Light Reading

Infinera Shifts Up a Gear

Ray Le Maistre
3/13/2014
50%
50%

SAN FRANCISCO -- OFC 2014 -- After years of showing significant promise, it looks like 2014 and beyond might be something of a golden era for transport equipment vendor Infinera Corp. (Nasdaq: INFN).

Why? I'm basing that opinion on a combination of evidence, third-party opinion, and gut feel.

And, perhaps ironically, it comes on the back of what might seem like a major setback for the company, as it recently missed out on a transport equipment tender at Verizon Communications Inc. (NYSE: VZ). (See Analyst: Infinera Loses VZ Deal to AlcaLu.)

Word on the show floor here at OFC, though (and not, I should say, from anyone at Infinera), is that the Verizon deal was not as lucrative as many might have thought, although that is just conjecture.

The thing is, Infinera is doing pretty well without that deal, and it looks like the company's financial health might be on course to improve.

CEO Tom Fallon, who is known for being cautious when talking about Infinera's business potential, noted during the company's most recent earnings call that he was confident of picking up new deals, including business from new Tier 1s, this year. (See Infinera: We're Fine, Thanks… and Windstream Taps Infinera for National Buildout.)

Those financials, announced in late January, gave the vendor's share price a lift, sending it north of $9.00 on January 30.

The stock got another boost this week when Goldman Sachs upgraded Infinera to a "buy" rating, sending the stock up by almost 15% Wednesday to $9.71.

And while it dipped again during Thursday trading, an after-hours surge took Infinera's share price back to the $9.71 mark.

Other analyst firms here at OFC, including Jefferies & Co. Inc. and MKM Partners , have also reported positively on the vendor's prospects, and overall analyst consensus is that the company will increase its annual revenues to more than $613 million this year from $544 million in 2013, a rate of nearly 13% (if the forecasts are accurate).

And then there's the metro market. Infinera, which has a reputation for developing systems that are easy to deploy and enable fast service provisioning, has long talked about how it might develop a photonic integrated chip (PIC) for a metro platform. Now that time has nearly come: The company has now developed a PIC for the metro, Senior Director of Corporate Marketing Mark Showalter told me here this week, though exact plans for a metro product, and the timing around the launch of such a product, have not been announced.

That product, which some here have dubbed the DTN-M, looks set to be a significant addition to the metro transport systems market, which the optical sector expects to take off this year and hit its stride in 2015 as demand for network capacity continues to grow, driven by intra-data center traffic, video, and consumer fixed/mobile broadband usage.

In his recent report, The Rise of 100G & Terabit Transport Networks, Heavy Reading Senior Analyst Sterling Perrin notes that the market for 100G metro systems is set to grow from about $400 million this year to more than $2.1 billion in 2018.

The metro market is highly competitive. But if Infinera can take the best features of its PIC and build an affordable system that retains the company's core customer-friendly strengths (ease of use and speedy provisioning), it stands a very good chance of grabbing a healthy slice of that fast-growing metro 100G sector.

I wouldn't bet against it.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

(7)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
tojofay
100%
0%
tojofay,
User Rank: Light Sabre
3/15/2014 | 10:31:39 AM
Re: check your survey on the right side of the page
"In the future when we enable metro-reach super-channels using PM-16-QAM, they will support 24 Terabit-per-second per fibre pair using the line system we are announcing," says Geoff Bennett, director, solutions and technology at Infinera.
Liz Greenberg
50%
50%
Liz Greenberg,
User Rank: Light Sabre
3/14/2014 | 6:44:22 PM
Re: And From the Cubicles
So @mendykI see that you have no strong opinion on glassdoor!  Just joking, but it is an important reminder to make sure that we all watch who we use as our sources of information in this "information age".
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
3/14/2014 | 2:50:08 PM
Re: And From the Cubicles
I would trust nothing posted on Glassdoor, pro or con. It's a garbage heap of a site.
Jessie Morrow
100%
0%
Jessie Morrow,
User Rank: Lightning
3/14/2014 | 2:30:33 PM
Re: And From the Cubicles
mendyk - a perusal of the Infinera comments on Glassdoor if anything tilt towards  the positive. My apologies for including a negative comment in my first post, here is something to restore a modicum of fairness and balance;

"Great place for cutting edge technology and reasonable management"
mendyk
100%
0%
mendyk,
User Rank: Light Sabre
3/14/2014 | 2:08:00 PM
Re: And From the Cubicles
Jessie -- You should know that Glassdoor is mainly used by disgruntled employees (or former employees) to trash companies anonymously. Using it to judge the quality of a company is absurd.
tojofay
100%
0%
tojofay,
User Rank: Light Sabre
3/14/2014 | 12:49:16 PM
check your survey on the right side of the page
Only 1 company 1tbit capable and soon 10tbit capable and more then half respondents believe that is the future
Jessie Morrow
0%
100%
Jessie Morrow,
User Rank: Lightning
3/14/2014 | 12:29:21 PM
And From the Cubicles
And  on the rarely heard employee side of the roster are many pro and con opinions of Infinera, http://www.glassdoor.com/Reviews/Infinera-Reviews-E15060.htm 

