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Optical/IP

Lucent Lights Up LambdaUnite

Lucent Technologies Inc. (NYSE: LU) plans to unveil the LambdaUnite grooming switch next week, Light Reading has learned.

Lucent sources in Europe confirm the plan, but U.S. spokesperson Wendy Zajack will only say that Lucent plans a major rollout "sometime within the next few weeks."

The announcement is bound to be met with wide interest, since the LambdaUnite MultiService Switch is among the first of Lucent's next-generation optical products, which were announced this past fall (see Lucent Unveils Product Lineup). Lucent is apparently counting on these new offerings to help move it significantly toward its goal of becoming profitable this year (see Can Lucent Make It?).

It's not clear whether the announcement also will include the rollout of Lucent's newly enhanced TMX 880 Multiservice Xchange Switch, a platform equipped with MPLS (multiprotocol lable switching) meant to work alongside the company's GX 550 and CBX 500 ATM switches -- the ones Lucent inherited with its purchase of Ascend. When Lucent made its next-generation product presentation last fall, it said the TMX 880 also would be released in January, featuring "optical core interfaces available in controlled introduction."

The TMX 880 will compete with products from Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Équipe Communications Corp., Marconi PLC (Nasdaq/London: MONI), and other vendors seeking to unify legacy Asynchronous Transfer Mode (ATM) networks with Internet Protocol (IP) via Multiprotocol Label Switching (MPLS). (See The Great ATM Switch Blitz.)

The news will be big for Lucent, but judging by industry response to Lucent's earnings report Tuesday, it had better include word of new customers along with product specs.

"This will be a good test of customer commitment to Lucent," says Bill Lesieur, director of Technology Business Research Inc., a research firm. "They have to come through with customer acceptance."

"[We] believe contract traction with next-gen products is needed to validate the company's product and technology roadmap... Investors are likely to begin focusing on Lucent's contract traction with next-generation products," writes Alkesh Shah of Morgan Stanley Dean Witter & Co. in a note to clients this week. "Lucent has disclosed scant details on their progress at carriers."

Lucent seems aware that it's under pressure to produce customers. The company has said it's trialing the LambdaUnite switch in at least two undisclosed locations.

But just how strong a competitor will the LambdaUnite be? Lucent's been cagey with details of the switch. Here's what's known: It combines Sonet and SDH add/drop multiplexing with crossconnect capabilities. It will switch 10- and 40-Gbit/s connections across metro and core links. It sports initial capacity of 1.28 Tbit/s. (A later iteration, the LambdaManager, will be much larger, supporting up to 10 Tbit/s.)

The LambdaUnite apparently evolved from the company's WaveStar Bandwidth Manager and LambdaRouter product lines, and it is set to compete head to head with Ciena Corp. (Nasdaq: CIEN) and its CoreDirector and, to a lesser extent, with Tellium Inc. (Nasdaq: TELM).

Most analysts hold little hope that Lucent will make a major impact against Ciena. For one thing, they're late to a market that's tough to penetrate (see No Riches From Optical Switches ). And they're coming up against an incumbent with an established first-mover advantage with incumbent carriers.

Some say the LambaUnite's parentage could work against it. "We believe that the company will find it difficult to generate significant revenues and profitability from these platforms," write students at MIT's Sloan School of Management in a research note issued in December. The note says the company's long absence from the optical switching market and small success with the LambdaRouter don't offer much hope for its new line, although it is possible Lucent will break with its past.

Most are skeptical this could happen, however. "It would be remarkable if Lucent came out with a product anytime soon that could compete with Ciena," says Mark Lutkowitz, VP of optical networking research at Communications Industry Researchers Inc. (CIR). Lutkowitz says Lucent would be better off focusing on areas where it has a hope of winning big.

That may mean getting out of optical altogether. "Their optical products have always been adequate to sub-par. They ought to OEM like there's no tomorrow," he asserts, "and get rid of any residual arrogance regarding developing things themselves."

Others agree: "Lucent's a services company. They need to reassess the value of their organization and especially the services side. Overseas, Lucent is a prime contractor," says Frank Dzubeck, president of Communications Network Architects, a consultancy.

On the plus side, though, Lucent may have surprises in store for the naysayers. During last fall's presentation, the company made clear that its customer base would be globally focused, and customer wins have been heavy in Asia-Pacific and Europe over the past few months. If the LambdaUnite can demonstrate substantial Sonet (Synchronous Optical NETwork) and SDH (Synchronous Digital Hierarchy) grooming capabilities, it just might win over some customers that would otherwise turn to Ciena.

