Julio Perdomo, CEO, Centellax
NF: Although this is an evolving market, many firms have made their living by offering the same types of products for decades. Recently, however, Centellax made a bold change by selling its test and measurement business to Agilent Technologies. What inspired this move?
JP: Centellax’s initial mission was to develop high-speed components for optical communications. Our test business grew from the need to test our own products and the opportunity for others to benefit from our test development. Both businesses have grown substantially. And both demanded dedicated focus from management as well as investment to capitalize on opportunities. Considering the choices of where to focus as a company and the challenges ahead, we decided to continue with our original mission and divest our test business.
NF: As part of Centellax, did you feel that the test and measurement business was limited in its growth potential?
JP: No. We are very proud of the products that we developed. And the acquisition by Agilent is a validation of the innovation and value that we created. There is great potential for these products in the growing markets that they serve. I am sure that Agilent, with its extensive sales channel and worldwide coverage, will take full advantage of that business potential.
NF: The test and measurement product line was one of the firm’s “babies;” I’m sure it was hard to let it go. What gave you the confidence to sell the business to Agilent in particular? Did the company have a relationship with Agilent prior to the transaction that might have encouraged your choice?
JP: Agilent is the number-one test company in the world. Under its leadership, I feel confident that the team and the technology that we developed will thrive. Although many of us are familiar with the excellence of Agilent as a company and as a technology leader, there was no specific prior relationship other than as a customer.
NF: What is the firm’s core concentration since selling the test business?
JP: Our focus is to design and manufacture components for optical communications used in telecommunications, data communications, and data-center applications. We also offer a product line for RF and microwave applications.
NF: With more of a streamlined operation, what do you feel that Centellax can better accomplish?
JP: We are focusing on being more responsive to changing market needs and better supporting our customers. We are expanding our current portfolio to better serve our customers with the technologies and products that they want.
NF: Do you have any advice for other microwave companies looking to make bold moves to reorganize their firms?
JP: I believe the key to success is focusing on core competences and product roadmaps to better serve your customer base.
NF: Centellax was established in 2001. The last 11 years have been quite a bumpy ride. How has the company weathered the storms?
JP: We have adapted our core technology of integrated circuit (IC)/packaging design to address the changing demand for high-speed, high-performance products. Our test-business success was also based on this core technology.
NF: Do you expect the role of optical technology in future communications rollouts [fourth generation (4G) and beyond] to shrink or remain stable? Why?
JP: Due to the bottleneck in high-speed data transmission, there is a growing demand for greater capacity in optical-communication systems operating at 40 Gb/s, 100 Gb/s, and soon-to-come 400 Gb/s. Centellax has experienced major growth in 40G in the last three years. We see the same trend in 100G for 2013 and beyond. This supports the market-research studies that indicate the large growth of these markets through the next five years.
NF: What are the major technical challenges that your customers are trying to overcome to succeed in those rollouts?
JP: Our customers need to reduce system cost and maintain excellent performance with unquestionable quality and reliability. It is our job to provide them with products that offer lower power dissipation and packaging cost with the performance they need to meet their goals.
NF: Do you see those challenges becoming more complex? Or do you predict that you will be dealing with new issues in the future?
JP: We expect to see higher-level modulation schemes to achieve higher spectrum efficiency. This trend is similar to what we observed in the RF communications markets. The challenges make things more complex because some requirements contradict each other, like higher dynamic range, lower power dissipation, higher linearity, and lower noise. To meet these requirements, new techniques will have to be used at the IC level. That will make the design more complex.
NF: Right now, you are supporting 40G, 100G, and 400G optical communications with your products. Where do you see optical communications going beyond 400G? Will Centellax be prepared to support such an evolution?
JP: The drivers for the evolution of the optical-communications transmission rate are the need for lower cost and higher efficiency in data transfer. To some extent, cost is addressed with lower power dissipation and more integration. The higher-transmission efficiency requirements are addressed by higher degrees of complex modulation. We are engaged in developing the technology and products to address these requirements by integrating more functionality into the products, reducing form factors, and lowering power dissipation.