Ciena Wants WaveSmith for $170M

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zettabit 12/5/2012 | 12:15:49 AM

re: Ciena Wants WaveSmith for $170M Ciena going after RPR would not be the greatest of strategies ... so they will probably do it.

RPR's real benefit is a an add-on to existing incumbent SONET/SDH boxes, so it mainly benefits the likes of Lucent, Fujitsu, Alcatel, Nortel. In that case carriers can add a data-centric blade onto their EXISTING infrastructure, manage it over their existing network and OS, and still get the stat mux efficiencies and CoS options required of a cost-effective data service platform.

However in a greenfield application (Ciena does not have ANY SONET/SDH installed base) it does not make sense to do a new box deployment of RPR systems, and Optical Ethernet solutions like Atrica's, Riverstones, etc... provide a better data service platform.

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puddnhead_wilson 12/5/2012 | 12:15:48 AM

re: Ciena Wants WaveSmith for $170M from the press release: "CIENA expects the transaction will be accretive to its 2004 earnings." Now, is that a comment on the good prospects for WSN, or poor ones for the rest of Ciena???

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puddnhead_wilson 12/5/2012 | 12:15:48 AM

re: Ciena Wants WaveSmith for $170M http://www.ciena.com/news/2003...

38m shares, plus assuming options. price $158m net of the orginal investment CIEN made, so $170m was not too far off. No cash involved apparently, all stock dilution. they are going to do a call in 20 minutes.

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tired 12/5/2012 | 12:15:46 AM

re: Ciena Wants WaveSmith for $170M Zettabit said:
"RPR's real benefit is a an add-on to existing incumbent SONET/SDH boxes, so it mainly benefits the likes of Lucent, Fujitsu, Alcatel, Nortel. In that case carriers can add a data-centric blade onto their EXISTING infrastructure, manage it over their existing network and OS, and still get the stat mux efficiencies and CoS options required of a cost-effective data service platform.

However in a greenfield application (Ciena does not have ANY SONET/SDH installed base) it does not make sense to do a new box deployment of RPR systems, and Optical Ethernet solutions like Atrica's, Riverstones, etc... provide a better data service platform."

My limited understanding of RPR is that it is useful on greenfield markets as well - especially those where no existing Sonet infrastructure exists and the traffic is primarily Ethernet. That is because one can put 10GE etc. and provide higher utilization of the ring as well as protection which is now provided by RPR instead of Sonet.

If that is correct, companies like Lantern would actually be very useful to companies like Ciena in the greenfields (Europe/Asia especially), more so if Ciena expects more Ethernet traffic in the future carried over Sonet-friendly packet technologies.

Does that make sense?

Thanks in advance!

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zettabit 12/5/2012 | 12:15:43 AM

re: Ciena Wants WaveSmith for $170M tired,

I agree that a carrier doing a new greenfield metro build could consider a new RPR based system.

However, since Nortel, Fujitsu and other SONET/SDH vendors all also offer RPR or something similar, in that case the decision becomes more one of which ADM/RPR vendor is chosen, as opposed to RPR providing a distinct advantage.

The problem for Ciena is that as far as North American and Europe, all the key customers (RBOCs and PTTs) already have a metro transport infrastructure, so the name of the game is more one of leveraging the installed based with RPR blades on existing ADMs. It is much harder to prove in a new box for RPR in parallel to, or feeding into, an existing SONET/SDH ADM.

As far as Asia, the wide amount of new builds helps. But take Luminous for example. Their greatest market success has been in Asia, and they are still a distant player behind Huawei, ZTE, NEC, Nortel, Siemens and others in terms of market share.

Biggest challenge for Ciena is that have ZERO installed base within RBOC and PTT networks, so they must rely on a new technology or services discontinuity to get them in. That will be tough in the near term, and I think a company like Atrica would get them there much faster than Lantern or other RPR player like Luminous.

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whyiswhy 12/5/2012 | 12:15:39 AM

re: Ciena Wants WaveSmith for $170M What about Chad Dunn did I miss? Founder, recently let go....???

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Litewave 12/5/2012 | 12:15:35 AM

re: Ciena Wants WaveSmith for $170M The problem is that they partnered with Ciena. I think Ciena is run by an absolute bafoon.

Is that SCMR sourgrapes talking? ;-)

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good deal 12/5/2012 | 12:15:30 AM

re: Ciena Wants WaveSmith for $170M >>>Watch the Wavesmith team bail in exactly one year following the transaction.

Why wait.... rumor has it that Tomi boy and friends will leave with substantial packages as soon as the deal closes. Not bad for a few months of "work".

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Route_495 12/5/2012 | 12:15:29 AM

re: Ciena Wants WaveSmith for $170M
dunn was the real deal. we weren't dragging HIS head around in the street hitting it with shoes after. wish we could've done that with the others...

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Thanatos 12/5/2012 | 12:15:27 AM

re: Ciena Wants WaveSmith for $170M Hey Good Deal - success breeds envy, eh sport?
Put your career accomplishments up against Tomi boy and see how well you compare. Or just keep hiding behind your screen name and spewing your nonsense, you little puke.

Congratulations to WaveSmith - job well done. A bit of hope for the industry...

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