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May 17, 2002
Lucent Technologies Inc. (NYSE: LU) has decided to halt development on its LambdaManager, one of the four strategic optical products announced last fall (see Lucent Unveils Product Lineup).
LambdaManager, originally set for release this month, was planned as a high-end, multiterabit-capacity grooming switch to upgrade the newly released LambdaUnite, which was announced early this year (see Lucent Lights Up LambdaUnite).
"Our carrier customers tell us their capacity needs will be met by the LambdaUnite for the foreseeable future," says a Lucent spokesperson. Lucent has judged that by the time customers are ready to move beyond the LambdaUnite's 1.28-Tbit/s capacity, the next iteration of LambdaUnite will have evolved to handle demand.
Lucent doesn't have a timeframe for when it thinks new capacity may be sought, however. "The market is difficult right now," says the spokesperson.
Lucent acknowledges some layoffs will be associated with the discontinuance of LambdaManager development, although it can't say just when that might happen or how many employees will be involved. Separate sources close to the company, however, have told Light Reading that layoffs of about 250 will likely happen within 30 days.
Lucent's LambdaManager was meant to be a high-end grooming switch with STS-1 granularity, competing with the likes of the CoreDirector from Ciena Corp. (Nasdaq: CIEN). But analysts say the market for larger-size OEO switches just isn't there at the moment.
"The bigger machines are falling out of favor with carriers," says Sam Greenholtz, senior analyst at Communications Industry Researchers Inc. Carriers don't want to buy for capacity they may not be able to fill, he says. And since the terrorist attacks in the U.S. last September, there's resistance to putting too many connections in one place, in case of outages, Greenholtz says.
"Lucent probably saw the prospect of limited sales at best and said, 'Let's get out while we can.' "
Lucent's not the first vendor to pull development of large switch gear. Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) was first to end its high-end switch effort back in November 2001 (see Tellabs Pulls a Switch). And sources say the recent demise of Brightlink Networks (see BrightLink to Shut Down This Week) attests to a present lack of support in the market for monster OEO grooming switches.
Lucent says the halting of LambdaManager won't affect the traction of the other three products in its Lambda lineup, all of which became generally available this quarter.
LambdaUnite is in field trials at Deutsche Telekom AG (NYSE: DT), the vendor says. It's also in the process of being certified to run on the network of a "major European carrier" and is presently in lab trials at about "a dozen" other carriers.
The LambdaXtreme DWDM core transport box (see Lucent Lays on More Lambdas ) is in 40-Gbit/s field trials at Deutsche Telekom, Lucent says, as well as field trials with a "large North American carrier" and lab trials with six others.
The TMX 880 MPLS Core Switch (formerly named the Multiservice Xchange Switch), which competes with ATM-to-packet gear from Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Équipe Communications Corp., and others, is in lab trials with a "small amount of customers," Lucent says.
— Mary Jander, Senior Editor, Light Reading
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