Sycamore Ships Its Optical Switch
Sycamore Networks Inc (NASDAQ: SCMR) http://www.sycamorenet.com announced a whopping contract today – one with a startup carrier, 360networks Inc. (NASDAQ: TSIX) http://www.360networks.com, that could be worth as much as $420 million.
Guess what? The value of the contract doesn’t mean that much. What is significant, however, is that this is Sycamore’s first contract to specifically include its SN 16000 optical switch. Even more significantly, Sycamore says that it's already shipped the first SN 16000s to 360networks, which is rolling out a huge fiber network spanning North America and Europe.
Sycamore’s success in shipping the product – or possibly its announcement of its whopping contract - was reflected in a big rise in its stock price today. By noon it had increased by more than 13 percent, to a little over $124.
Sycamore won't say much about its contract with 360networks. It’s a "multi-year" framework deal according to Jeffry A. Kiel, a Sycamore vice president and general manager. He declines to say how many years and says the $420 million value is merely a target. "There’s no guaranteed amount in the contract," he adds.
The key point about the contract isn't its size or duration, says Kiel. It's that Sycamore has proved that the SN 16000 is now a real working product. "The industry has moved past Powerpoint slides and is shipping products," he says. Sycamore appears to be catching up with the competition, having started late. It only announced the SN 16000 last December, and at that stage it seemed to be a long way behind the three vendors with comparable products – Ciena Corp (NASDAQ:CIEN) http://www.ciena.com and Cisco Systems Inc. (NASDAQ:CSCO) http://www.cisco.com and Tellium Inc. http://www.tellium.com.
Now it looks as though Sycamore might even be overtaking its rivals, judging from comments made by Harminder Gill, director of engineering and planning for 360networks, who evaluated all four vendor’s products.
Gill says that right now, Sycamore is the only vendor that can deliver what 360networks wants – a way of being able to quickly provision STM1 (155 Mbit/s) connections and above, over a global meshed optical network. The key issue is being able to manage the network from end to end, so that 360networks can use its capacity efficiently, offer new types of services and respond very quickly to customer demands.
Out of the four vendors Gill assessed, only Ciena and Sycamore are able to switch STM1s. Cisco and Tellium switch OC-48s (2.5 Gbit/s) channels. In order to use them to offer STM1 connections, 360 networks would have had to use multiplexers, which would have got in the way of having end-to-end management. Cisco is still thinking of its switch as a replacement cross-connect rather than a part of a whole network, according to Gill. “We very quickly realized they weren’t going to take it to an edge to edge solution,” he says.
The choice between Ciena and Sycamore was also straightforward. “On hardware, Sycamore is probably about a month behind Ciena,” says Gill. “But in terms of software and functionality, (Sycamore) is well ahead.” In particular, Sycamore already offers management software that enables operators to automate provisioning of connections over optical backbones. Ciena’s equivalent is still under development, according to Gill.
Gill says that 360networks has already completed evaluating Sycamore’s SN16000 and will start deploying it fairly soon. “Before the end of this year, we’ll have some size of optical mesh in Europe and in North America,” he says.
The speed and scale of deployment impresses Scott Clavenna, principal analyst at Pioneer Consulting LLC http://www.pioneerconsulting.com. "Sycamore did the right thing creating the network emulator, which allows carriers to build simulated 100-node networks in a lab and learn how these switches will operate in their networks before they ever deploy them," he says (see Sycamore Demos Software Scalability).
Clavenna adds that he's puzzled by the absence of Nortel Networks http://www.nortelnetworks.com in Gill's line-up. "I understood it was intending to supply 360networks with its OPTera Connect optical switch product," he says.
The contract with 360networks could mean that Sycamore beats Ciena and Cisco to the punch in carrying live traffic on its switch.
Seven carriers are already conducting trials of Ciena's CoreDirector switch, the result of its acquisition of Lightera, according to Suzanne DuLong, Ciena's VP of investor relations. Commercial shipments will start this month (July), she adds.
Cisco says that its switch, coming from its acquisition of Monterey Networks, is undergoing trials at "three to five large carriers." So far, it hasn't named any of them, and at least one analyst is skeptical. "I'm only aware of Cisco having one switch in one trial and it's been going for some time,"says Christopher A. Nicoll, director of infrastructure analysis at Current Analysis http://www.currentanalysis.com
Tellium has already announced commercial deployment of a small version of its switch, which is also resold by Lucent Technologies Inc. http://www.lucent.com. It wasn’t available at press time to give further information. .
By Peter Heywood, international editor, Light Reading http://www.lightreading.com