Rockley Photonics Award Write Up

2017 Global Data CenterNetworking Infrastructure

Technology Innovation Award

BEST PRACTICES RESEARCH

© Frost & Sullivan 2017 2 “We Accelerate Growth”

Contents

Background and Company Performance ........................................................................ 3

Industry Challenges .............................................................................................. 3

Technology Attributes and Future Business Value ..................................................... 3

Conclusion........................................................................................................... 6

Significance of Technology Innovation .......................................................................... 7

Understanding Technology Innovation .......................................................................... 7

Key Benchmarking Criteria .................................................................................... 8

Best Practice Award Analysis for Rockley Photonics ......................................................... 8

Decision Support Scorecard ................................................................................... 8

Technology Attributes ........................................................................................... 9

Future Business Value ........................................................................................... 9

Decision Support Matrix ...................................................................................... 10

The Intersection between 360-Degree Research and Best Practices Awards ..................... 11

Research Methodology ........................................................................................ 11

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 12

About Frost & Sullivan .............................................................................................. 13



Background and Company Performance

Industry Challenges

The number of devices connected to the Internet and leveraging cloud services is growing

exponentially, primarily driven by the proliferation of Internet of Things (IoT) and

connected living. Moreover, the increasing use of applications such as virtual reality and

artificial intelligence is leading to the demand for faster computing capabilities at data

centers. As a result, the sheer volume of data being processed by data centers worldwide

is increasing multi-fold. Data centers, therefore, are required to scale up in line with the

growing use, which introduces certain technical and business challenges. While Moore’s

Law remains valid for scaling up of microelectronics to meet processor demands, it does

not consider the increasing power consumption and limited capabilities of the input/output

(I/O) interface.

The cost associated with upgrading or scaling up data center network capacity arises from

two major components: the high cost of the incredible number of latest generation

networking components and the cost of energy required to power it all. Compounding this,

linear scaling up of data center compute capacity is associated with exponential scaling up

of networking components.

While single mode optical fibers are being adopted as the networking medium in mega

data centers, conventional packet switching still consists of a vast number of discreet

electrical to optical transmitters at significant cost and power consumption.

Headquartered in the United Kingdom, Rockley Photonics has approached the challenges

of cost and power consumption by integrating complementary metal oxide semiconductor

(CMOS) chips with silicon photonics for integrated optical I/O functionality. The product,

including a high level of technology integration, and the attendant reference designs and

software are expected to be the first of their types in the industry and will undoubtedly

provide a glimpse of future networking technology.

Technology Attributes and Future Business Value

Visionary Innovation

Rockley Photonics was founded in 2013, with the vision of addressing current challenges

faced by data centers and leveraging a “third generation” of silicon photonics technology.

The company understood the key scaling challenge that limits the efficiency of mega data

centers and accurately foresaw the potential of silicon photonics in addressing this

challenge.

Rockley Photonics has undertaken a unique approach of integrating its breakthrough

silicon photonics technology, conventional microelectronics and software to enable highly

scalable switch designs that have complete interoperability with industry standards. The



simplified switch design can increase the bandwidth and speed of data centers, while

minimizing power and component requirements. The support for Software Defined

Networks and Rockley’s highly innovative (albeit optional) datacenter architecture IP

provides additional opportunities for network architects to explore further network

optimization scenarios. This bold leap into the future not only enables network architects

to build networks in the same manner they currently do (at lower cost and power), but

also opens up new architecture design opportunities that may be more optimally adapted

to the workflow environment.

While competing established technologies can currently handle switching requirements,

with an increase in demand and evolving application/workflow environments, Rockley

Photonics will be best suited to address the networking challenges in the future.

The team at Rockley Photonics comprises experts in the field of silicon photonics, data

center architecture engineering and design, software, CMOS electronics, packaging

engineering, and network engineering. This diverse, yet focused and dedicated, team has

allowed the company to achieve remarkable technological advances across multiple

disciplines for next-generation data centers and other communication fields. Within three

years, the company has expanded to about 70 employees and has an established

presence in the United Kingdom, the United States, and Finland.

The visionary innovation exhibited by Rockley Photonics is unmatched in the industry and

addresses the key networking bottlenecks faced in mega and hyper scale data centers.

Product Impact

Rockley Photonics is poised to launch its first product in 2017 and is primarily focusing on

packet switching for mega data centers. This market is the largest and most relevant for

silicon photonics technology, primarily because of the introduction of 25 gigabits per

second (Gbps) lane rates and 100 Gbps Ethernet. Based on the integration of photonics

and CMOS technology, the product allows step-wise upgrading of the switching

technology. Therefore, instead of creating a network of boxes with high-speed circuit

boards, optical transceivers, and separate digital packet processing chips or packet switch

application-specific integrated circuits (ASICs), Rockley Photonics collapses these

components into a single, highly scalable digital packet switch processing chip-set

packaged with integrated photonic interfaces.

This feature provides Rockley Photonics with an advantage over competing technologies

and allows data center architects to upgrade the infrastructure in a simpler cost-efficient

manner.

Industry Impact

The integrated optical I/O silicon photonics technology will play a key enabling role in the



scaling up of mega data centers, and Rockley Photonics is poised to contribute to the

transformation. The future of data centers will be based on an amalgamation of electronics

and photonics technology. Rockley Photonics will provide data center architects with the

power to scale up networking infrastructure to meet computing demands, without

compromising on energy consumption.

Energy consumption is one of the major drawbacks for the current generation of data

centers, and the use of purely electronic components will accentuate this problem. Rockley

Photonics is providing the perfect balance of electronics and optics technology, which will

economically ease the upgradation of data centers, while positively addressing the issue of

data centers’ energy consumption. This solution will benefit numerous industries where

data centers act as the backbone, such as the Internet, analytics, IoT, and connected

living.

The unique low-cost, low-power optical I/O technologies developed for the switching

solution can also be “wrapped” around any digital ASIC or used in more discreet optical

transceivers. The deployment of the technology in these applications will offer greater

impact in an industry seeking numerous paths to critical CAPEX and OPEX reductions.

Scalability

Rockley Photonics is a fabless silicon photonics company, and its product manufacturing is

outsourced to dedicated foundries. The company has developed the manufacturing

processes and designs in-house but is based on existing practices and technologies. The

ecosystem of silicon photonics manufacturing is established; therefore, the technology is

highly scalable. Rockley Photonics has established relationships with various foundries,

packaging contract manufacturers, and system manufacturers.

The use of mature manufacturing technologies and the leveraging of the fabless business

model allow Rockley Photonics to scale up manufacturing without any additional capital

investments.

Application Diversity

While data centers are the primary application that will adopt silicon photonics-enabled

packet switches in the short term, the technology’s application potential will expand in the

longer term. Rockley Photonics’ technology will be relevant for use inside servers, for

connecting various functional elements such as the central processing unit (CPU), and for

memory blocks. In addition, the technology can cater to miniaturized computing devices

such as smartphones and tablets, where interconnects will eventually transform from

electrical to optical technology.

Rockley Photonics is targeting packet switching for the data center as it is currently the

most relevant application. With the proliferation of the silicon photonics technology, the

company will move to allied areas.



Technology Licensing

Rockley Photonics has developed a strong intellectual property (IP) portfolio, covering

various aspects of silicon photonics technology, including design, processes, and

technology utilization for data centers and other applications. Even though the company is

currently operating under the fabless semiconductor company model, where the

manufacturing of components is primarily outsourced to dedicated foundries, the company

is poised to leverage technology licensing as a business model. With the licensing model,

the company will be able to target diverse applications of the promising field of silicon

photonics. Having a strong IP portfolio provides Rockley Photonics with the option of

venturing into the licensing model in the future.

Conclusion

Increased network traffic and demand for higher speed data transfer in mega data centers

lead to the requirement for upgrading the networking infrastructure. Rockley Photonics

uses a novel approach of integrating silicon photonics with CMOS chips to deliver packet

switching solutions that will enable this transformation, while limiting capital expenses and

decreasing overall power consumption. The company is poised to play a transformational

role in the future of mega data center infrastructure.

As a result of its overall performance, Rockley Photonics has earned the 2017 Global

Technology Innovation Award for data center networking infrastructure.



Significance of Technology Innovation

Ultimately, growth in any organization depends upon finding new ways to excite the

market, and upon maintaining a long-term commitment to innovation. At its core,

technology innovation or any other type of innovation can only be sustained with

leadership in three key areas: understanding demand, nurturing the brand, and

differentiating from the competition.

Understanding Technology Innovation

Technology innovation begins with a spark of creativity that is systematically pursued,

developed, and commercialized. That spark can result from a successful partnership, a

productive in-house innovation group, or the mind of a singular individual. Regardless of

the source, the success of any new technology is ultimately determined by its

innovativeness and its impact on the business as a whole.



Key Benchmarking Criteria

For the Technology Innovation Award, Frost & Sullivan analysts independently evaluated

two key factors—Technology Attributes and Future Business Value—according to the

criteria identified below.

Technology Attributes

Criterion 1: Industry Impact

Criterion 2: Product Impact

Criterion 3: Scalability

Criterion 4: Visionary Innovation

Criterion 5: Application Diversity

Future Business Value

Criterion 1: Financial Performance

Criterion 2: Customer Acquisition

Criterion 3: Technology Licensing

Criterion 4: Brand Loyalty

Criterion 5: Human Capital

Best Practice Award Analysis for Rockley Photonics

Decision Support Scorecard

To support its evaluation of best practices across multiple business performance

categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool

allows our research and consulting teams to objectively analyze performance, according to

the key benchmarking criteria listed in the previous section, and to assign ratings on that

basis. The tool follows a 10-point scale that allows for nuances in performance evaluation;

ratings guidelines are illustrated below.

