Metro 100G data center interconnection deployments are expected to be the talk of the optical sector in 2015, but the rumor mill is getting a little bit of a head start.
Just before Christmas, Cowen & Co. analyst Paul Silverstein suggested Ciena Corp. (NYSE: CIEN) is "highly likely" to win at least part of a deal to upgrade metro networks at Verizon Communications Inc. (NYSE: VZ) to 100G. As reported in Barron's Tech Trader Daily, Silverstein said several vendors, including Alcatel-Lucent (NYSE: ALU), Coriant and Fujitsu Ltd. (Tokyo: 6702; London: FUJ; OTC: FJTSY), could be in the running for that deployment, which probably would be split between two vendors.
To date, Verizon has not said anything about an imminent metro 100G decision. If a deployment decision happens in the coming months, it would not be surprising to see Ciena get part of the deal, since it is already a Verizon supplier and has recently better positioned itself for metro deployments with new products. (See Verizon Hauls 100G on US Grid, Verizon Reminds Us That 200G Exists and Ciena Stirs Up the Metro Market.)
A Verizon metro deal also would be a nice "get" for Ciena following reports its two biggest customers, AT&T Inc. (NYSE: T) and Verizon, were poised to spend less in 2015. After those carrier capex reports surfaced, Ciena remained strangely upbeat about 2015, but might have had a good reason for such optimism if it's close to winning a big metro deal. (See Ciena Looks to Shake Off Capex Concerns and Ciena Upbeat Despite Q4 Loss.)
Alcatel-Lucent, a dark horse winner of Verizon's widely coveted 100G long haul deployment earlier this year, also could be well positioned for a piece of the carrier's metro 100G contract. The vendor had been a long shot to win the long haul contract, but is rumored to have beaten out odds-on favorite Infinera Corp. (Nasdaq: INFN) by offering a deep discount. Fujitsu also has been deployed at Verizon in the past, and Coriant, while something of newcomer by name, still might have a foothold at the carrier through its acquisition of past Verizon supplier Tellabs. (See Analyst: Infinera Loses VZ Deal to AlcaLu.)
Infinera, meanwhile, might still be an outsider looking in when it comes to the two biggest US telcos, but the company did hit its mark earlier this month when it announced that its Cloud Xpress metro platform had begun shipping on time, positioning the vendor for a metro 100G battle that appears to be already under way. (See Infinera Targets Data Center Connectivity Market With Metro Platform.)
Place your bets now.
— Dan O'Shea, Managing Editor, Light Reading