Depending on what it has to say next week, Lucent also could gain some ground against another potential competitor in this space, Nortel Networks Corp. (NYSE/Toronto: NT), whose Optera Connect HDX platform is also late to market compared to Ciena. Unable to provide solid evidence of customer acceptance, Nortel has suffered criticism that it's only trying to make a good show, that the HDX is nowhere near ready for shipment. Rumor has it that size, scaleability, and power requirements are still being worked out.

— Mary Jander, Senior Editor, Light Reading
http://www.lightreading.com
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let-there-be-light 12/4/2012 | 11:01:54 PM
re: Lucent Lights Up LambdaUnite First of all, a small question, how could an SDH/SONET multiplexer/cross-connect evolve out of a MEMS-based optical switch as is suggested by your article?

"The LambdaUnite apparently evolved from the company's WaveStar Bandwidth Manager and LambdaRouter product lines..." This statement is just so outrageously wrong, that I can't let it go by without comment. Perhaps you should change it to, "We have absolutely no idea where the system came from and why/how it was developed." Sometimes I really wonder about your journalistic style (true, I keep coming back..)

Anyway, I think out of all Lucent's systems, this could be the one to surprise a few people and have considerable success in the marketplace.

But we'll see..
switchrus 12/4/2012 | 11:01:52 PM
re: Lucent Lights Up LambdaUnite As the telecom analyst at the investment firm of Dowecheatem & How, Ms. Clara Peller, was heard to exclaim after reading the Light Reading article on the new Lucent LambdaUnite...GÇ£WhereGÇÖs the beefGÇ¥!

Is it a switch like Tellium ?

Is it a OOO ?

Is it fish or fowl ?

Only time will tell.
nextone 12/4/2012 | 11:01:51 PM
re: Lucent Lights Up LambdaUnite "It's not clear whether the announcement also will include the rollout of Lucent's newly enhanced TMX 880 Multiservice Xchange Switch, a platform based on the company's GX 550 and CBX 500 ATM switches Lucent inherited with its purchase of Ascend."

Same goes for this one too. TMX880 is based on nexabit technology and not GX550 or CBX 500. I don't know who your sources are but do verify facts before writing articles.

Also Lucent is no where near realsing TMX880 unless they just rename the nexabit box
jimbo59 12/4/2012 | 11:01:50 PM
re: Lucent Lights Up LambdaUnite ...NOT! I've got to jump onto the 'shoddy research' bandwagon and say you ought to investigate that claim a bit further...
sjd5 12/4/2012 | 11:01:49 PM
re: Lucent Lights Up LambdaUnite I guess LR now considers management students
"industry analysts".
Or maybe they always have.
Litewave 12/4/2012 | 11:01:47 PM
re: Lucent Lights Up LambdaUnite Word on the street is that Lucent has been up to its usual bag of tricks with this box.

Its not quite there yet - they bait with LambdaUnite's spec sheet, but delivery old sh*t to hold the opportunity.

Life goes on...
commonman 12/4/2012 | 11:01:47 PM
re: Lucent Lights Up LambdaUnite "It's not clear whether the announcement also will include the rollout of Lucent's newly enhanced TMX 880 Multiservice Xchange Switch, a platform based on the company's GX 550 and CBX 500 ATM switches Lucent inherited with its purchase of Ascend."

Same goes for this one too. TMX880 is based on nexabit technology and not GX550 or CBX 500. I don't know who your sources are but do verify facts before writing articles.

(i agree, LR needs to do there homework before writing wrong information).

Also Lucent is no where near realsing TMX880 unless they just rename the nexabit box.

(the TMX will never see the light of day. it couldn't make it as an IP Router, what makes them think it will as am ATM switch?)

Also, why was LU execs all over Equipe the past few days??? Nice going canceling the MCS25000 ATM Core Switch...aka "OZ"
HarveyMudd 12/4/2012 | 11:01:45 PM
re: Lucent Lights Up LambdaUnite There is definitely good market for Multiservice Optical.The worldwode for this product is close to $6.00 Billion. With Lucent's influence on the ILECs and other carriers. Lucent can capture a large portion of the market. The competition is this area is from Nortel and Ericsson. It will be very hard for start-ups to compete woth Lucent.

Lucent used to have workforce (to have such a workforce again will be a part of the recovery process) that was capable of producing the best products.

It is hoped that services such as ATM, IP/MPLS, Frame Relay, and ciurcuit emulation and voice services are supported. I am sure that satifies all requirements o0n reliability and scalability.

Good news. Focus on markets is really the key to success.



phazshifter 12/4/2012 | 11:01:44 PM
re: Lucent Lights Up LambdaUnite Excellent comments by all but the bottom line is:
I just want to make my money back on the stock!

P
Mary Jander 12/4/2012 | 11:01:43 PM
re: Lucent Lights Up LambdaUnite The TMX 880 is designed to work alongside the ATM switches and won't be physically integrated with the GX 550 and CBX 500. I misunderstood this and fixed.
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