Giga Om and Andrew@Nyquist have good articles on Infinera today. I like Andrew’s comments wrt/ component development.
I’d add that the best vehicle for a “new component paradigm” is a “system” company, not a component company. The “system” company has the means, via the system, to demonstrate the capabilities of the component in the “real” world. The “system” companies future depends on proving this point. It is not easy as Infinera’s 6+ year effort demonstrates ( ie they have yet to be profitable. )
Once a component is proven in the “real” world by a “system” company then the component guys can “kaizen” it and segment it up for mass consumption.
Component guys (like me) often mention that developing components is expensive. But we often play down the point that a box companies revenue opportunity is 5-10x that of the component vendor. Also, the system companies component can be “leaner” because they only need to focus on their feature set, and not the needs of the many. The good news for component guys is that, the surviving box startups of 5+ years have all spent $300M+ which has translated into 1 significant chip development and loads, loads, and loads of software. I love loads of software 🙂