Ciena Seeks R-E-S-P-E-C-T

Ciena Corp. (Nasdaq: CIEN) has been running plays right out of Cisco Systems Inc.'s (Nasdaq: CSCO) playbook, but that isn't winning it points on Wall Street.

Like Cisco, Ciena has been buying startups, investing in startups, and trying to get into new areas, rather than hack away at its business while leaving large markets behind.

But Wall Street still casts a skeptical eye, as evident in UBS Investment Research's downgrade of Ciena's shares on Friday.

In his note, analyst Nikos Theodosopoulos points out that Ciena has a long and somewhat muddy road to profitability. "We do not expect the company to become profitable until FY06 at the earliest, even if we consider significant revenue upside from potential contract wins," he writes.

Ciena hasn't said when it will break even, but it has tried to show it's got the right strategy.

In fiscal 2001, nearly 80 percent of Ciena's revenues came from long-haul optical transport.

Since March 2001, the company has spent about $1.6 billion to acquire companies in the storage-over-Sonet, multiservice edge switching, Sonet transport, and metro DWDM markets (see Ciena Completes Akara Buy, Ciena, ONI to Merge for $900M, and Ciena to Acquire WaveSmith).

The result? For fiscal 2003, Ciena's revenues from core products only made up about 41 percent of its total sales. Meanwhile, its metro networking revenues made up 36 percent of sales.

The company's gross margins, however, have been an up-and-down story. Gross margins are a tough thing to predict in telecom equipment anyway. The sale of an initial chassis likely won't command the same margins as the cards and components that plug into the chassis later.

But in Ciena's case, some chunk of the company's anticipated revenues in 2004 will come from its margin-depressed long-haul business. Ciena has said it would take margins in the range of 40 percent to help it get to profitability. For the past three quarters, Ciena's margins have been in the high 20 percent to 30 percent range.

Ciena hasn't been shy about charging toward gear that delivers Ethernet and other data services. "The optical market itself... is basically flat," says Ciena spokesman Denny Bilter. "It's not growing."

Contrast that with Cisco, which intends to make the optical market a billion dollar business at some point (see Cisco's Billion Dollar Plays ).

Some have said Ciena's name is missing from some upcoming metro DWDM RFPs from SBC Communications Inc. (NYSE: SBC) and Verizon Communications Inc. (NYSE: VZ), suggesting the vendor is losing its edge in the optical business at the expense of the new markets it's chasing. Ciena won't discuss specific RFPs, but denies the rumor's premise. "Our foot is not off the accelerator in the metro DWDM space," Bilter says.

So where does this leave Ciena on Wall Street? Perhaps it is seen as one of those companies that will lose a few races, but finish – and perhaps place highly -- in the marathon.

Ciena shares have lost about 11 percent of their value in the past three months. And last week it announced improved revenues, but it still missed analysts' predictions Ciena Dampens Outlook Hopes).

"While we agree with Ciena’s strategy, we don’t necessarily see Ciena’s stock as a compelling investment," writes Sam Wilson, an analyst at JMP Securities, in a research note on Friday.

— Phil Harvey, Senior Editor, Light Reading

erbiumfiber 12/4/2012 | 11:08:44 PM
re: Ciena Seeks R-E-S-P-E-C-T Solar Sailor wrote:
>>Ask around at Ciena what &#8220;IP&#8221; stands for, you&#8217;re more likely to get an answer of &#8220;Intellectual Property&#8221;.<<

Yup, because I never saw a company that seems to enjoy patent litigation as much as Ciena(and all the millions of dollars that go down the drain with it...). Look at some of the legal costs associated with recent litigations (the Nortel settlement, for example, in the ONI litigation) and you'll see that it's not helping the bottom line...

lietreading 12/4/2012 | 11:08:49 PM
re: Ciena Seeks R-E-S-P-E-C-T Ciena will succeed because:

1. The CFO used to manufacture Bras.
2. They employ only yes men at the top
3. They employ a lot of yes men at the top.
4. Nothing happens without hours of
discussion between legal and the customer.
5. Nothing happens without hours of
discussion with legal.
6. Nothing happens without approval from one man
in Sales operations.
7. They would rather make the legal department happy instead of the customer.
8.They have $1Billion in the bank.
9. They can't see the difference between the needs of the Interexchange carriers, and the
10. Upper management is the investor behind the VCs in the companies they keep buying.(In other words they recoup their money in the failing startup by buying the company with Ciena money)
11. They would rather see that upper management gets their stock options at the same time they
withold stock option from the employee purchase plan.
12.Mr.Smith wants to be knighted in England his
home country.(and everyone thinks the problem is
jobs going to India!)
10.There are movements afoot on the above subject
through an old ONI relationship at BT.
11. They will eventually take the company private
and skim off the money because of, and in order to make these things possible.
zillionaire 12/4/2012 | 11:08:51 PM
re: Ciena Seeks R-E-S-P-E-C-T Cyber Techy:

