Xelerated - 100 Gbit/s wire-speed NPUs for any traffic type
June 7, 2010		Email this page

Q&A with Anders Ericsson, VP and Head of Sales & Marketing and Johan Sandell, VP, Product Management

Introduction

Xelerated, founded in 2000 and based in Stockholm, Sweden, is a privately-held developer of programmable single-chip network processors, with a focus on high-speed interfaces up to 100 Gbit/s for applications in systems for metro, core and access networks. The company also has offices in Santa Clara (California), Tel Aviv (Israel) and Beijing (China).

Xelerated supplies its products to systems vendors delivering high capacity networking solutions and has announced customers including ADVA Optical Networking, Alloptic (acquired by CTDI), Atrica (acquired by Nokia Siemens Networks), Fujitsu, Huawei and ZTE.

Q: Could you start by describing Xelerated's product offering?

Xelerated is a developer of network processors (NPUs) and programmable Ethernet switches for use by systems vendors.

The company's chips support data rates from 10 to 100 Gbit/s and deliver integrated packet processing, switching, Ethernet MAC and traffic management functionality.

All of Xelerated's chips are based on its Dataflow Architecture, which delivers wire-speed performance up to 100 Gbit/s under any conditions, for any packet size and for any service/traffic type.

The company is presently focused on building a position in the 100 Gbit/s wire-speed space, and as part of this objective will begin sampling a new device for access network applications in June 2010.

Xelerated is currently awaiting samples of the new 100 Gbit/s-capable chip from its supplier and expects to receive these by mid-June, following which it plans to conduct 100 Gbit/s testing with a partner.

Q: What are the company's unique selling points/differentiators?

Aside from the fact that it is the only company able to provide 100 Gbit/s wire-speed performance, the key feature of Xelerated's technology is that its packet processors are based on a deterministic architecture. Basically this means that what comes out of the device is determined by what is fed in.

Beyond these capabilities, the company's products are programmable, which translates into a high level of flexibility for customers developing networking systems.

Q: Which companies does Xelerated compete with?

As far as delivering 100 Gbit/s wire-speed performance, Xelerated does not have any direct competitors. It is the only company to offer this capability at present.

More specifically, the company's expertise centres on enabling 100 Gbit/s performance at Layers 1-4, where it is currently the market leader. Other companies deliver superior solutions for different network layers but such functionality is simply outside Xelerated's technology and market focus.

Q: How has Xelerated managed to get ahead of other companies in this area?

The key to the company's solution is the patented dataflow architecture - a packet processor comprising a pipeline of hundreds of cores through which each packet passes in sequence. Each packet is processed by a core with each clock cycle, then passing to the next core.

This is the fundamental technology on which Xelerated was founded and the basis for all of its solutions. The company is now offering the third generation of products based on this architecture.

Q: How customisable are Xelerated's products?

Firstly, Xelerated offers a range of devices optimised for different applications, such as access, metro and core networks, so customers can choose the product that best fits their needs.

In addition, as noted above, the company's devices are programmable, so the processor can be tailored in accordance with a customer's specific requirements. This feature is a key advantage in the market, particularly compared to ASICs - the main alternative to Xelerated's devices.

It should be noted that alternative devices are typically optimised for one specific task, while Xelerated's NPUs are designed to be able to deliver all processing, with any operation performed at any stage during processing of a packet. This allows a high degree of flexibility.

Overall the company's products are highly flexible within the market segment each is designed for.

Q: Do customers request features over and above what Xelerated offers?

Yes, and this is seen as positive as it is one way the company can gauge whether it is offering the right products for the market, as well as providing guidance for the development of new features.

Xelerated does adapt its devices in accordance with specific requirements from a customer or customers as such developments are generally broadly applicable in the market. On the other hand, implementing a highly customer-specific feature with limited applications can be difficult as such work can only be justified if there is sufficient volume demand for it.

Q: What are the main applications for the company's products?

The core market to date is the metro network, where the company's products are used in Carrier Ethernet systems such as MSPPs, aggregation switches and edge routers. Xelerated also offers products for the core network, for example core routers and packet transport systems.

In addition, Xelerated is now moving into the access network, specifically targeting the unified fibre access space. In this market its devices are used in systems such as GPON OLTs and mobile backhaul equipment. As vendors migrate to LTE mobile technology the company's products are also suitable for use in integrated base stations requiring 10 and 20 Gbit/s performance.

Xelerated's devices go into the line cards in metro network routers and switches, OLTs and aggregation points for FTTH networks and mobile backhaul infrastructure where there is a need for high capacity packet processing. As networks evolve and capacity demands increase there will be additional markets for the company's solution, illustrated by potential applications in LTE base stations.

Q: Xelerated formed an alliance with Dune Networks in October 2008, has this relationship survived the acquisition of that company by Broadcom?