A recent gripe: "  Limited scope for growth; consistently low stock price; lack of clear direction in roadmap; only few research and development opportunities."
More Blogs from Shades of Ray
The global launch of Huawei's P8 smartphone was stage-managed within an inch of its life – but it didn't need to be.
There's a lot to take in regarding the planned combination of Nokia and Alcatel-Lucent – here's a quick guide to our coverage.
The potential merger of Nokia and Alcatel-Lucent will throw a spotlight on some key decisions that need to be made, particularly related to the wireless portfolio, IP relationships and management of the combined company.
Deadline extension means there are still a few more days to submit those winning entries, but don't delay -- April 10 is the final deadline and then the judging begins.
British carrier really wants to sweat that copper plant and sees a real opportunity to use that asset for high-speed backhaul.
Flash Poll
From The Founder
Ericsson's Hyperscale Datacenter System (HDS) 8000, featuring Intel's Rack Scale Architecture, caused a stir when it was announced at MWC 2015. For more on this revolutionary product, join me on Thursday, April 30 at 12:00 p.m. EST for a Super Webinar event, A New Hardware Paradigm for the Telco Data Center.
LRTV Documentaries
CableLabs' Clarke Updates Cable Virtualization

4|23|15   |   05:41   |   (1) comment


Former BT exec now leading CableLabs' NFV and SDN efforts explains key role of open source and updates efforts to virtualize the home network.
LRTV Interviews
Ericsson's CTO Talks Transformation: Pt. II

4|23|15   |   08:19   |   (1) comment


In the second installment of an in-depth two-part interview, Ericsson's CTO Ulf Ewaldsson talks to Light Reading CEO and founder Steve Saunders about cultural change, network slicing and technology advances.
LRTV Interviews
Ericsson's CTO Talks Transformation: Pt. I

4|23|15   |   09:27   |   (3) comments


In the first installment of an in-depth two-part interview, Ericsson's CTO Ulf Ewaldsson talks to Light Reading CEO and founder Steve Saunders about the incredible transformation underway in the communications networking industry.
LRTV Documentaries
LTE Paves the Way for the 5G Revolution

4|20|15   |   4:20   |   (0) comments


Håkan Andersson, head of 5G product strategy of the Radio Business Unit at Ericsson, discusses the role of LTE, the US and other industry verticals in building a true 5G ecosystem.
LRTV Documentaries
The 3GPP's Road to 5G Standardization

4|17|15   |   4:43   |   (0) comments


Satoshi Nagata, chairman of the 3GPP's TSG-RAN group and a manager at NTT Docomo, explains the standardization process for 5G, as well as the biggest challenges and opportunities.
LRTV Documentaries
AlcaLu CTO Makes the Case for a New 5G Air Interface

4|16|15   |   3:54   |   (0) comments


Michael Peeters, CTO of wireless at Alcatel-Lucent, explains why 5G will require a new air interface to meet its diverse performance targets.
LRTV Documentaries
AlcaLu + Nokia: The New Uber-Vendor

4|15|15   |   2:42   |   (4) comments


Heavy Reading Senior Analyst Gabriel Brown discusses the technological and competitive opportunities and challenges if a merger between Alcatel-Lucent and Nokia comes to pass.
LRTV Huawei Video Resource Center
Huawei's Data Center Power Play

4|15|15   |   6:22   |   (0) comments


Huawei has developed industry-leading energy efficiency capabilities for its indoor and outdoor data center solutions, explains Dr. Fang Liangzhou, vice president of Huawei's Network Energy product Line.
LRTV Huawei Video Resource Center
Huawei’s Routers, Switches Get the Green Mark

4|15|15   |   2:02   |   (0) comments


TUV Rheinland's Frank Dudley explains how Huawei's routers and switches have been successfully tested by energy efficiency experts and have gained Green Mark Certification.
LRTV Documentaries
A Finn, a Frenchman & a Guy From New Jersey Walk Into a Merger...

4|15|15   |   3:17   |   (0) comments


Stop us if you've heard this one before... Light Reading CEO Founder & CEO Steve Saunders weighs in on the technical and cultural implications of a Nokia and Alcatel-Lucent merger.
LRTV Huawei Video Resource Center
Accounting for Better Solutions

4|10|15   |   02:31   |   (1) comment


Murad Yousuf, CTO at Saudi Arabia's Ministry of Finance (Dept. of Zakat & Income Tax), talks about the benefits of deploying router technology from Huawei.
LRTV Huawei Video Resource Center
What's in Store for Huawei & DataCore?

4|10|15   |   05:44   |   (0) comments


At the CeBIT trade show in Hannover, Germany, George Teixeira, CEO of software-defined storage (SDS) specialist DataCore Software, explains why he has just signed a partnership agreement with Huawei Technologies.
Upcoming Live Events
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
In its latest survey covering network operators' plans and strategies for ICT transformation, Heavy Reading asked telecom operators worldwide to identify the most important goals and objectives for their ICT transformation initiatives. Heavy Reading also asked operators about the importance of a "digital first" strategy, which enables customers to complete an interaction across different digital channels, such as web and mobile self-service and social media.
Hot Topics
What if the Comcast Merger Fails?
Mari Silbey, Independent Technology Editor, 4/20/2015
Google's WiFi-First Mobile Service 'Fi' Is Here
Dan Jones, Mobile Editor, 4/22/2015
Comcast Formally Ends Its Bid for TWC
Mari Silbey, Independent Technology Editor, 4/24/2015
Comcast Merger May Hinge on Hulu
Mari Silbey, Independent Technology Editor, 4/22/2015
Google Ready to Release Thousands of Loons
Sarah Thomas, Editorial Operations Director, 4/20/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Many leading communications companies can claim to have undergone significant periods of reinvention during their histories, but none have been through more major ...
Data Center Interconnect, or DCI, is one of the hottest sectors in telecom currently. Since coming back to Light Reading last year, prodigal-son style, I've ...
Cats with Phones
Learning Curve Click Here
Pierre could never remember how to use Excel.
Latest Comment