The Wavesmith folks are good people. That being said, who knows how long it will be before Ciena says "we can do it better" and pulls the plug. Keeping the people in Linthicum busy is priority number one - even at the expense of those who created the products that keep ciena afloat today.
ATMRules 12/4/2012 | 11:08:52 PM
re: Ciena Seeks R-E-S-P-E-C-T Well, I guess your current job is not eligible for transfer to India? If not then brilliant decision....Merry Xmas!!!!!!!!!!
ATMRules 12/4/2012 | 11:08:52 PM
re: Ciena Seeks R-E-S-P-E-C-T Equipe = Economics 101 - No Customers = No Revenue = no more investment $$$ = Another RT 495 boatanchor...IronBridge Networks, Ennovate, Crescent Networks, Gotham Networks, Celox Networks, Cratos Networks,Tenor Networks ...you get the picture....after all 9 out of 10 startups in any business usually fail....
zillionaire 12/4/2012 | 11:08:53 PM
re: Ciena Seeks R-E-S-P-E-C-T they may go that long with the skeleton crew they have left. They have little chance of landing any orders.
cyber_techy 12/4/2012 | 11:08:53 PM
re: Ciena Seeks R-E-S-P-E-C-T I was contacted by a recruiter regarding a Wavesmith Ciena job and didn't bother to go for an interview. after reading the comments, it seems to be the right decision (not that they would have hired me anyway).

The rationale was that even if the product does good, as soon as it's a GA quality, it will be sent to India to rot in Bangalore. So why risk my current job.
ATMRules 12/4/2012 | 11:08:57 PM
re: Ciena Seeks R-E-S-P-E-C-T Yep, Equipe is still around, rumor on the street is they have enough payroll left until Memorial Day....
big_deahl 12/4/2012 | 11:08:57 PM
re: Ciena Seeks R-E-S-P-E-C-T SolarSailor:

Good summary. One more to add to your list - the Equiipe investment. Are they still around?

SolarSailor 12/4/2012 | 11:09:08 PM
re: Ciena Seeks R-E-S-P-E-C-T Ok, so lets get specific then shall we, lets start with easy problems, the ProductsG«™

o The Lightera acquisition G«Ű sure, they had some early success with the Core Director. But look at where they are now, they completely squandered their lead. The issue of course is that they had no clue (and no vision) to go after the RBOC/PTT space from the beginning. Sure the Core Director now has some field proven signaling and routing capability, but in the optical core, is this really a necessity? Which service provider in their right mind is going to pay a 50%-100% premium over a traditional solution for a G«£luxuryG«• product?

What about AT&T you say, well do you know if they actually made any money selling to AT&T?

What about opex you say? Opex is an issue people talk about during the bad times, Service providers are always more interested in improving their topline, not focusing on their bottomline.

For years Ciena messed around with useless incremental features on the Core Director, today they donG«÷t even have Ethernet on that box! What topline?!

o The Cyras acquisition G«Ű what a joke. Everyone on Wall Street knows the story, Smith & folks got taken for a ride big time (I suspect Ciena has since learned the phrase G«£due diligenceG«•).

Industry leading product on a paper at the time, but one that was acquired at least 2 years before being ready for real deployment, and with an early 1990s cost and price points! i.e. un-sellable.

What surprised me more is that not one person at Ciena who made that decision was castrated for the blunder. Instead, they took it out on the poor Cyras people, even the very few bringing in revenue for crying out loud! G«ˇNuff said.

o The ONI acquisition G«Ű lets face it, it was 18-24 months too late. When they acquired ONI, the Metro DWDM market had already started to take a nose dive. Their own Metro platform was extremely long-in-the-tooth, their next-gen stuff was Years away, buying ONI was the only way to stay in a market they were supposed to be leaders in, so, the ONI acquisition made sense from a technical standpoint, not necessarily from a commercial one G«Ű end result, theyG«÷re left holding-the-bag with an expensive portfolio and only 1 selling product which they have to sell a truck load of before they can make any money.

o The WaveSmith acquisition G«Ű everyone knows that acquisition had more to do with SBC prodding them then any vision on CienaG«÷s part. Until that point in time, Ciena had no clue how much money was being spent by Service Providers in the data space. With the WaveSmith acquisition suddenly came G«£the visionG«• to venture into layers 2/3 and above, never mind theyG«÷re a decade late coming to the party.

o The Luminous investment G«Ű I still canG«÷t stop laughing at this one. Looks to me like Ciena likes being taken for a ride (ok, so maybe they Still donG«÷t know what G«£due diligenceG«• means).

o The Laurel investment G«Ű For a change something a little smarter. Obviously driven by the one or two bright individuals left in the company who knows something about layers 2, 3 and above (you-know-who-you-are).

