DS2 Successfully Competes Against Wireless Networking via Unrivaled R&D

The overshadowing tone of wireless technologies at the Computex Taipei 2008 held early this month did not completely upstage wire-technology guys like Victor Dominguez Richards, a co-founder and strategy and standardization director of the Spain-headquartered chip-design startup Design of Systems on Silicon (DS2) SA.

Jointly founded in 1998 by former executives from IBM, AT&T/Bell-Labs, Philips Semiconductors, France Telecom, Ericsson and Cisco, DS2 is a leading supplier of silicon and software for powerline communications (PLC), whereby such hardware and software could only deliver few kilo bits per second for telemetry during the early days in the 1930s. In 2004, the company introduced the industry's first PLC chipset delivering audiovisual data via the Internet at up to 200 Megabits per second (Mbps) over electrical lines for home networking applications. Richards said the 200Mbps PLC chipset provides the perfect "triple play" solution: providing simultaneous high-definition television, Internet access, and voice communication via the Internet Protocol while maintaining superb quality.

"For home networking, wireless is PLC's major competitor. While still lagging PLC capability, IEEE802.11g/e/n technology is improving daily," Richards touted. "On the one hand we have to recognize our competitive position against the wireless guys; on the other, ours is not pure rivalry but synergistic-we provide a good backbone for wireless," he added

Wired Vs. Wireless

Richards noted that PLC has many advantages over wireless. "Wireless does not give full home coverage. But we do. See how wireless works? It connects rooms through powerline communications. Besides, wired transmissions always have solid benefits over wireless: greater reach, more megabits per second and cost advantage," he said.

He pointed out that many telecom operators now offer "triple-play" service, but are unable to connect ADSL gateways to set-top boxes. With the gateway and set-top box usually far apart, they have to install a long Ethernet and telephone cable inside customers' homes. "Many customers refuse such service and operators tell us 30 to 40% of customers say no because they don't want more cable clutter. So operators began evaluating options such as wireless, which is inadequate for top quality video streaming. Then they discovered our technology works: Ours reliably connects ADSL to a set-top box for top quality TV viewing regardless of the location of the gateway or set-top box," he said.

Richards thinks wireless and wireline technologies can coexist in home networking markets. He noted a number of DS2 customers are developing machines that offer wireless and powerline interfaces. "That is a perfect application because you can extend the coverage of wireless using powerline. With powerline and wireless inside the same box achieving synergy, users can count on powerline when wireless does not reach."

E.U. Approved

The Open PLC European Research Alliance backed by the E.U. has selected DS2 technology as the baseline for its approved open global specification for PLC access. The specification, billed as the first of its kind, has the support of the Universal Powerline Association (UPA), a group that includes a number of broadband over powerline equipment suppliers.

The DS2 co-founder was the keynote speaker addressing next generation networks at Computex Taipei. "The show organizers chose powerline as the keynote speech subject because it is important now," he stressed and added that using high-speed PLC technology home users can instantly connect any network device-router, computer, Xbox, media server, game console. "In fact, any device with a network port can link up to a powerline network to build a network connection anywhere in a home."

Healthy Growth

The past three years have seen the company's chip shipment and revenues grow annually on average between 150 and 200%. "It's really incredible and very strong," said Richards, forecasting the business to grow 130% this year. "We still maintain a high growth rate, shipping 700,000 chips monthly, although we're trying to keep the growth under control," Richards boasted.

To keep up with the runaway growth, DS2 has steadily expanded its scale. Employing around 150 people, the company has an office in Taiwan, Japan and Korea each, and is opening a second office in the United States. "We're also expanding in Europe outside of our headquarters in Valencia," Richards said. The company's offices are dedicated to business development and technical support. "But our engineering team is also growing, with over 100 people doing technology R&D." The Taiwan office in Hsichih, Taipei County, handles operations not only in Taiwan but also mainland China, Hong Kong, and rest of Asia, except Japan.

Distance is the Obstacle

Residential subscription to IPTV (Internet Protocol TV), Richards explained, has been fueling the company's impressive growth. But he noted an important barrier to wider provision of IPTV service: the entry point of the coaxial phone line is seldom close to a television in homes. So service providers have to install lengthy cables to connect set-top boxes to residential gateways. "Faced with the dilemma of seeing cable clutter versus lackluster video streaming provided by wireless technology, PLC, in this case, is perfect," Richards said.

Easy-installation is now the central selling point offered by IPTV operators, further boosting acceptance of PLC solutions, according to Richards. "Some IPTV operators are starting to offer DIY kits: They send all the equipment to customers, who just plug it in the wall outlet, wait a few minutes for authentication from providers, and then watch flawless TV. It works and is a beautiful solution for its very low cost and easy DIY installation," he says.

One of a Kind

Richards ascribes the high-speed signal transmission achieved by DS2's PLC technology mostly to "a mixture of state-of-the-art modulation technology and highly integrated microelectronics." "We are capable of integrating a lot of microelectronics, whether digital or analog, into silicon. So, our formula enables us to effectively create solutions for high-speed video, HD video, and very high broadband sharing. We're the only one worldwide with the analog powerline chip technology," he claimed.

This year, the company has introduced the first industry prototype of a multicarrier modulation (OFDM) 400Mbps chipset, which Richards said will be commercialized next year. "The 400Mpbs chipset allows end users to connect more video devices like set-top boxes and HD players to one single PLC module for seamless video streaming than capable with 200Mbps technology. With increasingly more high-definition home entertainment devices to be inevitably introduced in the future, what are we to do? Of course we need speedier transmission," Richards stressed.

While developing high-speed solutions, DS2 does not neglect the need to build solutions that allow products of different speeds to effectively work together. "That's what we mean by different Mbpses can talk directly to each other," Richards said. Montgo and Aitnan chipset modules are among the company's speed adaptation solutions. Montgo is a 100Mbps PLC modem which allows end users to share audio stream from a 200Mpbs gateway when plugged in its port. "200Mpbs technology is for audiovisual streaming, but audio alone does not need 200Mpbs. When the 200Mbps gateway is connected to Montgo, they talk at 100Mbps speed. So why pay for 200Mpbs just for sound? It's uneconomical. Only DS2 technology directly enables adaptation between two different transmission speeds," he said. Aitnan is a 200Mbps module that allows talking via 400Mbps gateway at 200Mpbs rate.

Another Business Driver

Online gaming sharing is catching up with IPTV to further drive the PLC market, Richards said. "Gaming has a very high threshold-the lightning interaction. When you shoot somebody in a game, the victim has to react instantly, not later. So, you really need a very fast technology to keep up to gaming, which is what we can guarantee," Richards boasted.

Computex Taipei 2008 saw at least two other PLC exhibitors besides DS2, a record for the show. Richards was not worried, however, adding, "A few years ago, only few people knew about powerline technology and you had to explain. Not today. The growing market has seeded the birth of more and more companies to create heretofore unimaginable applications," Richards commented.

Potential Magnet

Richards expects the lucrative PLC-chip market to soon lure big players like Intel and TI into the segment, believing such heavyweights would help get new business off the ground by buying into smaller companies with solid basis. "These major players are still observing the PLC market and may first participate in standard-setting organizations," he said. Samsung has worked with the Spanish company on digital home networking applications.

Big players, Richards stressed, are not always innovators of leading technologies. "In many cases, startups take risk, set trends for others to follow. Take DSL as example: The company behind DSL technology initially was a small company called MRT. When the technology became proven and business viable, only then did the heavyweights come in after TI had bought MRT. Wi-Fi is another example: Small companies developed, proved the technology; then big companies came in, bought them out to follow a similar path," he noted.

When asked if any big player had ever approached him with acquisition offers, Richards smiled and replied: "We've had very attractive offers, but have always preferred to stay as an innovator and technology developer. It's not our goal to close down and be acquired. We want to grow and sustain leadership in the market and standardize it. We believe in our capability and have shown the world we can do it."

Unrivaled R&D Team

Without financial clout backed by big firms, DS2 has to count on its own strength to meet rising competition. However, Richards brims with confidence. "Our company has been competitive over time for our innovativeness: we were the first to make 45Mbps chipset in 2000, the first with 200Mbps in 2004, and the first to introduce 400Mbps technology this year. Our edge is a team of 130 R&D engineers working in digital and analog frameworks. Always working on next-generation technology, they develop the latest and best technology, keeping rivals a step behind," he said.

"You may hear others talk about wanting to develop a 200Mpbs chip too. But ask why they want to do 200Mpbs, not 250Mpbs or 280Mbps? Simply because DS2 has demonstrated with silicon that 200Mpbs transmission is feasible, a capability we are selling on the market. That shows we're the leader: we develop good technology first, improve it, while others follow."

Biggest IPTV Market

Europe is the world's biggest IPTV market, with many big telecom carriers like British Telecom and Telefonica deploying IPTV operation en masse using DS2 powerline solutions, according to Richards. But, Asia is a nascent but fast-growing market. "Asia has many important IPTV initiatives that must not be overlooked. You have PCCW in Hong Kong, Chunghwa Telecom in Taiwan, SingTel in Singapore and a number of operators in Japan and Korea, all of whom are starting to commercialize IPTV, although on a modest scale. The American IPTV market is also only starting, but promising."

PLC markets are growing at various rates according to levels of affluence in different IPTV markets. "Europe has doubled annually. Asia will grow even faster in the 2008-2009 year because the market here is just starting, leaving huge room to speed ahead; while the American market remains to be seen as it is still in a trial stage," Richards said.