Is Ciena Eyeing Luminous & Laurel?
It's also possible that Ciena has similar designs on edge router maker Laurel Networks Inc., according to one industry source, who requested anonymity. Light Reading was unable to find a second source to confirm this, however.
Either move would fit Ciena's goal of becoming an end-to-end player in the multiservice space.
Indeed, Ciena's been intent on enhancing its edge proposition. Its purchase of WaveSmith Networks in June added Layer 2 multiservice switching to the company's optical platform. And a follow-up trial of newly integrated Ciena/WaveSmith gear at SBC Communications Inc. (NYSE: SBC) has folk talking about a possible deal with Catena Networks Inc., which would add access options (see Ciena May Be Eyeing Catena).
While declining to comment on the Laurel or Luminous speculation, Ciena VP of marketing communications, Denny Bilter, does allow that his company's "always looking" at ways to enter new markets, including through acquisition and investment if need be.
Ciena can afford to go shopping: Its latest earnings report showed $1.8 billion in cash and investments (see Ciena Sales Up, Outlook Cloudy).
Neither Laurel nor Luminous execs returned calls or email requesting comment on Ciena by press time. But analysts who hadn't heard the rumors think both companies could give Ciena help in its quest -- specifically, Laurel could add IP edge routing and Luminous, RPR technology. Interestingly, both companies in turn see their futures in multiservice networking of the kind Ciena embraces (see Laurel Joins B-RAS Pack and Luminous Thinks Small).
Any potential pair-up would reflect an industry-wide move toward diversified edge services with faster core transport. "I call it the hollow core approach," says Graham Beniston, principal of Beniston Broadband Consulting. "Instead of adding many core routers, why not boost edge routers and mesh them out with WDM?"
Either RPR or IP routing could help the cause, though RPR seems more controversial. "Edge routing is a big chunk of the market going forward," says David Passmore, research director of the Burton Group. "But RPR is not as important. It's hanging in there, but it won't ever really achieve mainstream status."
Others disagree: "RPR is important around the world, and its importance will grow in North America," insists Michael Howard, cofounder and principal analyst at Infonetics Research Inc. Luminous has been particularly successful with RPR in China and Korea, he says, where the crux of the Asian RPR market is right now (see Keybridge Orders Luminous Gear and Luminous Gets China VP).
Ciena isn't alone in its talent search. Other optical switch vendors are keen to round out optical switching with Layer 2 and Layer 3 features -- as demonstrated by the purchase of Laurel competitor Vivace Networks by Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA); and the buying of TiMetra by Alcatel SA (NYSE: ALA; Paris: CGEP:PA) (see Tellabs Closes Vivace Acquisition, Lehman Likes Tellabs/Vivace, and Alcatel & TiMetra Seal the Deal).
— Mary Jander, Senior Editor, Light Reading