However, Ciena doesnG«÷t have the resources nor anyone that knows how to sell this thing, not the CTOG«÷s team, definitely not the Marketing team, and most certainly not Sales, and its not a skill set you can pick-up overnight.

Ask around at Ciena what G«£IPG«• stands for, youG«÷re more likely to get an answer of G«£Intellectual PropertyG«•.

And I havenG«÷t even started on the People problems. looks like someone beat me to naming namesG«™
SolarSailor 12/4/2012 | 11:09:09 PM
re: Ciena Seeks R-E-S-P-E-C-T > I've been hearing SolarSailor's argument a lot
> the last year or two, particularly from people
> ()or people with connections to people) at
> lower echelons of Ciena

Its not only the lower echelons. Most of the executives are aware of the problems.

As an example, one big issue is that no one dares to deliver any bad news to G.Smith - hes built an atmosphere of perpetuating only good news within the company, as opposed to whats real, and lots of internal spin-doctoring, mostly from marketing.

The result is people jockeying for position trying to take credit for any piece of good news they can then deliver to Smith.

Look at the business operations group, touting themselves as deal closers - I donG«÷t know of any company other than Ciena where the sales guy gets less respect than the business operations guy.

Go on, tell me I'm wrong.

> I dond't know what to believe. All I can point
> out is that, many of the things you complain
> about them doing (killing K2, cutting R&D)
> are things that Wall Street is claiming they
> did not do quickly/far enough!

Yes, but they got into the mess by themselves in the first place.

> And claiming the product cycle of Wavesmith
> was supposedly too long, as a poor reflection
> on Ciena, is pretty disengenuous, don't you
> think?

YouG«÷re completely overlooking the main point.

The product is 2 years too late to the game, and yet Ciena decided to go out and buy them. Its not a bad product, IG«÷m sure its good at what it does, but the market has moved on, and they figured out too late. Why else do you think Ciena needed to invest in Laurel barely six months after buying WS? Obviously it was an opportunistic acquisition, but I fully expect the ROI on this acquistion to start looking like ONI before long.

> Ciena is hardly the first tech company whose
> engineers have surmised that the suits are
> f-ing everythign up!

What San Jose engineers? Do you know something you wanna tell us?
zillionaire 12/4/2012 | 11:09:09 PM
re: Ciena Seeks R-E-S-P-E-C-T that plant manager must have his pilots license - I think that gets put into the yearly goals of all directly reporting to that VP.
opsguy 12/4/2012 | 11:09:12 PM
re: Ciena Seeks R-E-S-P-E-C-T LOL! Well I admit that, yes, there are still areas like that but not half as much as there use to be.

On the subject of Plant Managers, I really had to laugh out aloud, I only know one so I can't speak of others, and he is REALLY incompetant. The only reason he is not gone is thats he's close to his vp boss, in more ways than one.

Again, my problem isn't with any particular group or person. When compared to others, Ciena just doesn't get it! I don't know why Executive Management doesn't know this and if they do why they won't do something about it. I can tell you this, ANY ONE of the SVP's, Dir's and Mgrs can spin their need for the staff they have and nobody in executive mgmt can challenge because they REALLY don't know how things get done. They aren't stupid, they just don't know.

zillionaire 12/4/2012 | 11:09:12 PM
re: Ciena Seeks R-E-S-P-E-C-T opsguy:

what do you mean
"there was a time when CIEN even had Directors reporting to Senior Directors and Senior managers reporting to them and so forth"?

That is not past tense - it is the way they operate TODAY. Don't even bring up the "Plant Managers"... thats a whole other can of worms
corvisalum 12/4/2012 | 11:09:13 PM
re: Ciena Seeks R-E-S-P-E-C-T opsguy

you say they have too many people. how about too many senior vice presidents - look at this partial list (grouped to make a point):

strategy & business development:
steve chaddick svp& chief strategy officer
james collier svp, corporate development
elizabeth perry svp, business development
thomas mock svp, strategic planning

question: who does what? what does the cso do if not strategic planning? oh, that's the job of the svp strategic planning (the cso is an officer, he can't possibly plan or be engaged in corporate or business development!) :-)

and, if i may be so bold, what is the difference between corporate development and business development? hmm, one looks corporate, while the other wears business suits? i am lost. :-o

now for a quick look at p&l:
edward ogonek svp & gm, metro/enterprise
robert o'neil svp & gm, data networking
pamela adams svp core networking
dawn hogh svp, product line management

now for some analysis: the gm is obviously responsible for p&l, right? why is one of the svp's not a gm? oh, wait, I see - there is an svp for product line management, who must be responsible for p&l. But, no, that can't be true, given that we have two gm's handling their own p&l. darn, i am confused again :-(

well, i just hope the insiders (especially the ceo & board of directors) know exactly who is responsible for what since if, God forbid, something goes wrong, we do want to know where to point the fingers!

