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Optical/IP

Is Ciena Eyeing Luminous & Laurel?

Word has it Ciena Corp. (Nasdaq: CIEN) is eyeing Resilient Packet Ring Technology startup Luminous Networks Inc. for possible investment or acquisition.

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

skeptic 12/4/2012 | 11:38:00 PM
re: Is Ciena Eyeing Luminous & Laurel? 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?"
----------------
I would call it the "hollow head" approach.
if you move your core to the edge and mesh
everything with WDM, you end up with a really
massive and unstable "core" made of edge boxes.

Besides which the transition to multiservice
edge is complex enough without trying to take
on the role of the core at the same time.
jamesbond 12/4/2012 | 11:38:00 PM
re: Is Ciena Eyeing Luminous & Laurel? skeptic,

Just curious - how many routers are there in the
core? I am assuming core router is defined as
one with no default route and full routing table
(how many ever entries there are today).

thanks,
skeptic 12/4/2012 | 11:37:58 PM
re: Is Ciena Eyeing Luminous & Laurel? Just curious - how many routers are there in the
core? I am assuming core router is defined as
one with no default route and full routing table
(how many ever entries there are today).
============
There isn't a really good answer for that.
You can come up with numbers based on cities and
number of providers that can give you an
approximation for north america. Europe and
asia are more difficult to figure out mostly
because the geography is so different.

Some people have four core routers per POP,
others two. There are also places where people
use "core" routers but not necessarly in a
traditional "core" role.

In terms of selling core routers, its not
necessarly *just* the number of systems, but
what goes into those systems.
jamesbond 12/4/2012 | 11:37:51 PM
re: Is Ciena Eyeing Luminous & Laurel? There isn't a really good answer for that.
You can come up with numbers based on cities and
number of providers that can give you an
approximation for north america. Europe and
asia are more difficult to figure out mostly
because the geography is so different.

---------------------------------------

Shouldn't that number be easy to guess from the number of
unique nexthops in the core routing table ?


Graham Beniston 12/4/2012 | 11:37:46 PM
re: Is Ciena Eyeing Luminous & Laurel? I'd make two points here. Firstly, a Carrier's core network is not synonymous with the Internet - they also have ( or should have) a private IP network for customer VPNs etc. Obviously this core network has to have Internet connection, and the trends I saw over the last few years was a move away from a few peering point interconnections like MAE East and MAE West, to several private peering points with major regional aggregators. But you are still correct that you'd have a larger mesh of routers running OSPF or BGP, which could cause stability issues.

The second point is that I wasn't proposing this architecture, I was pointing out that some vendors have floated this idea. I came across it in Marconi Pittsburgh (ex FORE) where there were some very good IP guys. And I thought it was appropriate to point it out in this case as Laurel Networks is a Pittsburgh-based start-up with several ex FORE Systems guys.
flush_meat 12/4/2012 | 11:37:45 PM
re: Is Ciena Eyeing Luminous & Laurel? Hmm... Laurel is making little bit of
noise in the recent past which is good.
I too heard that Laurel is filled with
a bunch of ex-FORE guys. Are they not
ATM switch guys? Interesting to read
that there are good IP guys out there.

Also, if Laurel is good, why should it
be sold to Ciena? Why not to Juniper?
But, Juniper just bought Unisphere?
Sure, it is not Laurel's choice, it is
the buyer's wish ;-) On the other hand,
you don't want it become like FORE systems,
right?

I remember reading that FORE was sold
to Marconi as a cash-buyout. Is this not
a wrong decision?

Laurel's website says it is a edge router
company. Seems to be an interesting one
to eye on at least?

My two cents.

/FM
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