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Optical/IP

Nortel's Got a Plan

OTTAWA -- By all accounts, the past nine months have been the worst in the history of Nortel Networks Corp. (NYSE/Toronto: NT). But one of the struggling company's top two optical executives says it's not time to throw in the towel.

In an exclusive interview with Light Reading at his office in Ottawa, D.G. "Greg" Mumford, president of Nortel's Optical Internet business (see Greg Mumford), detailed his plans to help the reeling Canadian giant regain its footing.

"We are absolutely focused on the high-growth segments of this industry," Mumford says. "It's a tough time for the company, but we think we're investing in the right things and that our investment program is on the right trajectory."

To start with, Nortel's optical divisions have regrouped, as previously reported in Light Reading (see Nortel's Empty Room at the Top). Mumford's still in charge of the Optical Internet division, which includes long-haul optical equipment. His colleague Frank Plastina, who like Mumford reports directly to CEO John Roth, governs an expanded suite of divisions that includes Metropolitan Optical, which is now headed up by Brian McFadden.

When questioned, Mumford says he's not sure who'll succeed Roth, who plans to retire next year. He is clear about one thing, however: The candidate will come from outside the company.

"John Roth and the board have decided the new CEO will be external," he remarks. Further, he says the company might leave the post of chief operating officer vacant. (COO Clarence Chandran has resigned for health reasons.)

"Before 2000 we didn't have a COO," he notes. While times are tough, he says, the company can probably do without one.

Mumford's enthusiastic, though, when it comes to describing the products his division plans to promote this year. Topping the list is the Optera Connect HDX, Nortel's long-awaited, integrated, multiprotocol DWDM platform.

Aimed to compete with the CoreDirector switch from Ciena Corp. (Nasdaq: CIEN), the HDX is out to best its rival in the long-haul market. Mumford says it will support a 3.8-Tbit/s fabric, fed by multiple 800-Gbit/s switching cards, and up to 384 DWDM channels -- all without taxing the present power and air conditioning requirements of the carriers. It will bristle with interfaces, including multiple gigabit and 10-gig Ethernet -- followed as soon as possible by 40-Gbit/s.

The HDX will also be a grooming box, capable of manipulating STS1 (51.8 Mbit/s) connections. It will deploy MPLS (multiprotocol label switching), including prestandard iterations of generalized MPLS, which handles circuits and wavelengths as well as packets.

Software called Optera Smart is also a key item on Mumford's roster. This suite of protocols, announced earlier this year along with the HDX, will be added across the board to Nortel's gear to provide an automatic way for devices to interact with other gear on the optical network. Optera Smart is based on specifications for an Automatic Switched Transport Network (ASTN), formulated by the International Telecommunication Union (ITU).

Sounds terrific. But doesn't it matter that the Connect HDX still has an electrical core -- giving it a limited lifespan?

Not a bit, Mumford says. "That's what the carriers require right now." As long as individual wavelengths must carry a mix of traffic -- voice, IP, Sonet, Ethernet, etc. -- electrical devices will be required to sift, aggregate, and manage it, he says. As the carriers make the move to larger, smarter optical cores, based on Nortel's own 1000x1000-matrix photonic switch (also under development), the HDX will move farther out on the edge.

Mumford also says that Nortel's terabit router, the Optera Packet Core, which came to light last year (see Nortel Discloses Terabit Router Plans ), is now set for beta testing by year's end. A key feature of this product will be its ability to expand capacity by linking multiple chassis, instead of requiring a new chassis.

And there you have it. A roadmap of hope through Nortel's slough of despond. Now the question seems to be whether Nortel can get all this out the door, despite its financial woes and the layoff of 21 percent of its workforce (see Nortel: Losses and Layoffs, Eh?). Indeed, there's not a moment to lose, considering the ongoing traction that Ciena's CoreDirector continues to gain (see How Ciena Won TyCom ).

Mumford seems to anticipate the questions and is intent on demonstrating the reality of his product vision. A lengthy tour of the optical lab reveals what is perhaps Ottawa's largest and most complex testbed for long-haul gear. At one table, components are displayed, many of them aimed at sustaining 40-Gbit/s equipment.

In a sunlit corner, prototypes of the Connect HDX are on view. Fully assembled cards and chassis are slotted into racks, interface cards open to reveal glittering arrays of squiggly coils and squares in startling patterns. Mumford says carriers will have the product in hand for trials by late this summer.

