InAs quantum dots (QD) have been shown to extend the optical emission range for III-V heterostructures pseudomorphically grown on GaAs substrates. One of the ways to achieve 1.3 micron emission from the InAs QDs is to overgrow them with an In-containing alloy layer. In the present work we study structural and optical properties of InAs/In(Ga,Al)As QD structures grown by MBE on GaAs substrates using transmission electron microscopy (TEM), photoluminescence (PL), and electroluminescence (EL). We show that the main reason for the increase in the PL wavelength is the phase separation of the In(Ga,Al)As alloy stimulated by the InAs islands and the effective matrix bandgap plays a minor role. As the result of the local composition modulation, the effective volume of a QD is increased due to the enhancement of In concentration in the vicinity of the InAs island. We study how the effective thickness of InAs and InGaAs affect the crystal perfection and PL peak energy. Using the AlGaAs as a matrix also led to the noticeable red shift of the quantum dot PL line as compared to the GaAs matrix. Possible reasons for this unexpected phenomenon are discussed. Characteristics of the GaAs-based vertical cavity surface emitting structures and high power CW RT edge-emitting lasers for the 1.3 micron range using these QDs are be presented.