Spring 2009 Newsletter | El Dorado Ventures website


Optical Computing and All-Optical Networks are Dead

By Charles Beeler, EDV General Partner &
Craig Partridge, Chief Scientist, BBN Technologies

We have some bad news: optical computers and all-optical networks aren't going to happen anytime soon. All those well-intentioned stories about computers operating at the speed of light, computers that would free us from Internet delays and relieve us from the tyranny of slow and hot electronic devices were, alas, overly optimistic.

You see, there's a critical step to building an optical computer or router, called optical regeneration, which nobody knows how to do. And, after at least two decades of research and well over a billion dollars of venture capital spending on promising projects, no one has solved the problem.

It now appears that it is not simply a matter of putting top-class engineers to work on this problem. In all likelihood, it will take the kind of talent and brilliance that wins Nobel Prizes in physics. Such breakthroughs are rare and unpredictable and thus all signs suggest optical computing is an innovation that will likely have to wait some time to come to fruition.

Some Details

The past two decades have seen a profusion of optical logic that can serve as memories, comparators, or other similar bits of logic that we would need to build an optical computer. Much like traditional silicon logic, this optical logic suffers from signal loss – that is, in the process of doing the operation or computation, some number of dB is lost.

In optics, the loss is substantial – an optical signal can only traverse a few circuits before it must be amplified. We know how to optically amplify a signal – indeed, optical amplification is one of the great innovations of the past 20 years and has tremendously increased the distances over which we can send an optical signal.

Unfortunately, amplifying a signal adds noise. So after a few amplifications, we need to regenerate the signal: we need a device that receives a noisy signal and emits a crisp clean signal. Currently, the only way to build regenerators is to build an optical-electronic-optical (OEO) device: the inbound signal is translated from the optical domain into a digitized sample, the electronic component removes the noise from the digitized sample, and then uses the cleaned-up digitized sample to drive a laser which emits a clean signal in the optical domain. OEO regenerators work just fine, but they slow us down by forcing us to work at the speed of electronics.

There's been no shortage of attempts to create all-optical regenerators. Many approaches have shown some promise in the laboratory. But ultimately, to date, all have failed the transition from promise to product. All the likely and many unlikely approaches have been tried, and none has worked.

So, if we are going to assemble optical circuits into an optical computer, right now and for the foreseeable future, for every handful of circuits we will need a regenerator, and the only regenerators we have require slow electronics. Oops!

Compounding the frustration is that the photonic logic community has recently achieved breakthroughs in photonic integrated circuits (PICs). Until recently, each optical circuit was its own chip (much as we relied on individual transistors in electronic devices in the 1960s). But now we can lay out densely packed optical chips. So we can envision replacing electronic chips with optical chips – but the optical chips won't run any faster because every few circuits, inside the chips, we'll have to do electrical regeneration.

There are similar problems in building all optical networks. There have to be some optical switches in that network to direct the data. And the optical logic in those optical switches has the same problems as optical computers: every few circuits you need OEO regeneration.

Many people had been anticipating a future of all-optical computers connected via all-optical networks: a nirvana of high performance combined with low error rates and lower power consumption and heat dissipation. We're sorry to be bearers of bad news, but you can stop holding your breath waiting for this to happen.

So What's Next?

All the same, one should not lose heart. There are plenty of opportunities to exploit the characteristics of optics in a hybrid electronic-optical world. First, photonic integrated circuits (PICs) have unleashed a tremendous surge in innovation. In 2005, the optical research community wrote a report for the National Science Foundation on research problems they expected to work on and solve over the next five and 10 years. Four years later, some of those research problems are already solved and in products! As a result, the amount of data we can push through an individual fiber is increasing sharply. We're also able to manage that capacity with increasing sophistication. These results are probably only the low-hanging fruit of what PICs have enabled and we're likely to see more innovation in coming years. If your biggest concern is getting lots of bandwidth with low error rates, the future looks very good indeed.

Second, optical logic continues to develop new capabilities. For instance, a few years ago at Harvard, researchers were able to slow and then stop (hold stationary) a pulse of light. The immediately visible opportunities are for better optical memories and to manage data rates inside a device. More opportunities will no doubt appear.

