With $82m silicon-photonics acquisition, Mellanox satisfies its need for speed

Networking kit company Mellanox is to acquire Silicon Valley-based silicon-photonics company Kotura.

The deal, announced on Thursday, will see Mellanox pay $82m in cash for Kotura.

Kotura's relatively new technology uses optical rays to transfer signals, which work at much greater speeds than electrical conductors. The tech is suited to integration of WDM (wavelength division multiplexing) demultiplexers, lasers, modulators, and drivers, and can be designed to operate with low power needs. Kotura already uses this technology to produce WDM multiplexers and demultiplexers, attenuators, and custom-designed products.

Speed is something Mellanox is very interested in. Mellanox is an evangelist for InfiniBand (IB), the high-speed communications architecture, which it developed the standards for, and on which development has been ongoing since the early days of the 12-year-old company.

Just about every big data company is using Mellanox products, including switches, adapters, and gateways — particularly in HPC (high performance computing) scenarios. Microsoft, for example, uses Mellanox equipment and software to power Bing Maps, while Oracle uses the company's equipment almost exclusively in its datacenters, according to Mellanox. The company also makes branded equipment for a host of companies, including IBM, HP, and Dell.

Faster data connections is something all those companies are very keen on – hence the Kotura acquisition. Kotura was established in 2004, and its list of customers and partners includes companies such as Oracle, Alcatel-Lucent, Ciena, Nokia-Siemens, NeoPhotonics, and Finisar, as well as several universities and departments of the US government — including DARPA, Department of Commerce, and National Science Foundation (NSF).

But what really got Mellanox's attention was Kotura's recent announcement that it had developed out a silicon-photonic engine that can pass data at 100Gbps to start with, rising to up to 1Tbps, depending on how it is deployed. "That speed is what we were looking for when we signed the deal for Kotura," Gilad Shainer, Mellanox's vice-president for development, told ZDNet. "We are now going to be able to offer our customers that experience."

In a statement, Israel-based Mellanox said it expected silicon photonics to play a significant role in the enablement of high-speed networks. "Kotura's technology will enable Mellanox's interconnect products to reach 100Gbps and beyond bandwidth, and have longer reach optical connectivity at a lower cost," it said.

Mellanox will keep Kotura's staff and product lines, and retain its current facilities, turning it into the company's first R&D center – a twist on the usual situation, where it is the parent company in the US that opens an R&D center in Israel.

According to Shainer, Kotura has its 100Gbps technology installed on several product prototypes, which will be further developed by Mellanox. "We expect to have the first silicon-photonic products on the market within a year or a year and a half," he said.

Shainer said that Mellanox would continue to manufacture and develop its current product lines, and would not need to make adjustments to its plants to accommodate the manufacture of silicon-photonic products — those products would continue to be made in the plants currently equipped to do so, including a large Japanese foundry that Kotura currently worked with. "Only a few places in the world are equipped to do this kind of work, so we intend to take advantage of that," he said.

"Operating networks at 100Gbps rates and higher requires careful integration between all parts of the network," Eyal Waldman, president, CEO and chairman of Mellanox, said. "We believe that silicon photonics is an important component in the development of 100Gb InfiniBand and Ethernet solutions, and that owning and controlling the technology will allow us to develop the best, most reliable solution for our customers."

One day, transfer rates of 100Gbps, and even 1Tbps, will be common, but right now the technology is still being developed. The big companies that deal with big data — including IBM, Intel, and Cisco — all either have in-house labs working on silicon-photonic technology, or have acquired startups working in the space. Either way, the Kotura acquisition puts Mellanox in a very select group. "This is a very limited club, and we are now a part of it," Shainer said.