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November 7, 2000
Cisco Systems Inc. (Nasdaq: CSCO) has been bold about touting its progress and its competitors' slip-ups in the optical networking space (see Cisco: Boom or Bust? ). But this week the company was uncharacteristically shy in soft-launching two of its most anticipated products to date.
On Sunday, Cisco announced that Cambrian Communications LLC, a Fairfax, Virginia-based carrier's carrier, would purchase a full set of Cisco optical networking products to build its metro and long-haul network.
The announcement makes Cambrian the first announced customer for Cisco’s ONS 15900 Wavelength Router, which it acquired from Monterey Networks, and its ONS 15200 product, which it acquired from Qeyton Systems.
"This marks the first official announcement about the deployment of the 15900 into a mesh, though we've spoken in the past about product trials that have been going on," said Joe Bass, vice president and general manager of the optical networking group. "And this is also our first sale for the 15200."
Good or bad for Cisco? In the sense that it quells the rumor that Cisco had killed the ONS 15900 Wavelength Router project, the news is good. But when considering that the product hasn't yet shipped, while Cisco’s flagship optical product, ONS 15454, now boasts over 400 customers (see Cisco's Optical Shipments Soar), the news on the Wavelength Router isn't stunning.
In fact, it's just another step beyond a long series of delays for the product. In the summer of 1999, the firm then known as Monterey Networks stated it expected to ship its product by the first quarter of the year 2000. In August 1999, however, Cisco acquired Monterey and began integrating the company into its Service Provider Business Unit.
This past August, with no Wavelength Router shipping, Cisco’s group vice president of optical networking, Carl Russo, told attendees at the Opticon conference that Monterey's engineering schedule had be reset to ensure quality, and that he had failed to communicate that to the market (see Cisco's Russo: We're Just Getting Started).
In September, Cisco said that one large carrier, WorldCom Inc. (Nasdaq: WCOM), had completed its initial phase of testing for the ONS 15900 and one startup carrier, Petronet Corp., was testing the product. Cisco then admitted it was doing trials with two different types of customer to prove its product’s viability to the market (see Carl Russo, Cisco ).
Now, Cisco has announced Cambrian, rather than the two previous test customers, as Wavelength Router’s first-ever paying customer.
Of course, how you define a paying customer is very subjective these days. In this case, Cisco is financing at least part, if not all, of $150 million in equipment sales to Cambrian, according to a report in The Washington Post.
Cisco confirmed that Cambrian would install the ONS 15900 Wavelength Router in February 2001. Cambrian says it expects to begin offering services to its customers by the end of the second quarter 2001.
Cambrian says it has tested the Wavelength Router through simulation, because its network hasn’t been built yet.
Cambrian plans to serve markets outside the major metropolitan areas along 254 route miles of a fiber network between New York and Washington D.C. “We think the reason they’re able to [serve smaller markets] and still make money is that they’re building a low cost network when compared to some of the traditional networks out there,” says Joe Bass, vice president and general manager of Cisco’s Wavelength Routing Business Unit.
Cambrian says it's not worried that the ONS 15900 has had some setbacks in the past. "The way we're going to be deploying our network, the capabilities coming from the Monterey product weren't needed early on," says Jose Cecin, Cambrian's chief operating officer. "Based on our network deployment schedule, we're very comfortable with our choice of Cisco."
Of the other products in Cisco’s optical portfolio, the ONS 15200 remains unshipped and won’t officially launch until Spring 2001. Cisco confirmed that the product is in trials with several beta customers now; Cambrian, too, is that product’s first publicly announced paying customer.
-- Phil Harvey, senior editor, Light Reading http://www.lightreading.com
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