Thoughts on Infinera’s success: I always like how innovation is not always in the product. It can be pricing too. Kind of ironic for such a cosmic product innovation like the Infinera PIC to require an innovative pricing structure.
“Then, Infinera rolls out its new systems with a pricing model where their base systems are priced almost at cost, with the modules the plug into it and the software licensing being where the actual money is made over time.”
I believe that this give-away-the-base-box and make-it-up-in-the linecards is not a new strategy. It’s been around for a long time. Box vendors have been trying to hide the fabric forever. From a semi-vendors perspective this need to hide the fabric is exactly why “switch fabrics” are such a horrible semi-product. The box vendor rarely makes any money on it 😦