A much more concrete effort is the DARPA-funded Optical Arbitrary Waveform Generation (OAWG) program. OAWG seeks to build radically improved optical transceivers, capable of producing optical pulses that are more coherent and have less noise. These transceivers would allow us to pack more optical channels into a fiber, because we would need smaller gaps between channel frequencies to protect ourselves from cross-channel noise.

The future of optical technology is indeed bright. But we aren't taking the path to the future that many of us imagined or hoped for.

A version of this article appeared recently at queue.acm.org.



> EDV News

EDV Hosts "Survivor"-Themed CEO Summit


Surviving the current economic turmoil is no sure thing. To give our portfolio companies the best chance of making it, El Dorado Ventures recently held a "Survivor"-themed CEO Summit for its top portfolio company executives. The tagline of "Survivor: Half Moon Bay" was "OutSell, OutExecute, OutLast," and the presentations and activities were all geared to these topics.

Before getting down to serious business, however, attendees squared off in the annual EDV Golf Tournament, during which Mark Tanoury from Cooley Godward registered his first ever hole-in-one. Golf was followed by a tasting of a variety of premium wines. After dinner, Silicon Valley Bank's Jim Anderson officially opened the Summit with an overview of the current economic situation. Fresh off the latest batch of economic news, the CEO's, El Dorado staff and invited guests sat down to start the third annual EDV Poker Tournament. Jim Fowler from Jigsaw was able to "OutExecute" and "OutLast" the rest of the group to take the win.

It wasn't all fun and games, however. Stanford GSB professor Jeffrey Pfeffer opened the following morning with "10 Common CEO Mistakes to Avoid." The CEOs then split up into teams to develop strategies to outsell, outexecute and outlast, which they presented to attendees, who then voted on the recommendations and selected the most actionable ones. We were later joined by outside experts for two panels, "Survival of the Fittest: CIO Panel About IT Spending," and "Survive and Thrive: 2009 Financing Strategies."

In addition, EDV presented its annual Bourne Technology Award at the CEO Summit to FusionOne for its Mobile Content Portability technology. The Bourne Technology Award is presented annually by El Dorado Ventures to recognize companies that have deployed unique technology with demonstrated customer impact. The award is named for EDV CTO Steve Bourne, who is internationally known for his work on the UNIX operating system.

EDV's annual CEO Summit is one of many value-add programs the firm offers portfolio companies. In addition to the Summit, EDV hosts regular workshops on timely and critical business issues, as well as CEO networking dinners and other networking opportunities throughout the year. It is all part of living up to our motto of being "Partners with Entrepreneurs."



> About El Dorado Ventures

El Dorado Ventures (EDV) is a leading entrepreneur-focused, early-stage venture capital firm with over two decades of success. Entrepreneurs see EDV as a trusted investment partner who shares their vision and helps them succeed by providing ongoing strategic guidance and access to a wealth of industry contacts. With $750 million in capital under management, the firm invests in disruptive technologies and business models in emerging and high-growth markets, across a broad range of sectors including software, technology-enabled services, communications and emerging technology. El Dorado's early-stage investments have included Compellent Technologies, Cyras Systems, EarthLink, Efficient Networks, Novellus and NuSpeed Internet Systems. Numerous EDV portfolio companies have gone public or been acquired by major technology companies including AT&T, Ciena, Cisco Systems, nVidia, Siemens, Texas Instruments and Yahoo.

Additional Newsletters

Fall 2010
Why I'm Switching My iPhone to Verizon

Spring 2010
Brands Get a Powerful New Listening Post on the Web

Fall 2009
Automobiles -An Industry Ripe for VC-Backed Disruption?

Spring 2009
Optical Computing and All-Optical Networks are Dead





What We're Looking For

El Dorado Ventures seeks to invest in a select number of companies pursuing opportunities in the following broad categories:

  • Cloud Computing
    (datacenter infrastructure, software)
  • Software
    (SaaS, Enterprise 2.0)
  • Cleantech
    (energy storage, energy efficiency, solid state lighting, water treatment, smart grid)
  • Data Services
    (healthcare, financial, consumer/business productivity, green consumer)
  • Communications
    (IP video infrastructure, machine-to-machine)
  • Digital Media
    (social networking, online marketing/ advertising)
Portfolio Company News


