Calix, 10 Years Down the Road, Is Born Again with All-Ethernet E7 Platform

| Nov 11, 2009 | Broadband Infrastructure | Competitive Intelligence Report

| Analyst: Erik Keith

Current Perspective: Positive
Vendor Importance: Very High
Market Impact: High

Event Summary

November 9, 2009 -- Calix unveiled the E7 Ethernet Service Access Platform (ESAP), a modular, chassis-based, pure Ethernet platform architected for carrier-class performance, deployment flexibility, and management simplicity. Marrying a 100 Gbps backplane with a one-rack unit (RU), two-slot chassis, the E7 can deploy any mix of GPON, point-to-point GigE or Active Ethernet (AE), and 10GigE transport for business and residential services, allowing operators to combine and manage multiple E7 platforms as a single network element.

Analytical Summary

• Current Perspective: Positive on Calix’s introduction of its new flagship fixed access solution, the E7 Ethernet Service Access Platform. After 10 years of strong commitment to its C7 series multi-service access platform (MSAP), Calix has finally unveiled an all-Ethernet fixed access solution, designed to address what is essentially the “final stage” of fixed access network development (i.e., Ethernet + fiber access). As fixed line operators are compelled to deliver high-bandwidth services such as multi-stream HDTV to each end user premises, IP/Ethernet-based full-fiber access systems are the most future-proof option; to this end, the Calix E7’s scalable/modular architecture is a very compelling solution for fixed access operators moving forward.

• Vendor Importance: Very high to Calix, which needed to address a long-time Achilles’ heel: the legacy architecture of the company’s C7 solution, which was designed to support legacy MSAP services including cell-based (TDM/ATM) traffic. The new E7, with its “pure” Ethernet design, not only eliminates one of the company’s so-called weak points, but also enables Calix to become more aggressive on the sales/marketing front, as the company now offers both a well-proven MSAP solution (Calix has at least 400 C-series customers to date) and a full-bore Ethernet solution that is very attractive to operators given its scalability and ultra-high bandwidth/advanced services enablement proposition.

• Market Impact: High on the North American fixed access market, which remains Calix’s only target market to date, and where Calix has garnered virtually all of its success (North American customers include Caribbean and several other non-U.S. operators). With the new E7 platform, Calix can now address operator demands for an all-IP/Ethernet fixed access solution capable of supporting the ever-escalating bandwidth/service requirements; for example, as North American cable operators leverage DOCSIS 3.0 channel bonding, switched digital video, node splits, and spectrum enhancements, rival operators (telcos or others) can counter with full-fiber systems and networks which are the effective end-game technology for wireline access.

CLIENTS ONLY

Current Perspective

Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Broadband Infrastructure | More information

Recommended Competitor Actions

• Alcatel-Lucent, as it strives to win incremental traction in the North American telco market, needs to leverage not only its longtime market leadership of the fixed access sector, but also its complementary service-enablement solutions, such as its comprehensive carrier Ethernet/service provider edge gear provided by the IP division, as well as its IPTV/digital media infrastructure offerings, including its new Triple Play Express (TPE) solution (announced November 10 at the TelcoTV conference) and its strategic partnership with Microsoft TV.

• Motorola, despite its lack of presence in the legacy telco fixed access sector, needs to highlight its strong and growing foothold within the North American (and global) FTTP market. Motorola is not only a key PON system supplier for Verizon’s FiOS network, but it has also garnered another sizeable customer win with Cincinnati Bell and it recently surpassed the 1 million ONT shipment benchmark. Motorola is also a key supplier for the North American cable infrastructure market, as well as another key Microsoft Mediaroom system integrator.

• Zhone Technologies can highlight its own new all-IP/Ethernet fixed access flagship, the MXK platform, which debuted in June 2009 (see our report for further analysis) and recently garnered another key win (announced today) with Etisalat in the United Arab Emirates (UAE). Also, in stark contrast to its closest U.S.-based rivals – Calix and Occam – Zhone is well ahead of both vendors in that it has a dramatically larger presence/foothold internationally.

• Occam Networks can point to its new BLC 6006 chassis (also just announced at TelcoTV 2009), which is designed to address the small-to-medium telco markets. The 6006 can support up to six BLC blades in a 7RU form factor and, when paired with the high-density BLC 6216 VDSL2 or BLC 6316 GigE FTTP blades, it can support up to 288 subscribers.

• ADTRAN can point out that Calix is not the only GPON supplier for Horizon Telecom (which Calix referenced in its E7 press release), as ADTRAN is effectively a co-supplier to Horizon and enables the very same IPTV/advanced services bundles that Calix touts.

Recommended End User / Customer Actions

• Current Calix customers that are looking to take the next leap forward in fiber-based TV/video service delivery need to evaluate the E7 series in commercial service. This will also enable these operators to test the compatibility of Calix’s C- (and other E-) series with the E7.

• Operators that are not current Calix customers, but are interested in the E7 solution, need to compare/contrast the E7 with platforms from companies such as ADTRAN, Alcatel-Lucent, Allied Telesis, Ericsson, Occam, PacketFront (which offers a very similar form factor/scalability proposition), and Zhone.

CLIENTS ONLY

Current Perspective

Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Broadband Infrastructure | More information

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