enough sarcasm before the holidays - enjoy your time with your families

opsguy 12/4/2012 | 11:09:13 PM
re: Ciena Seeks R-E-S-P-E-C-T corvisalum

I won't quibble with what you have to say, all are good points. I think maybe I wasn't very clear about what I was trying to say, which is; I think (not feel) Ciena needs to get MUCH leaner in ALL areas and all ranks compared to other companies in its market-type space, in this instance telecom. I mean, the comparison to Juniper should have been enough to convince ANYONE with half a brain (I can tell you a few SVP's on your list might qualify. Bad joke, I know)that there is an issue here. I mean, didn't some analyst from Morgan Stanley just come out and say they need to cut more?!

I only pointed out 3 groups because they really are the "execution groups", all the others are support functions.

One other thing that might get your hair up, there was a time when CIEN even had Directors reporting to Senior Directors and Senior managers reporting to them and so forth. It is just unbelievable!

Anyway, hope I've clarified myself and that you and others have a Merry Christmas and a Happy New Year. Sorry, I don't do that whole "Holidays" thing...

puddnhead_wilson 12/4/2012 | 11:09:15 PM
re: Ciena Seeks R-E-S-P-E-C-T I've been hearing SolarSailor's argument a lot the last year or two, particularly from people ()or people with connections to people) at lower echelons of Ciena.

I dond't know what to believe. All I can point out is that, many of the things you complain about them doing (killing K2, cutting R&D) are things that Wall Street is claiming they did not do quickly/far enough! And claiming the product cycle of Wavesmith was supposedly too long, as a poor reflection on Ciena, is pretty disengenuous, don't you think?

Finally, while I value their opinions & insight greatly, I think one has to take the insights of engineers in San Jose (e.g.) into the motives and performance of mgmt and sales in Linthicum with a very large grain of salt. Ciena is hardly the first tech company whose engineers have surmised that the suits are f-ing everythign up! This view invariably gains credence when the chips are down ...
opsguy 12/4/2012 | 11:09:20 PM
re: Ciena Seeks R-E-S-P-E-C-T I agreed with you on everything until you got to the understaffing issues.
If by chance you are saying that, for instance, the sales staff is understaffed then this would indicate to me two possible issues: 1.) Too many customers, and not enough Sales support. A highly unlikely issue at best given the current state of revenue and industry-wide lay-offs or 2.) Sheer incompetance on the executive staff. Anyone who has worked at a public company know the Sales staff is treated VERY well because they bring home the money, so I think neither is the case here, although some can make a case for Executive incompetance in other areas of Ciena.

Next is Engineering. Ciena is not understaffed in Engineering, period. 300+ just on the West Coast alone and not much "new" product coming out recently.

Operations. This is where you might say that execution might be the problem, but I'm only guessing. Ciena's habit is to acquire a company and almost immediately RIF 75% of the ops department. This is before they have had the chance to really even learn about the product. With Ciena's big acquisition products, Core, ONLINE and K2 just about everything was fully out-sourced, including assembly, test, QA and purchasing prior to acquisition. This was REALLY foreign to some groups in Ciena and they fight like cats and dogs to do things in-house in Linthicum so they can justify they're payrolls. For instance, to this day they won't let any CM's take on the responsibility of buying high cost optics even though they're commodities. Why?

Last point. If Ciena is making 70+ million with 1800+ employees then why were some of they're acquisitions making 60+ million with just 800+ or better still Juniper, which makes 1000's of boxes a year have only 1500+ employees with quarterly revs almost double that of Ciena? It's not because they build the boxes in-house.

I guess my main point is, its not entirely execution thats effecting the bottom line, rather a major portion, in my belief is excess manpower at all levels, among other things. JMHO

Sorry this was so long.
justenuff 12/4/2012 | 11:09:30 PM
re: Ciena Seeks R-E-S-P-E-C-T SolarSailor,
You definitely hit on some good points. However, I can also add to some of your comments. But, let's try a different perspective on one product you mention: ONLINE2500 (aka, ONLINE Edge)

This box is being sold, however, its EF&I and support costs eat up the little margin there is in the product. The original idea for this box was dead on. However, too many features were crammed into this box too quickly. What you have is a very touchy system that should be realtively easy to set up. When CIENA sends one person out to install or upgrade a unit, the margins are gone. Also, CIENA would have to sell thousands of these boxes to make a dent into their total revenue dollars. The sad thing for the people left at CIENA is that management continues to feed them "balloney" in that the ONLINE 2500 will be a big winner for them in the future. CIENA continued ONI's trend of including premium features into a system and then the sales are left banging on product management because the price is too high and customers are not looking for premium features.

