The commercialization of the largest optical network used by the U.S. research community is at hand. Back in June, Darkstrand Inc. announced that it had purchased half the capacity of the National LambdaRail (NLR) to offer high-speed connectivity to commercial firms. Darkstrand, a three year-old network services startup, has raised $12 million to get the project off the ground. This week the company finalized its plans, announcing the optical network would be available for commercial use at the beginning of 2009.
Launched in September 2003, NLR is a non-profit organization that manages the most extensive multi-gigabit network used by the nation’s higher education academic and research communities. Its purpose is to enable “big science” and explore cutting-edge network technologies. The 15,000 mile transcontinental network of dark fiber purchased from Level 3 Communications encompasses 30 U.S. cities, and with the associated regional optical networks, reaches almost the entire continental U.S. Its members include national labs, universities, and regional optical networks, along with Cisco Systems as the principal corporate partner.
The network is based upon dense wave division multiplexing (DWDM) technology, using Cisco’s 15808 and 15454 optical electronic system. These systems have a capacity of 40 and 32 wavelengths per fiber pair respectively, with each wavelength supporting transmission speeds of 10 gigabits per second (Gbps). NLR is currently replacing the 15808 systems to expand the capacity to 160 and 128 wavelengths. As a result of this upgrade, NLR is scheduled to introduce 40 Gbps circuits in January 2009.
Despite its multi-gigabit per second speeds, NLR’s path to commercialization has been slow. The failed merger with Internet2, which fell apart last year, was a distraction. But the bigger issue is that NLR, being research-focused, was not equipped to build the bridge to industry. Whereas corporations develop business cases, scientific organizations deal in research grants. “You’ve got to have that middle piece,” explains Darkstrand CEO Michael Stein. “We’ve actually seen arguments break out between Caterpillar and Argonne National Lab because they don’t speak the same language.”
That’s where Darkstrand comes in. Although the company’s name alludes to a dark fiber solution, in this case their role will be selling half of NLR’s existing lit fiber to commercial companies, especially those in media and entertainment, manufacturing, biotech and financial services. Darkstrand already has strong ties to corporate America, especially in the media and manufacturing segments. Stein himself was VP of a high-end engineering consulting firm that specialized in large-scale product data management solutions for companies like Caterpillar, BMW, Motorola and John Deere. More recently, he was the chief architect of business expansion for Digital Kitchen, a cutting-edge, motion graphics production company.
Unlike the residential and triple-play markets served by the telco companies, this commercial market is still up for grabs. Stein says only 4 to 8 percent of the telco industry’s capital expenditures are invested in the enterprise market, and it’s these companies that continue to look for a high performance networking solution. “All of them have employed some sort of dark fiber strategy — either at the local level or looking to a national footprint,” Stein says. “Even though these are the people who build tractors, make movies, and sell insurance, they are building their own networks because they’re not seeing the services they need from the telco space.”
But Darkstrand will be more than just a network broker. The business plan to bring industry into the multi-gigabit realm also involves giving commercial firms access to high-end expertise at NLR-affiliated national labs and universities. To accomplish this, Darkstrand will perform management services for firms looking to tap into HPC tools and technologies with test pilot and proof-of-concept projects. Customers will also have access to ongoing research and development at these high-tech centers. Although NLR will remain a non-profit entity, the commercial deals will involve revenue sharing between member organizations and NLR.
The rationale is that moving to a high performance network involves more than just plugging in. At tens of gigabits per second, workflows may change and even the underlying applications may need to be modified — or in some cases developed from scratch. For example, auto manufacturers wanting to do cross-country vehicle design can look to the processes and tools used by NASA when they designed the Space Shuttle.
The mixed business model of networking and project management services may seem unconventional, but it won the day against several more established bidders, says Stein. According to him, Darkstrand was the only startup in the mix. And although they weren’t offering the most favorable financial deal to NLR, they still ended up with the contract.
Although the current network spans 30 major U.S. cities, Darkstrand is filling out “last mile” issues by arranging deals with regional optical networks, which in some cases are already NLR members. For example, in Florida, the NLR drop is in Jacksonville, but the regional Florida LambdaRail extends access to most of the remainder of the state. Similar regional networks can be tapped in New York, the Midwest, California and elsewhere. The idea is to minimize the telco infrastructure in the network whenever possible, although sometimes there are usage issues to work out if the local networks are controlled by state funding.
Stein has been busy lining up NLR customers and should be announcing the first handful early next year. If everything goes according to plan, the first commercial users should be online at the end of January, coinciding with the network’s upgrade to 40 Gbps circuits. Although most customers won’t be taking advantage of that bandwidth immediately, the upgrade provides a convenient starting point for the commercial launch.
The second stage of the business plan is to provide an international footprint via the Global Lambda Integrated Facility (GLIF). GLIF’s research POPs come into the U.S. at LambdaRail peering points: From the Seattle POP you can get to Asia, while Europe is connected via New York and Chicago. Stein say they’re planning to roll out international connectivity sometime next year.
Darkstrand’s challenge is to convince customers that NLR will provide a stable, long-term platform for their networking needs, and will help them remain competitive in their respective markets. To date, Stein is seeing a lot of initial enthusiasm and says he’s surprised out how quickly his pipeline has filled up. “Our pitch is that nobody’s going to build the LambdaRail again,” he says. “It’s digital beachfront property. Buy this infrastructure while you can.”