Test sets the tone for telecom quality (continued)
A continuation of our interview with Étienne Gagnon VP, Product Management and Marketing, of EXFO, which appeared in the August 2008 Viewpoint column.
Larry Maloney -- Test & Measurement World, 8/1/2008
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Q: What has fueled EXFO’s strong growth over the last two years?
A: A major factor was our very profitable business in providing test solutions for telecom access applications, such as fiber to the home and fiber to the node. We also have seen very good returns from our investments in technologies outside the optical field, such as datacom testing and transport/SONET testing. For a company of our size—just over $150 million in sales—we are making large investments in R&D, about $35 million annually. This ensures that we will have the new test solutions that our customers need in this fast-changing market. We’re launching about 20 products a year, and test products introduced in the last two years now account for a third of our sales.
Q: How is EXFO "future proofing" its test solutions to keep equipment costs manageable for customers?
A: That’s a key concern for customers, and for more than a decade we have addressed it with a platform approach, which includes PC-based and modular concepts. Customers buy a major platform, such as our FTB-400 for network test, and add new modules as their needs change. We are very open in sharing our R&D technology roadmaps with customers and in soliciting their input, especially in such areas as transport and datacom services where we add upgraded software modules to our hardware platforms. This process has been very well received by customers.
Q: Geographically, where is EXFO seeing its fastest growth?
A: Over the last two years, Europe and the Middle East have set the pace for growth. A big reason for that is that we have invested heavily in service centers to be closer to our customers. During the past year, we also have shifted more of our focus to Asia, which is now accounting for about 18% of our sales.
Q: Will EXFO continue to look for more acquisitions?
A: Yes. The company has a very strong financial position, with more than $100 million in cash. So, we will continue to look for new opportunities in the telecom field.
Q: How are you addressing test needs in very high-speed networking applications?
A: We’ve launched the FTB-8140 module for network transmission at 40 Gbps, a service that is now beginning to be deployed in the field. And we are already working with network equipment manufacturers on design requirements for test modules for 100-Gig transmission.
Q: Since technicians can’t be on the scene all the time, what is EXFO doing in the area of remote monitoring of networks?
A: This is an interesting niche application. Because of the bandwidth that the core network is now supporting, there is more and more need to monitor fiber networks for breaks and minimize repair time. So, this year we launched a new product called Fiber Guardian, a remotely controlled unit placed along an optical network for continuous monitoring and troubleshooting. This cost-effective product, part of our NQMS fiber-monitoring system, features easy-to-use software and plug-and-play operability within seconds of connecting a fiber route to the test unit. Now, there’s a lot of discussion about using this type of device in fiber-to-the-home deployment.
Q: What are the chief threats to continued telecom growth?
A: There’s no question that the quality of the customer experience is crucial to the success of the carriers that are delivering these new services, such as triple play. And that challenge ranges from the reliability of the physical layer to the quality of the particular service being delivered, such as VoIP or Internet TV. At the end of the day, the customer holds the key, and growth will slow in telecom if there are deficiencies in the quality or the extent of services, such as caps on bandwidth.
The industry also needs to do a much better job in adopting widely recognized technical standards. Telecom companies traditionally see new technology as their competitive edge and therefore are reluctant to push common standards. A good example is IPTV, where no widespread standard exists, and every deployment tends to be very complex. So clearly, carriers and equipment vendors will need to come together and agree on standards.
Read the first part of this interview.
