Ciena/Nortel Product Plans Revealed

Ciena's switches are still frontline players, but Nortel's OM 6500 gets a surprisingly big share of the limelight

Craig Matsumoto, Editor-in-Chief, Light Reading

March 22, 2010

4 Min Read
Ciena/Nortel Product Plans Revealed

SAN DIEGO -- OFC/NFOEC 2010 -- Ciena Corp. (NYSE: CIEN) will turn Nortel Networks Ltd. 's Optical Multiservice Edge (OME) 6500 into a flagship optical product, while giving its own new 5400 a starring role in its packet-switching plan.

Ciena is revealing its new product strategy today, the first working day after completing the acquisition of Nortel's Metro Ethernet Networks (MEN) assets. (See Ciena Beats NSN to Buy Nortel's MEN, Ciena Closes Nortel MEN Purchase, and Nortel Sells MEN, Loses Man.)

Nortel gets a prominent role in optical transport, and its 40- and 100-Gbit/s technology will overshadow Ciena's. But for the most part, it's Ciena gear that dominates the future plans.

Table 1: Ciena/Nortel Product Plan

Product Area

Focus Products

Also-Rans

Transport

Carrier Ethernet

Packet Optical Switching

Packet Optical Transport

100G

Source: Ciena* Ciena's CN 4200 and Nortel's OM 5200 are being targeted at enterprise applications, managed services, and some metro WDM situations.





The biggest surprise is the retreat of the CN 4200 -- although Tom Mock, Ciena's senior vice president of strategic planning, says the box is being diminished only in scope. It's sold mostly into enterprise and managed-services markets so far, and its new mission (and future R&D) will be mostly limited to those areas.

Still, that's a surprise when it comes to packet-optical transport systems (P-OTS), according to Heavy Reading analyst Sterling Perrin.

"With the OME 6500 positioned as the metro infrastructure line, it will become the combined company’s metro P-OTS play -– a move we did not predict. To us, it appeared that the CN 4200 line was further down the P-OTS path compared to the OME 6500," Perrin writes in a research note issued today.

At OFC/NFOEC this week, Ciena will be showing the 4200 and 6500 managed as a common platform, Mock says.

The big loser in the plan would appear to be the Nortel Metro Ethernet Routing Switch 8600, which takes a back seat to Ciena's own switches, such as the new 5400. (See Ciena Catches Packet/Optical Convergence Bug.)

Older products -- such as Ciena's CoreStream or the Nortel Optical Metro 3500 -- aren't being discontinued, but neither do they figure in Ciena's R&D plans. They'll live on, to serve the installed base. "If a product's already in manufacturing, there's little to be saved by shutting it down," says Mock.

Your 100G vs. mine
Looking over the new roadmap, it's clear Nortel's 40- and 100-Gbit/s technology, based on Coherent detection, was a key part of the deal for Ciena. Perrin speculates that that's why the OME 6000 line is getting such a prominent role.

Ciena had 100-Gbit/s work in progress, too, but it was targeting enterprise needs for low latency and short distance. Those requirements played out in the deployment for the New York Stock Exchange (NYSE) , for instance. (See Ciena Sending 100GE Live.)

Nortel attacked carrier long-haul needs, leading to a coherent DP-QPSK implementation that's been praised by analysts and has been a factor in multiple 100-Gbit/s trials. (See Verizon Switches On 100G in Europe and Telstra Trials 100G With Nortel.)

Ciena's plan is to adopt that technology for shorter 100-Gbit/s reaches.

"The current 100-Gbit/s Ciena's got is going into the applications we've sold, but the primary platform will be the Adaptive Optical Engine from Nortel," Mock says.

On the software front, Ciena wants a common platform, but that doesn't mean migrating Nortel's gear completely to Ciena software. Rather, the plan is to give the products' software similiar attributes, creating a consistency that will help them work together. "In the same way PowerPoint works on a PC or on a Mac."

Ciena does intend to put all its products under the same management tools, and it's going to move the Nortel gear to the OneOS concept of a common, multilayer control plane.

On the personnel front, Philippe Morin, president of Nortel's MEN, will be joining the Ciena executive team, as noted earlier. (See Morin's Plan: Stick With Ciena.)

His role will be significant: He's been put in charge of R&D, manufacturing, and product development -- in short, all of Ciena's products are now in his hands.

Finally, there's the matter of money. One problem analysts had with the Ciena/Nortel combination was the wreckage it might leave on Ciena's balance sheet. (See Nortel's MEN: Winners & Losers.)

But Ciena wound up "in a pretty good position financially," Mock insists.

Ciena issued $250 million in debt with the intention of using it to replace the original debt that was part of its bid for MEN. (The deal specifically allowed this.) The new offering was oversubscribed, so Ciena brought in $375 million, giving the company a cash buffer. (See Ciena Tees Up $250M Notes Sale and Ciena Prices Notes.)

— Craig Matsumoto, West Coast Editor, Light Reading

About the Author(s)

Craig Matsumoto

Editor-in-Chief, Light Reading

Yes, THAT Craig Matsumoto – who used to be at Light Reading from 2002 until 2013 and then went away and did other stuff and now HE'S BACK! As Editor-in-Chief. Go Craig!!

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