The two vendors are reported to have met in SBC's access network, where Ciena is a supplier of ATM/MPLS edge switches (as a result of its acquisition of WaveSmith) and Catena has just entered trials with its line card upgrade to the Lucent SLC-5 Series digital loop carriers (DLCs).
Ciena's switch sits in remote terminals alongside the DLCs. The Ciena platform aggregates DSL channels and packs them onto ATM virtual circuits so they can be digested by the central office gear that's deeper in the network.
Catena's line card turns SBC's POTS-only digital loop carrier into DLCs that can handle voice and data out of every port. The Catena cards and the Ciena switch must get along famously for SBC to be able to provide DSL service for a relatively low network equipment cost.
Does this whole, met-at-SBC, fell-in-love, got-acquired business sound familiar? It should. It's more or less what happened to WaveSmith Networks, the company Ciena invested in and then bought once it proved it had the mettle to win a contract from SBC. Interestingly, the Ciena switch that's working with Catena's technology is the same one it acquired from WaveSmith (see WaveSmith Gets $30M, Signs With Ciena, WaveSmith Wins at SBC, and Ciena Nabs WaveSmith).
Rumors have been flying that Ciena may go the same route with Équipe Communications Corp., a core ATM switch vendor that it has funded and helped considerably over the past couple of years (see Équipe Announces Third Round Funding, Partners with Ciena). "If Équipe were to land a purchase order from an RBOC tomorrow, Ciena would acquire within a few seconds," says once source close to Équipe.
So how likely is it that Ciena -- which began as a long-haul DWDM and transport vendor -- would want to buy a DLC vendor? Well, sources connected to the seamy underworld of investment banking say that once, several years ago, Ciena entered lengthy talks to merge with Advanced Fibre Communications Inc. (AFC) (Nasdaq: AFCI), but nothing ever came of the chatter.
Also, consider the recent investments and acquisitions that Ciena has made. Ciena has made it clear that it wants to be an end-to-end supplier, and upgrading access networks is one of the few telecom equipment areas generating any heat these days.
Table 1: Past Ciena Acquisitions
|Lightera Networks||$483M||March 99||Core switch|
|Omnia Communications||$483M||July 99||Optical transport|
|Cyras Systems||$1.3B||March 01||Sonet MSPP|
|ONI Systems||$398M||June 02||Metro DWDM|
|WaveSmith Networks||$190.4M||June 03||Edge switch|
Additionally, Ciena has made it a point to ensure that the same software management system controls its WaveSmith switches and the Équipe boxes it distributes, a nod towards becoming an end-to-end equipment vendor, rather than a point product vendor (see Ciena Integrates Multiservice Mgmt).
Catena has been somewhat reticent about its success with RBOCs (see Catena Cozies Up to RBOCs and RBOC Whispers for Catena). But the company recently went so far as to say it has received orders from the three largest RBOCs, which would make Verizon Communications Inc. (NYSE: VZ), BellSouth Corp. (NYSE: BLS), and SBC its customers.
It also might be helpful, should talks commence, that one of Catena's investors, Bessemer Venture Partners, also backed Ciena and Omnia, which Ciena acquired.
Ciena and Catena declined to comment for this story.
SBC did not return calls.
— Phil Harvey, Senior Editor, Light Reading