There are some good people left there, but unfortunately, management is continuing to pile work on all understaffed departments. If the CEO can step down from his ivory tower, then he could maybe build the business with the resources they have left.

In short (I know, this is a long message), CIENA's fundamental problem is execution. Their strategy to include more and more products will fail because they do not have the infrastructure to exectute.

for what it is worth,
corvisalum 12/4/2012 | 11:09:34 PM
re: Ciena Seeks R-E-S-P-E-C-T Solar Sailor and erbiumfiber:

You guys are on the money - to summarize (with my 2 cents added):

1) L0 and L1 is where their expertise lies.
2) Old diehards still control the decision making in the company.
3) Old diehards dont know jack about L1,L2.
4) L0/L1 can make them money - they have lost their focus.
5) ONI portfolio (except 2500) is dead.

opticalPassion 12/4/2012 | 11:09:35 PM
re: Ciena Seeks R-E-S-P-E-C-T Dear SolarSailor,

Your post is the only good article that i have seen so far about Ciena. It really exposes the root problem with Ciena - the People problem. I can not agree with you anymore. Ciena's problem is deeply rooted in its own top and middle management level (exec, vp and dirs). I have never seen in the industry that a company has so many useless VPs and directors, and most of them are JUST interested in powers, and have NO - absolutely no, clues on what to do, not to mention what the technologies mean to them.

The worse things is that Ciena can not get rid these guys. They are rooted there, with personal relations, and political alliances.

With almost impossible to breakeven or profitable, i feel sad for Ciena - a company quickly becomes a history - a falling history.
hiflier 12/4/2012 | 11:09:37 PM
re: Ciena Seeks R-E-S-P-E-C-T This post is right on. The revolving door in sales and marketing is becase they have Gary Smith running things who only got his job by brown nosing Pat. He hires and fires a series of sales pukes until he finally promotes Mike McCarthy the Corporate Lawyer to head of sales even though Mike never had ANY bag carrying experience - the sales force LOVED that move. In any event, Ciena has a history of making life difficult for anyone that tries to leave by sueing them over non-compete clause they bury in their confidentiality document. Therefore they have a workforce of disgruntled employees who will work until the billion in cash is gone. The Board, like most Boards, is asleep - although they did force Gary to get rid of his buddy McCarthy. Gary just likes to try to get on CNBC a little too much.
lightmaster 12/4/2012 | 11:09:39 PM
re: Ciena Seeks R-E-S-P-E-C-T Erbiumfiber,

Rumor was that Cisco tried to buy Ciena in the early days...multiple times. Trouble is that Ciena thought that they would some day be Cisco's equvalent and said "no thanks."

However, I don't think it's fair to say that Ciena was just "lucky." Timing does involve luck, but they had a great product at the right time. THe issue has been a lack of understandig of how to grow the company beyond that success and the success of the early success of the CoreDirector. The revolving doors in the sales and marketing VP positions haven't helped.

startup_shutup 12/4/2012 | 11:09:40 PM
re: Ciena Seeks R-E-S-P-E-C-T In other words CIEN is POS. Why people do not get
this simple truth??
erbiumfiber 12/4/2012 | 11:09:40 PM
re: Ciena Seeks R-E-S-P-E-C-T Solar Sailor wrote:
>>The basic problem is that Ciena became too successful too quickly in the early '90s virtually by accident. From that point, its been stumbling along again by accident, one step forward, two steps back.<<

Amen. That's the first post I've seen that got it right. Sprint was desperate and willing to give a start-up a chance. Ciena was in the right place at the right time. After that, well...
I always figured they would have been acquired by now but I guess it's too late at this point...on the Yahoo message board the rumor of the day, every day, was that they would be aquired by Cisco (apparently no credible source for this rumor). Then Cisco acquired Pirelli (which was licensed under much of the Ciena IP when the Pirelli v. Ciena litigation ended) which put a stop to the rumor for a while. I always figured that management was having too much fun to let themselves be acquired, but I'd love to know the real story (I only know the early chapters...).

Anyway, I really enjoyed your post- it sounds like you have a realistic handle on the situation.

SolarSailor 12/4/2012 | 11:09:41 PM
re: Ciena Seeks R-E-S-P-E-C-T In the larger scheme of things, Ciena will fail not because of its products or of its vision, but because the fundamental problem at Ciena is People - specifically the ones who run the show, and the upper/middle management who has no clue about whats important, i.e. the customer, and are too busy jockeying for position.

