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XKL Brings New Life To Dark Fiber: Page 4 of 6

Cisco co-founder Bosack is back, ready to simplify WDM fiber networks -- Photo by Andy Reynolds

Cisco co-founder Bosack is back, ready to simplify WDM fiber networks

Photo by Andy Reynolds

The XKL system, in theory, should pay for itself. In contrast to a managed DS3 connection from a carrier with recurring monthly charges, it provides bandwidth at a per-megabit cost that declines as usage increases.

The DXM has limitations in terms of geographical range and functionality. The XKL gear lacks "carrier-class attributes," such as fine-tuned monitoring capabilities that carriers demand, notes Ron Kline, research director for optical networks at Ovum, a telecom research firm.

In terms of range, Michaels says the DXM will cover around 100 kilometers without amplification, and with amplifiers spliced in along the fiber route, up to 450 kilometers. That makes it good for metropolitan area and campus deployments, but less so for networking across long distances.

The optical network market last year was $13.8 billion, according to research firm Infonetics. While the bulk of that money came from telecom service providers, 14%, or $1.9 billion, was spent by government agencies, universities and research institutions, financial services firms, electrical utilities, and other businesses. "Most of what enterprises buy is metro WDM gear, exactly what Len Bosack is building," says Infonetics analyst Michael Howard.RIVALS AND REALITIES

XKL's main competitors include specialists such as Adva Optical Networking, which has sold WDM systems to 10,000 customers. Adva, based in Germany, lost $19.1 million in its most recent quarter.

Cisco and Nortel sell optical switches for enterprise networking, but they're generally more expensive and don't come with the same ease-of-use promises. "We suspect the reason no one has built a system similar to the DXM is because they don't perceive a market or the market is too small," says Michaels.