Sycamore: Sick No More?

While the rest of the industry is talking about the metro, Sycamore Networks Inc. (Nasdaq: SCMR) is making announcements about its ultra-long-haul product.

This morning the company announced that KPNQwest NV (Nasdaq/Amsterdam: KQIP) plans to use the SN 10000 in a section of the provider’s 20,000 kilometer European network (see KPNQwest Goes With Sycamore). It also announced several enhancements to the SN 10000 product.

No dollar amount was given with regard to the contract, but Sycamore executives say that the gear is already being installed in the KPNQwest network and will be recognized as revenue this quarter. The product is being used in KPN’s 4,500km Nordic ring and will carry roughly 100 terabits of capacity across six cities, including Stockholm and Helsinki. The ring will connect to KPNQwest’s European network, which spans 44 cities; it will also connect to 150 cities on Qwest Communications International Corp.’s (NYSE: Q) North American fiber ring.

In some respects, KPN appears to be following in the footsteps of another Sycamore customer, Utfors AB, which is also rolling out a Nordic network (see Gigabit Ethernet Goes Carrier Class). Utfors' CTO, Sten Nordell, recently told Light Reading that Sycamore's SN 10000 had helped Utfors offer large amounts of bandwidth and undercut rivals on the Stockholm-Helsinki route by eliminating the need for intermediate amplifiers.

Sycamore says there is no relationship between the Utfors and KPNQwest contracts.

The contract with KPN is an important win for Sycamore, which has been hit hard by the capital spending crunch. It has seen key customers like 360networks Inc. (Nasdaq: TSIX; Toronto: TSX.TO) fold (see 360networks Calls It Quits). And its contract with Williams Communications Group (NYSE: WCG), a staple in its revenue stream, is coming to an end. The company’s stock price has been trading at around $6 a share, a far cry from its highs a year ago, when it was around $165 a share. The company has made some headway with incumbent carriers like BellSouth Corp. (NYSE: BLS), but adding KPNQwest, a top-tier, well-funded European provider, is a key win.

“They desperately need contract wins right now,” says Alex Henderson, an analyst with Salomon Smith Barney. “And they needed a win of this caliber. It could go a long way in getting them some momentum in the long-haul space, especially in this environment when no one is buying long haul.”

Sycamore also announced several enhancements to its SN 10000 ultra-long-haul product to make it more palatable for service providers. The SN 10000 was announced back in September 2000 (see Sycamore Goes the Distance (At Last) ). Primarily, it competes with other ultra-long-haul products from Nortel Networks Corp. (NYSE/Toronto: NT), Fujitsu Ltd. (KLS: FUJI.KL), Ciena Corp. (Nasdaq: CIEN), and Corvis Corp. (Nasdaq: CORV). Analysts say they have been expecting these enhancements for the past few months.

So what’s different? Specifically, the upgrades aim to reduce carriers' operational costs. For one, its OC192/STM card has been made more dense. Previously, Sycamore's OC192 interface would take up two slots in a 32 slot chassis. But now, an OC192 interface only takes up one slot, allowing providers to pack in 32 interfaces into a 3.5 ft. chassis. And with two chassis per 7 ft. rack, that adds up to 640 Gbit/s per bay. This greatly reduces the product footprint, saving space and power consumption costs.

Sycamore also announced its super FEC (forward error correction) implementation, which adds data to the original traffic payload at the transmitter to enable the receiver to repair corrupted bytes. Essentially, this feature extends distance and wavelength capabilities by reducing the corruption level of the signal. Compared to other FEC implementations that only provide a 10 to 25 percent gain, Sycamore claims its version provides a 50 percent improvement in optical performance.

Sycamore has also added unlimited add/drop capabilities that allow wavelengths to be dropped at any time, anywhere on the network. This is different from other ultra-long-haul systems that require expensive regeneration at add/drop sites, says Mike Anderson, director of product management for transport products at Sycamore.

The final enhancement is an automated power balancing system that allows wavelengths to be turned up without a truck roll. This cuts wavelength provisioning time down from about 30 days to only 15 minutes.

The new features will be rolled out over the next two months, says Anderson.

- Marguerite Reardon, Senior Editor, Light Reading

Movers and shakers from more than 100 companies – including Sycamore Networks – will be speaking at Opticon 2001, Light Reading’s annual conference, being held in San Jose, California, August 13-16. Check it out at Opticon2001.

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