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Optical/IP

Ciena Seals Verizon Deal

Ciena Corp. (Nasdaq: CIEN) has finally closed a deal that helped spur its interest in buying WaveSmith Networks last year.

Verizon Communications Inc. (NYSE: VZ) is using the DN 7100 and DN 7200 multiservice switches in its network expansion, Ciena announced today. The systems will handle Asynchronous Transfer Mode (ATM) and Frame Relay traffic at the network edge; and they're also slated for aggregating broadband traffic from Verizon's fiber-to-the-premises (FTTP) plan, says Chuck Sullivan, senior product marketing manager of Ciena's Data Networking Group (see Verizon Selects Ciena Switch).

"We are enhancing their carrier revenues, but we're also part of the future revenue growth at Verizon," Sullivan says. He adds that Ciena has already begun drawing revenues from the deal.

Sullivan wouldn't comment on the size of the Verizon deal, but sources last year pegged it at $20 million (see Ciena Wants WaveSmith for $170M).

Ciena stock responded by jumping this morning to $5.99 -- roughly a 3 percent hike -- but quickly gave up those gains. The stock closed unchanged today at $5.82.

WaveSmith was already a frontrunner for this deal when Ciena made its $178 million acquisition offer. WaveSmith at the time had six customers, including SBC Communications Inc. (NYSE: SBC). (See Wavesmith: Giant Killer? and Ciena Nabs WaveSmith.)

Ciena hasn't had the greatest luck with acquisitions lately, but WaveSmith has the potential to change that. "Out of all the acquisitions, that one's probably doing the best," says Susan Kalla, analyst with Friedman Billings Ramsey & Co. Inc.

But the Verizon deal probably won't assuage concerns that Ciena is spending over its head on acquisitions, particularly after last month's one-two punch of Catena Networks Inc. and Internet Photonics Inc. Analysts say Ciena is trying to pad its revenues with the purchases, but Ciena officials say they're investing in a company "transformation" beyond optical transport (see Ciena Buys More Than Catena and Ciena Buying Binge Alarms Analysts).

Kalla thinks the acquisition binge could pay off, even if certain purchases don't pan out. "You're in a down market where the small businesses are just on death's door, so a medium-sized business can use its stock currency to pick up some small players who are really cheap," she says.

WaveSmith's success reflects the importance of the multiservice edge. Carriers appear to be favoring a model that collects multiple types of traffic at the edge and transports them across a single IP/MPLS core. Major equipment vendors have tailored their product lines to this model, and some are beefing up their emphasis on edge boxes. Juniper Networks Inc.'s (Nasdaq: JNPR) recent M320 announcement targets the edge; and Nortel Networks Corp. (NYSE/Toronto: NT) is said to be preparing an edge router called Neptune (see Juniper Hatches the M320 and Nortel's Soft Sell).

A lingering question is how Lucent Technologies Inc. (NYSE: LU) will respond in the multiservice market. Lucent built the network that Ciena is now expanding, and its lack of a multiservice edge product helped WaveSmith get in the door, Ciena's Sullivan says.

"The headline we would write is that the Lucent customers are not going to be willing to wait," he wryly notes.

Lucent is expected to announced a next-generation multiservice edge switch, the CBX3500, soon. Light Reading is assiduously collecting the details this very moment for a report tomorrow (stay tuned). Lucent did not immediately return a call for comment.

Other players in the multiservice edge mix include Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Cisco Systems Inc. (Nasdaq: CSCO), Laurel Networks Inc., and Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA). (See Laurel Steps Up on the Edge and Tellabs Sharpens Its Edge.)

