Ciena is expecting automation to help grow its software role in 2018 -- CEO Gary Smith said on the company's earnings call Thursday -- but with a focus on mechanizing existing operator processes rather than moving into a fully virtualized network environment.

Smith said that operators have been asking about using Ciena Corp. (NYSE: CIEN)'s Blue Planet software as a way to automate, but in a specific way. "More about domain management and orchestrating existing processes," the CEO said on the call.

Virtual orchestration, using SDN and NFV, is not quite ready for prime time yet, Smith suggested. "It's a nascent market," he said. "Still, frankly, not mature enough." Blue Planet will "grow" in the market via a "beach head" of "analytics and pro-active analytics," the CEO stated.

"Even while the industry ecosystem to drive network automation is still developing, we continue to believe that Blue Planet will serve as a competitive differentior," Smith stated.

The Blue Planet software business generated over $160 million in revenue in 2017. Ciena is targeting growth of 14% to 16% over the next three years for the software businesses, making it the business that will grow fastest over that period.

This is part of why Ciena is expecting to spend, through acquisition if necessary, to grow its software chops. CFO Jim Moylan said on the call that Ciena could rely on M&A to expand into "vertical" market and for "the expansion of our software capability to support Blue Planet.”

The optical business stills represents "the majority of our current addressable market," according to Smith. Even in that market, automation is starting to play a role, he noted. "Highlighting our ability to automate the network," he said, "is Liquid Spectrum," which combines WaveLogic Ai, a reconfigurable photonic layer, and the Blue Planet software, to create a "capacity-on-demand" system.

"We are seeing very high levels of interest in this solution," Smith stated.

Overall, CFO Moylan said Ciena expects full-year revenue for fiscal 2018 to come in at $625 million to $655 million. The comapny expects that revenue will grow between 5% to 7% overall over the next three years.

"We believe that we are the only Western systems vendor that is both growing and profitable," Smith said.

For the fourth quarter of fiscal 2017, the company reported earnings up 0.8% to $48.5 million, on revenue of $744.4 million, up from $716.2 million last year.

Ciena shares are trading down 3.54% at $20.42 on Thursday afternoon.

— Dan Jones, Mobile Editor, Light Reading