Ciena Preps 'CoreDirector 2'
Financial analysts have been asking Ciena about a successor to the CoreDirector, a Sonet/SDH platform used by nearly 50 carriers worldwide, on recent earnings conference calls, referring to the platform as "CoreDirector 2."
But the vendor has been keeping details under wraps. When asked about the new platform during the vendor's fiscal first-quarter conference call earlier this month, Ciena CTO Steve Alexander said that, while the company hasn't made any "go-to-market plans public yet around what you're calling CoreDirector 2," the objective is to extend the scale of the platform and add more functionality. (See Ciena Cuts 200 Jobs as Sales Plummet and Ciena: Carriers Need to Spend Soon.)
Financial analysts are keen to know when the new platform will be commercially available, because revenues from CoreDirector are slipping: In the three months to Jan. 31, 2009, revenues from Ciena's Core Switching line of business (which largely comprises CoreDirector sales) were down about 35 percent year-on-year, to $45 million.
So what does Ciena have in its CoreDirector roadmap?
One optical industry source tells Light Reading that Ciena's new product line will conform to the OTN (Optical Transport Network) standard, also known as G.709 in International Telecommunication Union (ITU) standards parlance, and that it's likely to require a new physical chassis.
Ciena won't confirm those details, though. "There isn't a lot we can say at the moment," states spokeswoman Nicole Anderson, other than that CoreDirector is evolving from a "product to a broader family of solutions," and that will involve "the integration of technology from the 4200 platform."
The CN 4200 multiservice switch has become the star of the Ciena portfolio in recent years as operators moved to deal with an increasing mix of traffic, especially Ethernet. (See Ciena Enhances 4200 With Ethernet.)
Anderson adds that the new platform will have "greater capacity and scalability and support a larger number of nodes, [and have] greater support for data and packet traffic." The 32-slot CoreDirector currently boasts 640 Gbit/s of switching capacity.
The Ciena spokeswoman also confirmed that the new family will be classified as a packet-optical transport system (P-OTS) product. (See Optical's Packet Magic.)
But there's "no time set for a launch, and we're not in a position to talk about commercial availability, though we will be talking about the new family during the coming months," adds Anderson, who says the name "CoreDirector 2" won't be used by Ciena.
While Ciena is still mum on the new platform's availability, at least one financial analyst believes the vendor's already behind schedule. George Notter at Jefferies & Company Inc. believes the successor to CoreDirector was due to be delivered to current customer AT&T Inc. (NYSE: T) during the first quarter of this year.
And while he believes the new product will be a hit with carriers, the analyst is wary of the potential bucks-per-bang ratio of the new platform. In a recent research note, Notter stated: "While we expect the new product will be well received by customers, we're unsure of the economics of the business for Ciena. Relative to CoreDirector, we suspect the CoreDirector 2 will create a significant decrease in revenue for Ciena per unit of switching capacity provided to customers."
Ciena declined to comment on the product's timing or the vendor's relationship with AT&T.
OTN switching and capacity will be key
Heavy Reading senior analyst Sterling Perrin, who tracks the P-OTS market in a quarterly report, the "Packet Optical Market Tracker," believes "OTN switching is a priority" for Ciena's new platform.
The ability to switch OTN traffic is becoming increasingly important as OTN transport gains in popularity, states Perrin, who adds that there's also interest in a sub-lambda OTN standard to handle Gigabit Ethernet (GigE) traffic in the future. "So that's an added benefit of OTN switching down the road," says the analyst.
Perrin also expects the new platform's switching capacity to double from the current 640 Gbit/s. He notes that some major operators currently have multiple CoreDirectors stacked together in major transport hubs, and that "they will want one major product for their hubs, and then they can redeploy the older platforms out at the edge of the network."
Perrin also notes that Ciena has "placed a priority on linking the 4200 and the CoreDirector together, for end-to-end switching. This is part of the firm's new programmable service-delivery engine [PSDE] concept, which was launched in the fall. So, the future iterations of these products will be tightly integrated, we can assume." (See Ciena Expands Portfolio.)
Perrin believes the industry trend that will be followed by the optical switching sector's vendor community is a combination of greater capacity and the introduction of OTN switching. In addition to Ciena's efforts, the analyst believes the other two big hitters in this market, Alcatel-Lucent (NYSE: ALU) and Huawei Technologies Co. Ltd. , will be following the same path.
Huawei says it has already added OTN switching to several of its platforms, including the OptiX OSN 8800 that was announced last September. (See Huawei Raises the Optical Stakes.)
— Ray Le Maistre, International News Editor, Light Reading