— Craig Matsumoto, Senior Editor, Light Reading
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alchemy 12/5/2012 | 2:19:34 AM
re: Ciena Seals Verizon Deal ATMRules writes:
"IP will never have the QoS of ATM"

Yeah, but MPLS does a pretty fair job of re-inventing ATM QoS. Far better queuing model than DiffServ and the TOS field in the IP header.
ATMRules 12/5/2012 | 2:19:34 AM
re: Ciena Seals Verizon Deal I can't wait to see that the deal is with this CBX3500...Let me guess..... it supports ATM and Frame Relay, IP/MPLS along with some kind of GE play and it's small and cute and it work's great on our Award winning Naviscore platform along with our great technical support team, boy oh boy you just can't go wrong......and it's guranteed not to blow up your network ala WorldCom MCI OSPF fiasco...I'll stop here...

In case you're wondering, I did get laid off from Lucent...

ATMRules.........................

"IP will never have the QoS of ATM"



ATM Rules
Tess 12/5/2012 | 2:19:26 AM
re: Ciena Seals Verizon Deal "IP will never have the QoS of ATM"

ATM will never have the QoS of DTM
Savvis will walk away from ATM to DTM and many more to come

http://rds.yahoo.com/S=2766679...
sevenbrooks 12/5/2012 | 2:19:25 AM
re: Ciena Seals Verizon Deal
Didn't the company that did DTM go out of business a couple years ago?

seven
Tess 12/5/2012 | 2:19:21 AM
re: Ciena Seals Verizon Deal You mean Dynarc!

they only had a little part of DTM (without video QoS)

MARCH 02, 2004
PREVIOUS NEWS WIRE FEED

Net Insight Wins TV Contract
http://www.lightreading.com/do...


Net InsightGнs patent portfolio currently
comprises a good 30 patent families, each of which includes
patents or patent applications in one or more countries.
truelight 12/5/2012 | 2:19:20 AM
re: Ciena Seals Verizon Deal

Sure get real man....DTM is long dead.


------------------------------------------
You mean Dynarc!

they only had a little part of DTM (without video QoS)

MARCH 02, 2004
PREVIOUS NEWS WIRE FEED

Net Insight Wins TV Contract
http://www.lightreading.com/do...


Net InsightGнs patent portfolio currently
comprises a good 30 patent families, each of which includes
patents or patent applications in one or more countries.
Tess 12/5/2012 | 2:19:15 AM
re: Ciena Seals Verizon Deal shore!

that-存 wy they took this deal(WDR) in strong competition
/28/2004
Net Insight delivers 14-cities media network to GermanyGнs largest broadcaster
http://www.netinsight.se/news....

Here we talking 100% QoS

and that-存 wy Savvis going for DTM

and that-存 wy Eurovision Broadcasting Union going DTM

and that-存 wy Corvis (broadwing) going DTM

and that-存 wy EBU right now maked a deal with Broadwing

and thats wy the best Triple play networks running over DTM in US

You want more?

DTM is dead for shore!! ASK ERICSSON



truelight 12/5/2012 | 2:19:14 AM
re: Ciena Seals Verizon Deal Sure who are the NA customers. This is a lost technology with no NA presence and suppport only the wired Europe wins.

BTW : CORVIS: LOL

DTM: Dateless Technology Mumbo

Tess 12/5/2012 | 2:19:13 AM
re: Ciena Seals Verizon Deal And That-存 wy

Seachange say:

YesterdayGнs announcement showed that all the elements can be brought together into an attractive
technological offering for the telecommunications industry, said Lai.
GラNet Insight is a network provider that has started to address some of the issues in quality of service in IP
networks that have not been addressed in the past,Gル he explained. GラYou have a problem with end-to-end QoS
in IP networks.Gル
On the other hand, Asynchronous Transfer Mode [ATM] networks are extremely reliable and are heavily
used by telcos for voice and data transport Gラbut the ability to get a large-scale cost-effective solution in ATM
for video is not possibleGル said Lai. Thus, for video and VOD, telcos are Gラlooking at moving heavily towards
and all-IP network.Gル
SeaChange, Lai said, understands IP video transport.

http://www.schange.com/News_ev...

truelight 12/5/2012 | 2:19:13 AM
re: Ciena Seals Verizon Deal But really what a company. Run by a lot of 'non-proven folks" that manage to get lucky. Lightera product aside would they be anything to do without the bubble ?

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