x
Optical/IP

Gilder Backs Corvis

George Gilder, editor of the Gilder Technology Report (GTR), has added Corvis Corp. (Nasdaq: CORV) to his list of "Telecosm Technology Companies" in the April edition of the newsletter, released this week.

Gilder has long said he's not into "stock-picking." But tell that to Wall Street, which has religiously followed Gilder's picks for years.

Before you log on to E-trade, take note of some other adjustments to the GTR list. Previous "hot" Gilder fiber-optic picks Lucent Technologies Inc. (NYSE: LU) and Nortel Networks Corp. (NYSE/Toronto: NT) have mysteriously dropped off the list, with nary a mention in the newsletter. Out of sight, out of mind?

The rationale behind the Corvis pick? Gilder and GTR analyst Charles Burger write in April's issue that Corvis fits well into their larger theme, which is that the massive addition of bandwidth will render irrelevant many of the finer points of optical networking, such as the grooming of STS1 (51.8 Mbit/s) circuits and software management features. In the Gilder vision of the future, optical bandwidth is so overabundant that packing the pipes in a neat and efficient fashion isn't worth the trouble. It also assumes that electronics will be quickly booted out of the optical network.

"Light will be 10 orders of magnitude more reliable and 10 orders of magnitude faster," write Gilder and Burger in the newsletter. "The network would harden. Whether in the BlueArc Silicon Server or in a Corvis or Avanex Corp. [Nasdaq: AVNX] network, software complexities rooted in the scarce processing power and memory of the microchip can be driven out by wasting the abundant gates of FPGAs [field-programmable gate arrays] or in the copious bandwidth of the optical fiber."

In short, Gilder and Burger believe that Corvis's small port-count, all-optical switches in the core will supercede optical-electrical-optical(OEO) switches offered by competition such as Ciena Corp. (Nasdaq: CIEN). In fact, the GTR has beaten up on Ciena in recent months, saying the company's focus on software has been misguided.

Interestingly enough, Corvis is developing OEO products that will more directly compete with Ciena's offerings. The most obvious is a grooming switch, which, of all things, addresses the manipulation of finer circuits such as STS1 (see Corvis Offers Grooming Tips). Despite Gilder's mantra of "waste the bandwidth," it appears that telecom carriers are still demanding such functionality in switches, and this has been the primary driver behind Ciena's recent sales success. Corvis has taken note.

The Corvis pick comes at in interesting time. Usually, Gilder pays no heed to valuation, focusing instead on pure technology. This time he has picked a stock whose valuation has been drastically reduced by the technology bear market. Following its IPO last summer, Corvis traded at a valuation of $25 billion, even though it had yet to receive one dollar in revenue. On Tuesday morning it was trading at about 8.00, giving it a valuation of $3 billion. If the company's promised contracts with Williams Communications Group (NYSE: WCG) and Qwest Communications International Corp. (NYSE: Q) come through, the company could hit $500 million in sales in the calendar year 2001. If Corvis lands some of the new customers it's been whispering about, it could lead to the company actually beating its guidance for 2001 (see Corvis Closing in on New Customers).

-- R. Scott Raynovich, Executive Editor, Light Reading http://www.lightreading.com
Page 1 / 3   >   >>
iprsvp 12/4/2012 | 8:33:27 PM
re: Gilder Backs Corvis GTR doesn't even understand the importance of grooming and GTR gets to choose the top picks. What the hell??
fk 12/4/2012 | 8:33:27 PM
re: Gilder Backs Corvis Gilder understands grooming perfectly well; he simply disagrees on its relative importance going forward. Gilder doesn't read the current state of things; he postulates on the future.
Fred Snarff 12/4/2012 | 8:33:26 PM
re: Gilder Backs Corvis "Gilder doesn't read the current state of things; he postulates on the future."

exactly. I think pontificates is a more accurate term. that's the problem - he's totally disconnected from reality. give me a break. he and his follwers claim futurism whenever confronted with reality, yet he's picking stocks in a portfolio that is supposed to perform today.

Einstein: anyone can pontificate about neat technology - that's easy. how about investing in it to MAKE SOME MONEY - in a bear market. Gilder's throwing darts. CIENA is proving that point.

Fred
shredj 12/4/2012 | 8:33:26 PM
re: Gilder Backs Corvis - every home in america will have a picture phone by 1970
- fiber to the home will take root by 1994

Technology is great but only one driver of reality.
Leviathan 12/4/2012 | 8:33:26 PM
re: Gilder Backs Corvis
What a bunch of crap. Can you say "log-rolling"? George, your objectivity is showing.
Belzebutt 12/4/2012 | 8:33:24 PM
re: Gilder Backs Corvis "- every home in america will have a picture phone by 1970
- fiber to the home will take root by 1994"


Flying cars! Don't forget the flying cars.
Half-Inch Stud 12/4/2012 | 8:33:24 PM
re: Gilder Backs Corvis I'm impressed with that future. That Gildar sure thinks things through. Other (hyped-up) things that make you go Hmmm;

OOO-based Long/Metro switch/routing,
"a Wavelength for every building.."
Networks based on long-wavelength conversion devices,
Wireless internet beyond Text emails,
Dot-Bombs,
Last-mile fiber to Consumers,
Consumer Satellite phones.

Some things to be remembered without all the hype;
Commercial-Free Sat-radio [wireless],
Sat Dish TV [wireless],
Propane and propane accessories,
Beta vs VHS,
Corvair [Rear drive with FWD MFG economics].

H.I. Stud
fatchance 12/4/2012 | 8:33:20 PM
re: Gilder Backs Corvis Come now, don't you folks know a negative indicator when it pops up. If he says left, go right, if he says up, go down. If he says OOO go OEO. Can't lose.
flanker 12/4/2012 | 8:33:20 PM
re: Gilder Backs Corvis - fiber to the home will take root by 1994

being off by 20 years is still better than ATT betting the farm on COAX. Secondly, the barriers to FTTH are regulatory (can you say Verizon?) not technological.

jeepers!
melao 12/4/2012 | 8:33:15 PM
re: Gilder Backs Corvis "I'm impressed with that future. That Gildar sure thinks things through. Other (hyped-up) things that make you go Hmmm;

OOO-based Long/Metro switch/routing,
"a Wavelength for every building.."
Networks based on long-wavelength conversion devices,
Wireless internet beyond Text emails,
Dot-Bombs,
Last-mile fiber to Consumers,
Consumer Satellite phones.

Some things to be remembered without all the hype;
Commercial-Free Sat-radio [wireless],
Sat Dish TV [wireless],
Propane and propane accessories,
Beta vs VHS,
Corvair [Rear drive with FWD MFG economics].

H.I. Stud"

I'm impressed that people think that OOO will take over soon.
Maybe on the core yes. But on the access, jesus, it will take a while to have optical access.

xDSL is getting popular by now.
Access will be for a while electrical.

I guess 90% of the people in the world still access the internet via 56k analog modems.

Final customers are the ones driving the demand for bandwidth, and we still lack of broadband access at home. It exists but it's not that common.

Maybe the xDSL will demand more bandwidth so that the core networks need a better optical network. Then use OOO switch.

MAYBE...
Page 1 / 3   >   >>
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE