And Now: The Optical Arms Race

May 29, 2003
© 2000-2003 Light Reading, Inc.
By R. Scott Raynovich and
William Quigley, Managing Director
Clearstone Venture Partners






Venture capitalists poured billions of dollars into optical technology during the boom. Needless to say, not all of it has been deployed. Now some investors are looking for ways to use the idle technology (other than as landfill, that is).

William Quigley, a venture partner at Clearstone Partners is bullish on optical technology transfer -- particularly for use in the U.S. military, where the budgets are big and the technology advanced. He believes it’s a massive new market, particularly for communications applications.

“For this industry to get out of the doldrums it’s going to have to start looking at markets that are totally different,” says Quigley.

There is evidence that the market for advanced communications is heating up in the federal government. A range of public systems companies are now pursuing large-scale government communications networks being built in the much-hyped DISA project (see DISA Deal D-Day Approaches).

So how would optical technology be used by the armed forces (apart from busting the enemy's bunker by dropping a Sonet crossconnect on it)? The growth in the use of laser-guided bombs, for one, has been well publicized. But there are other elements of high-tech warfare to consider. Intelligence data is hefty and needs to be moved quickly over advanced telecom networks. The computers aboard unmanned drone aircraft, for example, are constantly processing gigabits of information and need some way to communicate with humans on the ground.

Quigley has invested in one company called Aoptix Technologies, a company that has developed a MEMS (micro-electro-mechanical system) technology that he calls the “bendy mirror.” Unlike the MEMS devices used in optical switches, which are usually based on tilting flat mirrors, the bendy mirror can be curved by applying a voltage. According to Quigley, this allows for the mirror to correct for the distortion in laser signals, which makes it optimal for catching communications signals sent to moving targets [ed. note: and it can also make you look really fat, with little short legs].

Aoptix is working on such military communications applications via a free-space optics communications system. For example, a vehicle on the ground could use lasers and bendy MEMS to communicate with a drone plane in the sky.

Another one of Quigley's companies, Phasebridge, is working on long-haul optical technology as well as RF and microwave communications for the military.

Apparently this has been enough to have sold other investors besides Quigley. Last year Aoptix raised a Series B round from investors led by Lehman Brothers and 3i Group plc. Quigley's Clearstone also participated in the round, along with top-tier Silicon Valley VC Kleiner Perkins Caufield & Byers.

Quigley’s not stopping with unnmanned drones. He points out that optical technology has applications in the shipping, mining, navigation, and even agriculture industries.

“Farmers need sophisticated laser equipment to make sure they plow their fields straight,” says Quigley. And no, he’s not joking. He also says that lasers are big in shipping ports, where they are used to line up container ships for unloading, and for ship-to-ship communication -- again an application of free-space optics.

But Quigley says transferring optical technology from telecom to the military or other industries is not as easy as renaming a company. It takes a whole new line of research and relationships. He says much of the work involves cultivating the likes of lobbyists, industry giants, and government purchasing agents [ed. note: an ugly job, but...].

“Taking a company from the telecom space and retrofitting it for the military doesn’t work. You have to start over.”

Some optical technologies started out being developed for other industries and were adapted for telecom applications. Examples of this include MEMS, liquid crystals, and holography. In other words, some companies may be going back to the markets from whence they came.

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