The analyst can merely see a trend, but its the insiders that have a clear view of the problems. And I can tell you the insiders are screaming bloody murder.

The basic problem is that Ciena became too successful too quickly in the early '90s virtually by accident. From that point, its been stumbling along again by accident, one step forward, two steps back.

Today, the company has completely lost focus. Trying to venture above layer 0 with absolutely no resources that have any clue whatsoever about layers 2, 3, and above. Lots of infighting. Management who don't believe in the vision. A vision that cannot be executed upon because they have no knowledgable people. An impotent marketing team led extremely poor market experience. A completely fractured product management team led by people with no clue of how the hell they're going to tie things together. An R&D budget thats ever dimishing. Products that have been axed, ala K2. Products that aren't selling anything worth their weigth, ala CoreDirector. Products that are basically vapourware, ala WavelengthDirector. Products that are years too late, ala WaveSmith.

I dare say if Ciena hadn't acquired ONI, they'd be virtually defunct today, ontop of which the ONI products themselves are showing their age. About the only product that is selling is the ONLINE 2500 which is basically an enterprise box.

When the market recovers, I expect to see a major exodus out of Ciena by the few good people left there who can't wait to get the hell out.

The problems at Ciena are insurmountable, Wallsteet's beginning to see it. If anything, they'll continue to stumble along by accident, carried by the tide and cash.
zillionaire 12/4/2012 | 11:09:51 PM
re: Ciena Seeks R-E-S-P-E-C-T Was in, have moved on to a more stable industry.

If you think people being out of work is laughable, I feel sorry for you. Being competitive and happy with a companies success is a normal thing. Gloating about a companies demise or about a companies reduction in force is cruel. Every company that has closed was staffed with hard working, caring people who believed in a product. Why people sit and wait for the bad news to be posted and say "that product sucked" or "that ceo or cto was a joke and they never had a chance" is beyond me. Thats what this board has decayed into. Even when companies land a deal or get acquired (which should be good news) tons of self righteous, omnipotent minded engineers who think the world revolves around them, can't wait to tear it down. I defy you to find a message string where the overwhelming majority of posts do anything but bash and discredit.

What I find most interesting is that everyone in Telecom knows everything about the entire industry.

I used to come on here just to get a chuckle over all the bashing - what is clear is that this board is a good representation of the typical moral across telecom in general. Why hate going to work...life is to short.
solver 12/4/2012 | 11:09:52 PM
re: Ciena Seeks R-E-S-P-E-C-T zillionaire,
Geez, for someone that was promoting peace, you've got a lot of venom spill.
Wait, you are an outsider to the telecom industry and have nothing to do with it? If so, I would advise you to not post any ill-informed opinions here.

It's always interesting to hear 2 different companies debate about their market success, or the lack thereof. I thought the arguments were boastful but informative. If you don't understand it or don't want to see it, go surf somewhere else.

Having the last laugh is the same thing as market competition. A few winners, and whole lot of losers. Doesn't matter what business you are in, it's the brutal reality.

I have a lot of sympathy for those that are out of a job. Heck, I can't count the number of friends that have been impacted. But, when people flooded into the market, you should know there had to be an end to the party. It's unfortunate, but the industry needs consolidation before it can get better.

BTW, that's "laid" not "layed". Maybe you are not familiar with that term. And I have no idea what you are talking about in your last paragraph. Sounds like you are one sick narrow-minded puppy though.
zillionaire 12/4/2012 | 11:09:52 PM
re: Ciena Seeks R-E-S-P-E-C-T solver - thats the problem with all you scumbag telecom guys. Your idea of "last laugh" is rejoicing in others failures. How can there be a last laugh when 10's of thousands of you have been layed off???? I think the last laugh is being had by anyone outside of telecom who reads these posts and thinks "what a bunch of losers".
I'm sure you'll be at the next star trek convention taking a class to learn how to speak Klingon. Take your hand on that dream romantic getaway you've been promising it. Maybe buy some tissues with aloe for a change.
solver 12/4/2012 | 11:09:59 PM
re: Ciena Seeks R-E-S-P-E-C-T zillionaire, maybe you should place your dime on who will get the last laugh. We need more spirited debates, as long as it doesn't turn into yahoo board.
zillionaire 12/4/2012 | 11:10:00 PM
re: Ciena Seeks R-E-S-P-E-C-T Ladies, ladies

the tampon machine is in the lavatory...I will lend you both a dime.
waverunner 12/4/2012 | 11:10:01 PM
re: Ciena Seeks R-E-S-P-E-C-T lilcraptsby,

What color is the crap in your world, red and white? It just keeps on spew'n doesn't it...

