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Inventing Faster and Faster

What innovation means for the chief technology officer at Alabama’s largest IT company, Adtran — a creator of ever more gigabits.

Adtran Chief Technology Officer Kevin Schneider factors economics into the algorithm of innovation.

Adtran Chief Technology Officer Kevin Schneider factors economics into the algorithm of innovation.

Kevin Schneider is the chief technology officer at Huntsville-based Adtran Inc., a publicly traded information technology company (NASDAQ: ADTN), with sales of $630 million in 2014. What they mainly do these days is make the equipment that Internet service providers use to connect your home or office to the Internet.

Back in 1992, when Schneider first took a job at Adtran, there was an Internet: He’d been connected to it at college. But not at Adtran. 

“There was no Internet service when I got here,” he says. “And the first service was a workstation on my desk, with 14.4 KB, with a modem connected to it. I had the whole Internet world for Adtran.”

What Adtran did when it started in 1985 was mainly provide switches and connection gear to independent telephone companies — free enterprise unleashed by the forced breakup of the monopolies of Bell Telephone and AT&T. 

A lot has changed since then. 

The largest part of our business is in broadband Internet access. We’re in the business of connecting people to the greater world through the Internet at ever increasing speeds and at ever decreasing cost. 

How we do that is my star group of technical experts interacts with the sales force and product management teams, who interact with the leading service providers around the world. Where we deliver over copper access, vectoring has been used to boost the speed of DSL access, and we’re at the head of that access. We’re also deeply involved in fiber to the home. Today the headline speed is 1 gigabit, 1 gig, and our research and development focuses on delivering multiple gigabits to each subscriber. 

Today the predominant way fiber to the home is delivered is by a technology called GPON. [“G” for gigabit and “PON” for passive optic network, fiber optic cable] That is delivering a shared access that is 2.5 gigabits toward the subscriber and 1.25 coming back to the network. 

The next generation technology will be increasing those speeds to 10 gigabits in each direction — a four times increase in the downstream direction and an eight times increase in the upstream direction. And the industry has been working on even faster speeds that would bring multiple channels of this 10 gigabits available. 

One of the things that Adtran introduced this last year is that we influenced the standards process. We said, “We really like this thing of multiple 10 gigabits, but it’s just too expensive. The service providers are not going to be able to deploy the service at a cost that subscribers can afford. So we’ve gotten the industry and the International Telecommunications Union to start a new project called XGS-PON, which is a single wavelength, a single channel of 10 gigabits. There was a hole in the standards that we identified that was needed to meet the market price sweet spot. 

We are very much pragmatists. As much as I am a technology guy, I understand that economics is really how people ultimately have to make decisions. You can have the greatest technology in the world, but if it doesn’t meet the price point, it’s a science project.

One of the issues you encounter if you go out into the world where they are trying to provide for rural subscribers, there is the issue of the cost of actually putting the electronics close enough to the subscriber. And to do that you have to build a cabinet. One of the things that we have done is lower the cost of deploying that cabinet. Sometimes it’s just by how we construct the cabinet. We have cabinets that don’t require a concrete pad to be poured. And we’ve developed technology that doesn’t even require a cabinet. And in some cases we made a cabinet that we could extend via the DSL line to another cabinet so they didn’t have to spend the money to put in the fiber optic cable for that segment.

In high-population, municipal areas one of the big cost areas is getting the fiber from the street into your house and connecting up your devices within the home. We are delivering products that have the latest in wireless technology for distributing the data through your home to cut down on the installation time.

In some of these urban environments, the push has been to go beyond one gigabit, and if you go look at the economics on that, it’s the equipment that goes at the home that really drives the cost of going to the higher speed PON. So, we’ve really put some concentration into what we can do to lower the cost of that equipment, and the XGS-PON is the first fruit of that labor. But we’re continuing to work that and we will probably have additional things that will come out in the next few years in terms of products.

Traditionally central offices were all built out around voice services, and then they added data on top of the voice. Today we have voice as an application that runs on top of the data pipe. Higher and higher data service in the service provider’s central office brings the content closer to the subscriber. You’ve got higher speeds because you shorten the number of hops you have to go through. That’s why we just saw an announcement about Google building a big data center near Scottsboro. They need to build more data centers out closer to the subscribers. 

On top of that, there’s a whole new model for managing the network equipment — virtualizing things that used to be distinct pieces of equipment. They pull the software out of those elements and run them on servers in the new data center. The data center is all about having a whole bunch of these virtualized computers in one place. That’s network functions virtualization — what you hear also called “cloud computing.”

This is unlocking the velocity of innovation. You can download software to each virtual computer and speed the time it takes to turn up a new service, increasing it dramatically. You don’t have all the labor of installing.    

This helps the service providers stay in business — to compete against the global cloud service providers, the “over-the-top providers,” your Googles and Facebooks. One advantage that service providers have is that they are a little bit closer to their customers. They need to have the same capabilities as the over-the-top provider and be able to leverage that along with their physical proximity. 

I don’t expect the battle to be won or lost anytime soon. For us, we want the battle to go on a very long time. What it means to us is that the Internet speed continues to grow. It’s about the speed going up, and that’s what keeps our engineers employed here. 

Chris McFadyen is the editorial director of Business Alabama.    

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