Sycamore's Smith Speaks
"The winners in this business are going to be those companies that can tap an ongoing stream of hardware innovation very quickly, using software infrastructure to introduce it into the network nondisruptively and very, very quickly," he said.
The need for software that can turn dumb optical pipes into intelligent ones capable of delivering a range of money-making services, he said, is "a bar [that] will get raised every single month, every single quarter as time goes on."
So who's got the goods to succeed? When asked to rate leading competitors' optical networking strategies -- including Alcatel SA (NYSE: ALA), Cisco Systems Inc. (Nasdaq: CSCO), Lucent Technologies Inc. (NYSE: LU), and Nortel Networks Corp. (NYSE/TSE: NT) -- he indicated they've got lots of homework to do.
"Some don't have an optical networking strategy, or it's a work in process," he said.
Asked for specifics, he elaborated: "Nortel clearly leads from a market-share perspective. [But] when you get inside, it's fundamentally a Sonet extension strategy. It's certainly driving lots of revenues."
He described Lucent's strategy as full of "holes": "There are lots of smart people in that company and lots of technology, but the question is: Can you harness it in time to address the market that's open in the here and now? You don't have three years for these things to unfold."
On Alcatel: "Up to this point they've been focused primarily on the submarine marketplace, which is fundamentally different in many respects. But some of those skill sets should be translatable in this marketplace."
As for Cisco: "It remains to be seen if Cisco can assemble the properties to drive an effective optical strategy. They'll have to deal with the internal tug of 'the router will do everything' and get to where intelligence is diffused throughout the network."
Conference attendees had mixed reactions to Smith's observations. "I don't think he took the question seriously," said one finance officer, who spoke anonymously.
"I think he was pretty much on target," said Atul Tambe, director of engineering for an optical stealth-mode startup. "I always have my hype filter on, but even so, I think what he said was largely true."
-- Mary Jander, senior editor, Light Reading http://www.lightreading.com