The problem with you claims is that they are backed by the same red & white stuff aformentioned. Unfortunately for you, I will be the avenger of your spew...

NT sold 90% of its 10 billion revenue last fiscal in the U.S. and abroad (verfiable financials). Are you calling this Gov't backing? Bonds, equity are held by non-gov't funds, smart enough to keep the tax dollar away from it, all verifiable.

LH products, how do you define an offering? How about this whatever a client can buy from NT for its LH space is a LH product! Clear enough. Mr. Client you can buy the following: 1)HDX 2)LHDT 3) OM6500 4) 1600G 5)LH1600 6) LH4000. All verifiable.

Headcount: your not to weighty rebuttal on my claim, only reinforces Ciena's less than complete LH development team, three guys waiting for projects to get commitment, they might as well have these guys write the M&A press releases, at least they could claim some involvement in those products.

Press releases: does this even require an answer, can you list for me Ciena's achievements of late other than getting punted out of the NSDQ100 or Nick T's downgrade. Chart the stock lately, now chart NT's.

The public good has been restored, you can all sleep well tonight, move along nothing to see here. Until next time I am the avenger of spew, I bid you good night.

lilgatsby 12/4/2012 | 11:10:02 PM
re: Ciena Seeks R-E-S-P-E-C-T waverunner, (1) you are an idiot.

(2) Last time I checked NT was the only company propped up by a Govt support structure and not sales.

(3) WS is not a 5200 comparable product and I never said it was. Again, see #1.

(4) Long-haul looks like 1600G to me. Where are the other five systems, Einstein? I'm not talking entire product line, maybe you should read before posting.

(5) Don't try to talk about headcount, you know nothing and NT has wacked more people than any company in our industry outside of LU.

NT hasn't had many/any stellar press releases lately, sport. Of course Rice Belt Telephone swapping a few Class 5's was pretty big news for NT these days...Maybe they're the ones in need of momentum.

waverunner 12/4/2012 | 11:10:06 PM
re: Ciena Seeks R-E-S-P-E-C-T lilgatsby, are you hopeing your posts will garner up some Ciena momentum, no one believes your crap...

"NT Fires R&D": Ciena is down to three designers on the optical (Corestream/Wavesmith) and one is a technician. Fact.

"NT down to one LH line": Let's see I counted 6 sellable products, all verifiable.

"Wavesmith vs. 5200 at SBC": Hmmm...NT has 99% share of storage over optics, Ciena's WS? If someone could attempt to even position this ugly beast. Dino? Have you even taken the time to compare the two platforms before you spew your FUD?

" It'll get worse...": With what? Akara? This is an ILEC not Big Bank Citi!

"These things happen when one company fires employees...": See my first point.

lilgatsby 12/4/2012 | 11:10:06 PM
re: Ciena Seeks R-E-S-P-E-C-T fanfare, thank you. I'm guessing you are referring to some of the great corv debates. I don't view my position as polarized...I am simply often the one not willing to go along with the corv investors that proclaim to know the technical and operational ins and outs of the long-haul market because they have a business degree from the Talahassee Jr. College of Business.

fanfare 12/4/2012 | 11:10:07 PM
re: Ciena Seeks R-E-S-P-E-C-T That was a lucid, well thought out, unbiased post.

I agree completely. What I don't understand is, why does your position on other issues exhibit such a polarized perspective?


corvisalum 12/4/2012 | 11:10:07 PM
re: Ciena Seeks R-E-S-P-E-C-T CIEN does emulate CSCO in a lot of respects. They will not win any large RBOC contracts either.

If CIEN is so hot on RBOCs, how come all we hear from the RBOCs is that the ONI portfolio is dead and CIEN has nothing?

I would watch out for one of the larger players to swoop in on the upcoming RFPs, leaving CIEN in the dust. They have lost direction - distracted by that L2/L3 koolaid (another CSCO lead that they wish to follow), when the big bucks still remain in L0, L1.

Maybe they will get into the services business next! Is this another CORV waiting to happen?

lilgatsby 12/4/2012 | 11:10:08 PM
re: Ciena Seeks R-E-S-P-E-C-T Steeler, it doesn't take much time from my busy day to set you straight, I look at it as community service. Although it's likely at least one product line has been cut by NT in the time it took you to write your last response.

NT does have enough cash to cover its enormous debts, barely. CIEN has about $1B cash AFTER covering debts, not a bad position to be in. NT is down to one long-haul line with both Mor systems biting it. Optical seems to be a losing proposition for them these days aside from their dino-5200 which is in bad need of an overhaul. Funny you should mention wavesmith and NT owning SBC...guess that grip has loosened, it'll get worse champ. These things happen when one company fires employees and slashes R&D for 18 months while another develops...hold on to your free NT coffee mug, it'll be worth more than your stock soon again.