RATINGS GUIDELINES

The Decision Support Scorecard is organized by Technology Attributes and Future

Business Value (i.e., the overarching categories for all 10 benchmarking criteria; the

definitions for each criteria are provided beneath the scorecard). The research team

confirms the veracity of this weighted scorecard through sensitivity analysis, which

confirms that small changes to the ratings for a specific criterion do not lead to a

significant change in the overall relative rankings of the companies.



The results of this analysis are shown below. To remain unbiased and to protect the

interests of all organizations reviewed, we have chosen to refer to the other key players

as Competitor 2 and Competitor 3.

DECISION SUPPORT SCORECARD FOR TECHNOLOGY INNOVATION AWARD

Measurement of 1–10 (1 = poor; 10 = excellent)

Technology Innovation

Technology

Attributes

Future

Business Value Average Rating

Rockley Photonics 9 9.5 9.25

Competitor 2 7 7.0 7.00

Competitor 3 6 6.5 6.25

Competitor 4 8 6 7.00

Technology Attributes

Criterion 1: Industry Impact

Requirement: Technology enables the pursuit of groundbreaking new ideas, contributing

to the betterment of the entire industry

Criterion 2: Product Impact

Requirement: Specific technology helps enhance features and functionality of the entire

product line for the company

Criterion 3: Scalability

Requirement: Technology is scalable, enabling new generations of products over time,

with increasing levels of quality and functionality

Criterion 4: Visionary Innovation

Requirement: Specific new technology represents true innovation based on a deep

understanding of future needs and applications

Criterion 5: Application Diversity

Requirement: New technology serves multiple products, multiple applications, and

multiple user environments

Future Business Value

Criterion 1: Financial Performance

Requirement: High potential for strong financial performance in terms of revenues,

operating margins and other relevant financial metrics

Criterion 2: Customer Acquisition

Requirement: Specific technology enables acquisition of new customers, even as it

enhances value to current customers



Criterion 3: Technology Licensing

Requirement: New technology displays great potential to be licensed across many sectors

and applications, thereby driving incremental revenue streams

Criterion 4: Brand Loyalty

Requirement: New technology enhances the company’s brand, creating and/or nurturing

brand loyalty

Criterion 5: Human Capital

Requirement: Customer impact is enhanced through the leverage of specific technology,

translating into positive impact on employee morale and retention

Decision Support Matrix

Once all companies have been evaluated according to the Decision Support Scorecard,

analysts can then position the candidates on the matrix shown below, enabling them to

visualize which companies are truly breakthrough and which ones are not yet operating at

best-in-class levels.

DECISION SUPPORT MATRIX FOR TECHNOLOGY INNOVATION AWARD



The Intersection between 360-Degree Research and Best

Practices Awards

Research Methodology

Frost & Sullivan’s 360-degree research

methodology represents the analytical

rigor of our research process. It offers a

360-degree-view of industry challenges,

trends, and issues by integrating all 7 of

Frost & Sullivan's research methodologies.

Too often, companies make important

growth decisions based on a narrow

understanding of their environment,

leading to errors of both omission and

commission. Successful growth strategies

are founded on a thorough understanding

of market, technical, economic, financial,

customer, best practices, and demographic

analyses. The integration of these research

disciplines into the 360-degree research

methodology provides an evaluation

platform for benchmarking industry players and for identifying those performing at best-

in-class levels.

360-DEGREE RESEARCH: SEEING ORDER IN

THE CHAOS



Best Practices Recognition: 10 Steps to Researching,

Identifying, and Recognizing Best Practices

Frost & Sullivan Awards follow a 10-step process to evaluate award candidates and assess

their fit with select best practice criteria. The reputation and integrity of the Awards are

based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify award recipient candidates from around the globe

• Conduct in-depth industry research

• Identify emerging sectors • Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

• Interview thought leaders and industry practitioners

• Assess candidates’ fit with best-practice criteria

• Rank all candidates

Matrix positioning all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

• Confirm best-practice criteria • Examine eligibility of all candidates

• Identify any information gaps

Detailed profiles of all ranked candidates

4

Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

• Brainstorm ranking options • Invite multiple perspectives on candidates’ performance

• Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5

Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

• Share findings • Strengthen cases for candidate eligibility

• Prioritize candidates

Refined list of prioritized award candidates

6

Conduct global industry review

Build consensus on award candidates’ eligibility

• Hold global team meeting to review all candidates

• Pressure-test fit with criteria • Confirm inclusion of all eligible candidates

Final list of eligible award candidates, representing success stories worldwide

7 Perform quality check

Develop official award consideration materials

• Perform final performance benchmarking activities

• Write nominations • Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8

Reconnect with panel of industry experts

Finalize the selection of the best-practice award recipient

• Review analysis with panel • Build consensus • Select winner

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform award recipient of award recognition

• Present award to the CEO • Inspire the organization for continued success

• Celebrate the recipient’s performance

Announcement of award and plan for how recipient can use the award to enhance the brand

10 Take strategic action

Upon licensing, company may share award news with stakeholders and customers

• Coordinate media outreach • Design a marketing plan • Assess award’s role in future strategic planning

Widespread awareness of recipient’s award status among investors, media personnel, and employees



About Frost & Sullivan

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