"Look at this," he says, breaking into a grin as he leans over an opened 800-Gbit/s switching card and a display of associated components. "Some of this couldn't have been done even six months ago. This is why we're confident." - Mary Jander, Senior Editor, Light Reading
http://www.lightreading.com
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Belzebutt 12/4/2012 | 8:25:29 PM
re: Nortel's Got a Plan The HDX was actually unveiled last year. They had a huge party at Skyline with mountains of shrimp and other fine food. The guest speakers included Virtual Reality pioneer Jaron Lanier and the teen CEO of Relic Entertainment, makers of the game HomeWorld.

The OPC has also been in the works for a long time now.

Mary, did you actually fly in from Halifax to get this tour? I hope they showed you the Metro 2400, now THAT is cool. No more problems with birds flying into windows, we'll just fry them with lasers :)
jmd 12/4/2012 | 8:25:29 PM
re: Nortel's Got a Plan How many of these product initiatives were conceived prior to the current crisis?
^Eagle^ 12/4/2012 | 8:25:29 PM
re: Nortel's Got a Plan ALL of these product initiatives were started WELL before the current/recent crises.

These kinds of developments take much longer than a couple of quarters. Most of them were begun as long as 2 year or more ago.

This is very reliable information...no fluff or spin.

The products work!

The only one taking a much longer time than planned was the 1000x1000 all optica mems based switch acquired from XROS. Good thing for nortel is the market is not quite ready for that box at this time...so no real concerns about being late on that one. The HDX will more than suffice for next several quarters.

sailboat.
jimmy 12/4/2012 | 8:25:28 PM
re: Nortel's Got a Plan Sub 2.4 Gbit grooming is required in the network. The cost of grooming is in the I/O, not the core. If you deploy both a Tellium switch for 2.5 Gbit management and HDX or Ciena Core Director for sub 2.5 gbit (STS-1 and above)your network capital costs increase because of inter-machine cabling ....Additionally, operation cost associated with two fabrics are 3x more expensive than to manage one.

I pitty those who buy into Tellium when they IPO; they're toast. Ask Cisco about Monterey.
PBC 12/4/2012 | 8:25:27 PM
re: Nortel's Got a Plan What's the word out there with respect to Nortel and Juniper hooking up and having Kriens run the whole show?

-PBC
Belzebutt 12/4/2012 | 8:25:26 PM
re: Nortel's Got a Plan I seriously doubt that a small nimble company like Juniper would want to merge with a behemoth like Nortel. It would totally disrupt their culture. Nortel's latest financial results also don't make them the most attractive merger candidate...
jmd 12/4/2012 | 8:25:26 PM
re: Nortel's Got a Plan ItGÇÖs not good enough that people are hoping the market will just pickup itGÇÖs previous trends GÇô it will change after something like this GǪ service providers were creamed and their focus has already changed. The products that made sense last year may not make as much sense now. The GÇÿplanGÇÖ needs to address this before customers can get excited about what NortelGÇÖs plans are (...cool technology aside).
Napper 12/4/2012 | 8:25:22 PM
re: Nortel's Got a Plan Mary,

Mumford pulled the wool over your eyes.

There is no plan. At present, the only plans in Nortel are self-preservation plans created by undeserving executives. The Optical Ethernet is a classic example of hundreds of nincompoops running around the country on road shows in a space that Nortel is almost sure to lose to Cisco, Foundry and Extreme. In fact the game is almost over. And in spite of Nortel's pronouncements to the contrary, the solution story that Nortel is spinning, is considered a joke in the industry.

The elimination round of executives to be given pink slips needs to start with Roth's cabinet, which is the weakest it has been for years. Politics have propelled these individuals to where they are but the market should take them down. Other messages to Lightreading (http://www.lightreading.com/do... have identified a few that need to be axed but the scalpel should go much deeper if Nortel should survive as a company.

One should not be surprised that a year from now, Lucent emerges as a far stronger company than Nortel. The situation internally in Nortel is that pathetic. Interesting to see that it took a shake-up in the market for this to get exposed.

Internally, nobody gives OPC a chance. Meanwhile Juniper is taking Nortel for a long ride under the guise of a partnership. Scott Kriens would not waste one moment pondering any merger plans.

And nobody gives the HDX a reasonable shot against Ciena's CoreDirector.

But ignoring all kinds of product problems, Nortel needs to trim its executive staff if the rest of the organization is to be even marginally inspired.

And the message to Mr. Roth is: "Start Now".
gladysnight 12/4/2012 | 8:25:20 PM
re: Nortel's Got a Plan
My plan is called "short NT"
jmd 12/4/2012 | 8:25:18 PM
re: Nortel's Got a Plan Napper says:
GÇ£And the message to Mr. Roth is: "Start Now".GÇ¥

Actually, pass the smelling salts to the board GÇô CanadaGÇÖs high tech leader is adrift, listing badly and the captain has been washed overboard.
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