supplier told me recently that a potential customer was willing to sign on the dotted line for a component whose development wasn't finished yet if the supplier could demonstrate a road map that intersected where the customer thought he would be a few months in the future.

Bandwidth, of course, remains in short supply, as well. Bandwidth glut, my eye-it is quickly becoming apparent that adding capacity to the network is one thing, and unlocking that capacity in such a way that end users can access it is another. Try telling your average business end user waiting for something bigger than a T1 that there's too much bandwidth on the market.

However, the result of the extreme unbalance between supply and demand has produced at least one benefit for our community. Suppliers-whether they're offering components, systems, bandwidth, or services-are being forced to pay significant attention to delivering their offerings in a more timely fashion. On the equipment side of things, recognition that automation must replace the old hand-tooled approach to assembling optical-communications components has begun to spread from vendor to vendor.

As an example, a representative of an optical-component startup revealed that his company's engineers had been told that senior management would reject any design that required hand assembly. "Produceability" is now taking a position beside capability, when it comes to evaluating equipment design.

Of course, the goal of much of today's equipment design activity is the provision of systems that will enable carriers to "produce" bandwidth on demand. Carriers with an eye toward the long term must consider how to design their networks to enable flexible service and bandwidth delivery. In particular, these network architectures must allow customers to set up and tear down bandwidth themselves, to meet their needs quickly and efficiently without asking carriers to roll a truck out to their site.

Again, "produceability" will differentiate success stories from obituaries if and when the carrier market begins to shake out.

Stephen Hardy
Editorial Director &
Associate Publisher