The agreement with Dune is still in effect and Xelerated is planning to conduct interoperability testing for its new generation processors with the company.

Previously the two companies have conducted interoperability testing and developed a reference design utilising Dune's packet manager technology. The intention is to complete such work for Xelerated's new product.

Regarding the value of the relationship with Dune, a number of system vendors have purchased Xelerated's NPUs together with Dune's traffic manager because they do not have their own traffic manager product.

Q: Xelerated also announced an agreement with Taiwan-based ODM Accton in April 2010, what is the aim of this?

This agreement relates to the access market and Xelerated's new processor. As bandwidths increase, with the development of 10 Gbit/s PON solutions for example, and network intelligence moves out into the access network, there is a new opportunity the company can address. The main aim of the relationship with Accton is to cut time to market for end customers.

Xelerated has worked with Accton previously and the two companies supply some of the same customers. The new agreement is based in part on the fact that there are a lot of common requirements between products for point-to-point Ethernet, PON and mobile backhaul, therefore the companies are developing a platform to address these markets.

The first product for the access market developed under this agreement is a point-to-point Gigabit Ethernet aggregation switch offering a 44 Gigabit Ethernet downlink and four 10 Gigabit Ethernet uplinks. As noted above, this solution is designed to reduce time to market for systems developers, although if a company prefers it can buy Xelerated's product and develop its own box.

It is important to state that this move is not an attempt to enter the systems space - Xelerated does not offer the switch, it is only available through Accton. Xelerated is strictly a supplier of processors and associated software and has no interest in expanding into other areas.

Q: What do you believe is the total value of the market Xelerated addresses?

The value of the company's total addressable market is approximately $750 million annually, although around 60% of this is accounted for by internal ASICs. However, the market is usually further broken down into segments based on data rate, typically 5 Gbit/s and below, 5 to 10 Gbit/s and 10 Gbit/s and above.

The 10 Gbit/s+ segment is actually the largest segment (38%) and shows the fastest growth. The low speed segment (36%) is also growing, but not as fast, and the mid segment is contracting. Xelerated addresses only the high-end segment.

As system capacities increase - for example, mobile backhaul systems are now moving to 10 Gbit/s and beyond - the company's addressable market will grow. In addition, Xelerated's new chip will allow it to address new applications in the access network as fibre is deployed deeper into networks.

Q: What are the company's biggest markets by geography?

China and the U.S. are the main markets for Xelerated. China is currently its largest single market and is expected to grow strongly, although the U.S. market is now picking up, as also is Europe. Both the U.S. and China are seen as key markets for the company and it has its own staff in both countries.

Xelerated did not consciously focus on China, the country has become its largest market primarily due to wider circumstances over the past two years, mainly that it has suffered less than most countries in the economic downturn.

Q: How does Xelerated cope with the pricing pressure in China, given that many component suppliers struggle to make money there?

Apart from anything else Xelerated has hopefully learned by other companies mistakes. Certainly the company has managed to avoid this problem so far, based partly on the fact it has few direct competitors and thus has succeeded in maintaining its prices. Even so China is a very tough market.

Q: As a small company targeting Tier 1 and 2 system vendors, does Xelerated face the challenge of convincing customers it is stable and reliable?

Yes, This is a constant issue due to the size of the company. A further difficulty is the need for a second source supplier, given that Xelerated is the only company able to provide what it offers.

To address the latter point, Xelerated offers security of supply guarantees via companies such as semiconductor manufacturing services company eSilicon.

Overall it would be true to say the company could probably expand its market if it had more resources and could demonstrate greater financial stability.

Q: Is industry consolidation a concern for the company?

The company has been operating successfully for 10 years now and overall the process of consolidation is regarded as healthy for the industry and for Xelerated.

As regards potential threats to its business, increased adoption of internal ASICs could certainly make life difficult. However, market reports suggest the market share for internal ASIC devices is declining.

Q: Given that the many telecom equipment component suppliers are not profitable and some have been struggling for the past decade, what has made Xelerated successful?

I believe that a key factor is focus - basically the company has not tried to extend beyond its original core business or target markets. Very simply, Xelerated has concentrated its efforts on being the best in the business with respect to delivering deterministic NPUs capable of providing 100 Gbit/s speed.

Q: How do you see Xelerated developing its business in the future?

I am happy to continue fighting for business and seeking to convince potential customers that Xelerated is a reliable and trustworthy company. The company has established a reputation as a supplier of packaged solutions that work and are reliable, as well as for delivering very high quality support to customers.

In 2009 Xelerated generated around $14 million in revenue, it is now profitable on a net basis and expects to reach cashflow positive in the second quarter of 2011. Ultimately Xelerated is continuing to win new business and keeps its customers.

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