Cyan Trumps Cisco, AlcaLu in Stimulus Deal

Packet-optical startup Cyan Optics Inc. has beaten out Alcatel-Lucent (NYSE: ALU) and Cisco Systems Inc. (Nasdaq: CSCO) to provide the optical transport for a Clearwave Communications buildout partly funded by Recovery Act money.

The buildout will also include routers from Juniper Networks Inc. (NYSE: JNPR), which has invested in Cyan.

Clearwave landed $31.5 million in Broadband Technology Opportunities Program (BTOP) funding as part of the Broadband Stimulus Program and $11.3 million in matching grants from the state of Illinois to construct a regional data center and lay 740 route miles of fiber.

Why this matters
Cyan has announced deals with carriers such as Buckeye CableSystem and Great Plains Communications Inc. , but most of its customers have been enterprises. This deal is a sign that Cyan's products, which combine packet and optical transport under one management system, can catch on with carriers.

Teaming up with Juniper has proven successful in the stimulus awards, even though the two companies sell and bill separately, says Frank Wiener, Cyan's vice president of marketing. "When we realized they were looking for routing capabilities, we were able to bring Juniper in and collaboratively show them the broader possibilities," he says.

Clearwave President Scott Riggs says Clearwave picked Cyan over Cisco (which was the neck-and-neck runner-up) and AlcaLu because Cyan's Z-series could support multiple transport technologies, including Ethernet, Sonet, OTN and DWDM -- and because of the support the vendor offered, to help monitor and manage the network. Price wasn't a deciding factor.

"It was an overall type decision, because this is a partner for a long period of time for us," Riggs says.

On the router side, Riggs says Juniper's technology is "quite frankly one of the best in the industry -- they have a higher-end type product for commercial type service that is second to none."

The Cyan part is interesting, but it's a big deal for Clearwave, which Riggs says is likely to double in size to 60 employees. Clearwave will go from offering local business services on leased lines to operating a statewide fiber-optic network, linking 23 counties in the downstate region and 232 anchor institutions. Clearwave will be offering fiber to the door for the anchor institutions and for some businesses as well, retaining its focus on business services and not moving into the consumer realm, according to Scott Riggs, the company's president.

Clearwave plans to start construction in February at the latest and expects to complete the project by December 2012, well ahead of the mid-2013 Broadband Stimulus deadline.

For more
Here's how Cyan's story has tracked so far. And here's our 2009 interview in which Cyan CEO Mike Hatfield explains his company.

— Carol Wilson, Chief Editor, Events, Light Reading

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