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Redback Lands Deal With Williams

Light Reading
News Analysis
Light Reading
1/29/2001

Redback Networks Inc. (Nasdaq: RBAK) announced this morning that Williams Communications Group (NYSE: WCG) will be deploying its SmartEdgeT 800 multiservice platform in its nationwide network.

The $120 million contract calls for Williams to deploy several SmartEdge platforms in both its metro networks and long-haul networks over the next two years.

"This is a very significant win for us and huge loss for someone else," says Larry Blair, VP of marketing for Redback. "It's a huge vote of confidence for the Smart Edge architecture."

Big deal? Yes. For one thing, this is the largest deal that Redback has sealed to date, according to Blair. Secondly, Williams remains a battleground for several optical networking vendors pursuing the metropolitan market, including ONI Systems Inc. (Nasdaq: ONIS) and Sycamore Networks Inc. (Nasdaq: SCMR). The fact that Redback has gotten its foot in the door is significant.

Most importantly, however, the deal means Redback is a serious contender for some of the business in next-generation Sonet equipment. The market is currently dominated by Cisco Systems Inc.’s (Nasdaq: CSCO) 15454 device, a product that Cisco acquired from Cerent. It's a multibillion-dollar market, and Cisco claims to have raked in $1 billion in sales for its Cerent box over the last 12 months. The SmartEdge platform originated from Redback’s purchase of Siara back in October 1999. Siara and Cerent were related companies formed out of the breakup of a company called Fiberlane. Redback's product provides traditional Sonet/SDH aggregation as well as IP services, says the company. Redback hopes to differentiate its product from Cisco's by adding in a series of IP services on top of the Sonet functions.

-- Marguerite Reardon, senior editor, Light Reading, http://www.lightreading.com

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Scott Raynovich
Scott Raynovich
12/4/2012 | 8:58:40 PM
re: Redback Lands Deal With Williams
did it surprise many that Redback landed a Williams contract?
lanman
lanman
12/4/2012 | 8:58:39 PM
re: Redback Lands Deal With Williams
Not really.. Williams had not made an equity investment in anyone that has a SONET box like Redback, Cerent,etc so they actually looked at the products on their merits. ONI is not in the same space as these products, Sycamore is not and Zaffire is not.

Looks like Redback won this one on their merits, not because WIlliams will profit from an IPO..
victor
victor
12/4/2012 | 8:58:37 PM
re: Redback Lands Deal With Williams
Reports of SONET's death are greatly exaggerated. RBAK has a kick-ass IP ready TDM box with the highest port density in the industry. Obvisuosly, they won this deal based on the quality of their product,the so-called "advanced" solutions from ONIS and SCMR notwithstanding. An all-optical box for metro access market is premature : a report on metro access market over the next few years on lightreading website predicts SONET remaining dominant until 2004. By then, RBAK would have acquired ONIS or Zaffire if they thought they needed an optical box.
jshah
jshah
12/4/2012 | 8:58:37 PM
re: Redback Lands Deal With Williams
I think we should also look at the host of reasons why Gilder picked up ONIS at the cost of the likes of RBAK and CIEN.

From ONIS perspective that so-called acquisition by RBAK after 4 years is a reae-view-mirror technology for ONIS....why it would agree to that acquisition ?

Remember AT&T wanted to acquire AOL few years back ? AOL obviously did not agree. See where does AT&T stands today. That old-gen and
next-gen tech marriage never works.

I will invite any sensible comments on WHY Gilder picked up ONIS at the cost of RBAK and host of other SONET/TDM providers as also next-gen DWDM providers such as CIEN ?

jshah
jshah
12/4/2012 | 8:58:37 PM
re: Redback Lands Deal With Williams
WCG deal with RBAK is not at the cost of ONIS in any way whatsoever.

RBAK is selling sonet/TDM technology while ONIS is purely next-gen DWDM technology which is way ahead in the game.

Did we not already talk about that article "Death of Sonet?"

lightreading
lightreading
12/4/2012 | 8:58:36 PM
re: Redback Lands Deal With Williams
please read post #10 on "Khosla" article chat for a explanation of Gilder's jaded views "all optical".
lightreading
lightreading
12/4/2012 | 8:58:36 PM
re: Redback Lands Deal With Williams
victor obvisouly knows very little about the dynamics of this space.

first, the SmartEdge may be "IP-ready", but unfortunately the "ready" doesn't mean NOW, or for some time. it's currently vapor.

second, even if RBAK wanted to acquire ONIS or Zaffire (which I can garantee they do), they would have a hard time doing it as their current valuation slightly trails that of ONIS.

williams bought ONIS' box a long time ago, so weather or not RBAK sees a need, the customers do - and that's what matters.

the future of RBAK holds one of two possibilities:

a) they continue to fizzle as they are now and end up being eaten by a larger predator, like Juniper, or

b) a miracle happens and they somehow start gaining significant traction with the SmartEdge. the success of the SE determines the fate of this company.

jshah
jshah
12/4/2012 | 8:58:35 PM
re: Redback Lands Deal With Williams
My thanks to LR.

In my opinion the Gilder's drop of cien and adding of onis, although came on the same day, have to be read as two separate acts.

cien is in the long-haul market, onis is more on metro. Perhaps we can say cien and onis are complementing and not at all competing businesses. While onis is more on next-gen last-mile metro DWDM provisioning and optical storage technology cien is in the next-gen long-haul DWDM provisioning.

I feel marriage of onis/cien is more conceivable as they compliment on DWDM long-haul vs metro next-gen tech rather than onis/rbak who dont have any conceivable common platform.

I fully agree with you on the opto-electric coexistance in the near future. But I do see in not so distant future that coexistance will end in favor of all-optical takeover.


karlkole
karlkole
12/4/2012 | 8:58:33 PM
re: Redback Lands Deal With Williams
So you think that an all-optical network is just right around the corner, huh? LOL
I haven't even heard of any discussions yet concerning ISO standards for any potential all-optical networks yet or even what it may look like.
Tiny mirrors? Naturally refracting photonic lens? Who knows. Don't hold your breath concerning Corvis, since the the public hasn't had a chance to review it yet.
Here's the bottom line... Until there is optical fiber going directly into residential homes in large numbers, an all-optical network is & will remain nothing but hype.

Why do you think they call an All-Optical Network the "Holy Grail" of networking?
iprsvp
iprsvp
12/4/2012 | 8:58:32 PM
re: Redback Lands Deal With Williams
"This is a very significant win for us and huge loss for someone else," says Larry Blair, VP of marketing for Redback

--
Who lost the deal any ideas???? I think it
is sycamore.
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