Jigsaw Enters Into Alliance With D&B, Wins 2009 CODiE Award
Dun & Bradsteet (D&B) and Jigsaw have entered into an alliance with Jigsaw, to provide D&B customers with access to Jigsaw's deep business-to-business contact information. San Mateo-based Jigsaw currently has over 12 million business contacts in its rapidly growing database. The breadth, depth and accuracy of Jigsaw's contact database is driven by its unique Web 2.0 environment that leverages user-generated content contributed by its global community of 800,000 members. In addition, Jigsaw won a 2009 CODiE Award from the Software & Information Industry Association (SIIA). Jigsaw was recognized as Best Online Directory & Business Leads Service. EDV provided seed funding to Jigsaw. Tom Peterson serves on the Jigsaw board. www.jigsaw.com

RipCode Raises $12.5 Million in New Financing
Austin-based RipCode, an innovator of Internet and mobile video infrastructure solutions, secured more than $12.5 million in follow-on financing to fuel worldwide market traction for the company's breakthrough video delivery technology. Granite Ventures led the round alongside existing investors El Dorado Ventures, Hunt Ventures, Vesbridge Partners, and ATA Ventures. EDV co-led RipCode's first round of venture capital financing. EDV General Partners Jeff Hinck and Scott Irwin serve on Ripcode's board. www.ripcode.com

Convio Posts Record Annual Revenues and Achieves Profitability
Austin-based Convio, the leading provider of on-demand constituent relationship management software and services to nonprofit organizations, announced record annual revenue of $57 million for the year ended December 31, 2008, representing a 32 percent increase over 2007. Generating $2.9 million in operating cash flow for the year, and $1.2 million for the fourth quarter, Convio has now produced positive cash flow from operations in five of the last six quarters. In addition, Convio achieved profitability on a non-GAAP basis for both the fourth quarter and for fiscal year 2008. EDV co-led the first round of venture capital funding for GetActive Software, which was acquired by Convio in 2007. EDV General Partner Scott Irwin serves on the Convio board. www.convio.com

Storspeed Completes Tech Leadership Team
Austin-based Storspeed, which is accelerating the performance of network-based storage and extending customers' storage infrastructure, recently completed building its technology-leadership team with the hiring of Spencer Shepler as CTO and Tom Bishop as VP of Engineering. Shepler's broad storage experience includes key positions at IBM and Sun Microsystems, and he is currently co-chair of the NFS working group of the Internet Engineering Task Force (IETF) and was instrumental in the development and release of NFSv4.0 and NFSv4.1. Bishop most recently served as CTO at BMC Software, and also served as CTO of VIEO and as CTO at Tivoli and later IBM-Tivoli. EDV co-led Storspeed's first round of venture capital financing. EDV General Partners Charles Beeler and Jeff Hinck serve on Storspeed's board. www.storspeed.com

CrossLoop Releases Mac Version, Serves 100 Millionth Help Minute
Campbell-based CrossLoop released a Mac-specific beta version of CrossLoop's award-winning, free desktop sharing software, allowing Mac users to find immediate help and training for virtually any tech issue. CrossLoop, which enables consumers to receive tech support from CrossLoop's network of trusted, qualified service providers, also recently provided its 100 millionth help minute to consumers. EDV led CrossLoop's Series A round of financing. EDV General Partner Tom Peterson serves on the CrossLoop board. www.crossloop.com

George Shaheen Joins Voxify Board
George Shaheen, former CEO of Andersen Consulting (now Accenture) has joined the board of Alameda-based Voxify. Shaheen also served as CEO at Siebel Systems, where he helped guide the creation of the CRM market. Voxify develops, deploys and manages integrated speech solutions to automate customer interactions. EDV led Voxify's first round of venture capital financing. EDV General Partner Scott Irwin serves on Voxify's board. www.voxify.com


Bridgelux Launches Lighting Services Group
Sunnyvale-based Bridgelux, Inc., a leading supplier of energy-saving light-emitting diode (LED) based light sources, has launched a Lighting Services Group to offer customers a wide range of design and support services. An increasing number of lamp and luminaire manufacturers are transition to solid-state lighting, and the Bridgelux Lighting Services Group will support them in developing cost-effective designs with reduced time-to-market. EDV co-led Bridgelux' first round of VC financing. EDV General Partner Scott Irwin serves on the Bridgelux board. www.bridgelux.com