Steeler 12/4/2012 | 11:10:12 PM
re: Ciena Seeks R-E-S-P-E-C-T Lilgatsby, glad to see Ciena employees still spend more time posting on LR message boards than meeting with customers. Your company has $700 million of its own debt, I wouldnt knock your competitors' balance sheets with your burn rate. Funny you should mention SBC, because for every dollar they spend on the wavesmith boxes, they spend about a 100 on OPTera.

Sorry all the shorts are killing the value of your employee options, perhaps you should go work for someone else.
lilgatsby 12/4/2012 | 11:10:13 PM
re: Ciena Seeks R-E-S-P-E-C-T Buzzzzz, again wrong my financial, non-industry-wise friend.

LU and NT have enough debt to bankrupt most middle east countries. Don't let a Qtr above the water-line send you skipping to the bank just yet. These guys are going to slash and burn more product lines, pension funds and employees in the next 12 months just to keep somewhat respectable.

Have you really ever been to a lab since 2000? No start-ups in the labs these days, Mr. Wizard.

I'm sorry you were sidetracked by the mention of labs...how about AT&T being arguably their largest CoreDirector deployment, oh did you say Sprint...how many product lines have been deployed there over the last 9 years, ever hear of SBC, how about a tiny company called Telmex...I could go on, but I hope you get it.

You want to talk long and short strategies, fine. But there is no need to bash a company and make unfounded comparisons based on these financial strategies...the two don't jive and neither does your argument, sport.

Iipoed 12/4/2012 | 11:10:14 PM
re: Ciena Seeks R-E-S-P-E-C-T Those who can't engineer - sell
those who can't sell- market

And those that can't ---become consultants
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sevenbrooks 12/4/2012 | 11:10:15 PM
re: Ciena Seeks R-E-S-P-E-C-T
LU's reported profit came from pension funds. LR published an article on that a few days after the 3Q numbers for LU were announced.

So, this does not mean that LU is in a state of sustainable profitability.

Steeler 12/4/2012 | 11:10:16 PM
re: Ciena Seeks R-E-S-P-E-C-T LU and NT have at least broken-even, CIEN would need to lay off over half of its existing headcount in order to turn a profit. LU and NT have been mismanaged, but their ties to the RBOCs, AT&T, and Sprint are so strong, fools like McGinn and Roth could not break them.

Also can't believe you're talking up being in the labs!!! You ever been to a telco lab? These facilities are filled with the nameplates of two-bit startups who at best get $1m a qtr contracts. Go to a CO, and it's all LU, NT, and ALA, hardly any CIEN.

You can try to spin it however you want, but when I talk to buy siders today, the issue is not whether to buy CIEN, but whether to short it.
lilgatsby 12/4/2012 | 11:10:17 PM
re: Ciena Seeks R-E-S-P-E-C-T Steeler, your comparisons are somewhat flawed.

NT and LU just each respectively turned a profit for the first time in over 3-years. Not exactly what you'd call good companies. NT and LU have trimmed their product lines to the bone, and don't be surprised when their non-profitable optical lines are flushed altogether. Take a look at any large incumbent and tell me that CIEN isn't in the network or labs. The list of these will be noticably short.

Name one company with greater enterprise strength than Cisco. Like I said, comparing Cisco to anyone is a losing proposition in any other area than optical. Cisco cleans up on router margins, plain and simple. The rest is window dressing.

Steeler 12/4/2012 | 11:10:17 PM
re: Ciena Seeks R-E-S-P-E-C-T Sell side research notes are not an indication of investor sentiment. Fund managers are the ones actually making investments, and their view of CIEN is that it looks like the perfect short. In addition to the roughly $50m a year burn rate, the company does not have the enterprise strength of Cisco, nor the incumbent relationships of Lucent, Alcatel, or Nortel.
lilgatsby 12/4/2012 | 11:10:19 PM
re: Ciena Seeks R-E-S-P-E-C-T Comparing Cisco to anyone is a losing proposition, unless of course the topic is optical.

This board has discussed before the humor and marketing craft involved with a $1B goal for Cisco optical. The 15808 is MD, the 15540 is MD, Pirelli (not that it works) is its own company again, the 15327 and 152xx represent such a small revenue source they wouldn't even register. So that leaves the mighty 15454 to do $1B. Cisco can bolt on all the DWDM, 10G and added features that other boxes already have and this will still only ever be a very nice SONET ADM. Not a bad box for its time, but not the market's killer product anymore...see FY2000 to relive those days.

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