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Optical/IP

Lucent Pulls LambdaManager

Lucent Technologies Inc. (NYSE: LU) has decided to halt development on its LambdaManager, one of the four strategic optical products announced last fall (see Lucent Unveils Product Lineup).

LambdaManager, originally set for release this month, was planned as a high-end, multiterabit-capacity grooming switch to upgrade the newly released LambdaUnite, which was announced early this year (see Lucent Lights Up LambdaUnite).

"Our carrier customers tell us their capacity needs will be met by the LambdaUnite for the foreseeable future," says a Lucent spokesperson. Lucent has judged that by the time customers are ready to move beyond the LambdaUnite's 1.28-Tbit/s capacity, the next iteration of LambdaUnite will have evolved to handle demand.

Lucent doesn't have a timeframe for when it thinks new capacity may be sought, however. "The market is difficult right now," says the spokesperson.

Lucent acknowledges some layoffs will be associated with the discontinuance of LambdaManager development, although it can't say just when that might happen or how many employees will be involved. Separate sources close to the company, however, have told Light Reading that layoffs of about 250 will likely happen within 30 days.

Lucent's LambdaManager was meant to be a high-end grooming switch with STS-1 granularity, competing with the likes of the CoreDirector from Ciena Corp. (Nasdaq: CIEN). But analysts say the market for larger-size OEO switches just isn't there at the moment.

"The bigger machines are falling out of favor with carriers," says Sam Greenholtz, senior analyst at Communications Industry Researchers Inc. Carriers don't want to buy for capacity they may not be able to fill, he says. And since the terrorist attacks in the U.S. last September, there's resistance to putting too many connections in one place, in case of outages, Greenholtz says.

"Lucent probably saw the prospect of limited sales at best and said, 'Let's get out while we can.' "

Lucent's not the first vendor to pull development of large switch gear. Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) was first to end its high-end switch effort back in November 2001 (see Tellabs Pulls a Switch). And sources say the recent demise of Brightlink Networks (see BrightLink to Shut Down This Week) attests to a present lack of support in the market for monster OEO grooming switches.

Lucent says the halting of LambdaManager won't affect the traction of the other three products in its Lambda lineup, all of which became generally available this quarter.

LambdaUnite is in field trials at Deutsche Telekom AG (NYSE: DT), the vendor says. It's also in the process of being certified to run on the network of a "major European carrier" and is presently in lab trials at about "a dozen" other carriers.

The LambdaXtreme DWDM core transport box (see Lucent Lays on More Lambdas ) is in 40-Gbit/s field trials at Deutsche Telekom, Lucent says, as well as field trials with a "large North American carrier" and lab trials with six others.

The TMX 880 MPLS Core Switch (formerly named the Multiservice Xchange Switch), which competes with ATM-to-packet gear from Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Équipe Communications Corp., and others, is in lab trials with a "small amount of customers," Lucent says.

— Mary Jander, Senior Editor, Light Reading
http://www.lightreading.com
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optiplayer 12/4/2012 | 10:22:48 PM
re: Lucent Pulls LambdaManager
Generally a good piece but why did you include the Nortel Xyros decision as an example of vendors killing large switches when the Xros switch and the LambdaManager are two entirely different products.

LambdaManager is an OEO grooming switch while the Xros box was all optical. The Xros box was killed because there is no market for that type of switch, period. It had nothing to do with size.

The Tellabs example was a good one but you once against demonstrated a lack of knowledge of the switch market by including Xros.
manoflalambda 12/4/2012 | 10:22:47 PM
re: Lucent Pulls LambdaManager Generally a good piece but why did you include the Nortel Xros decision as an example of vendors killing large switches when the Xros switch and the LambdaManager are two entirely different products.

Yeah, a LambdaManager - HDX comparison is more in line. As would be LambdaRouter - Xros (PX) - Calient.

Salute,
Manoflalambda
Outsider 12/4/2012 | 10:22:47 PM
re: Lucent Pulls LambdaManager Optiplayer, excellent post.

What does Lucents announcement mean for Calient?

Also if All-Optical stand alone switches are dead then how could Movas just recently close another round of funding?
manoflalambda 12/4/2012 | 10:22:46 PM
re: Lucent Pulls LambdaManager What does Lucents announcement mean for Calient?

Depends on whether the wavelength provisioning market picks up. The all-optical switches are trying to carve a market niche somehow.

Also if All-Optical stand alone switches are dead then how could Movas just recently close another round of funding?

Looks like the all-optical action is moving to the Metro area with assorted MEMs based Optical Add/Drop and Wavelength switching boxes in play. Movaz seems to be pointed in that direction.

Salute,
Manoflalambda
Lightmare 12/4/2012 | 10:22:46 PM
re: Lucent Pulls LambdaManager Anyone else hear the rumor that the LU TJMax 880 is in retail trials with the ILEC (Incompetent Local Exchange Carrier) Axiowaves?
BobbyMax 12/4/2012 | 10:22:45 PM
re: Lucent Pulls LambdaManager Considering the optical networking business, it is very wise to kill LambdaManager. It is expected that most of the optical switch vendors will drop from the scene. There is also no market demand for wavelength services. The stand-alone optical switches have been long dead, although VCs have pure optical start-ups. Yjese companies will fold soon.

Both Lucent and Nortel have experienced huge loses in acquiring optical companies. Xros was ay bad deal for Nortel.

Lucent workforce is still very huge. Its current revenue stream cannot support such a large workforce.
jamesbond 12/4/2012 | 10:22:45 PM
re: Lucent Pulls LambdaManager Looks like the all-optical action is moving to the Metro area with assorted MEMs based Optical Add/Drop and Wavelength switching boxes in play. Movaz seems to be pointed in that direction.

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


If above is true then how do you explain Opthos?
Weren't they doing the same thing?

William Wallace 12/4/2012 | 10:22:44 PM
re: Lucent Pulls LambdaManager Bobby,

Pay attention - it has been expressed that comparing Xros LambdaManager is apples/oranges
straight shooter 12/4/2012 | 10:22:44 PM
re: Lucent Pulls LambdaManager What does it mean to Calient?

Not much. The LambdaManager was a late-to-market OEO grooming switch, not a photonic switch.

Lucent is still selling/supporting their LamdaRouter, which is their photonic switch offering that competes with the Calient DiamondWave product.
optiplayer 12/4/2012 | 10:22:43 PM
re: Lucent Pulls LambdaManager
If anyone has a chance to make it with an all-optical switch its Calient as they have the lead and the specs are solid. Two big questions:

Can they last until the market for optical agility arrives (likely years)?

Assuming the market does arrive, is it big enough to sustain a company? There just aren't that many sites that need these switches so the addressable market seems very small.

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