Tellabs Invests in White Rock
Fulfilling a prediction made in Light Reading early last month (see Tellabs, White Rock Getting Cozier), Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) has invested an undisclosed sum of cash in White Rock Networks (see Tellabs Invests in White Rock). It's also added one of its top executives, senior VP of North American sales Rob Pullen, to White Rock's board and unfurled plans for more comprehensive integration of Tellabs and White Rock products (see Tellabs Invests in White Rock).
At least one analyst thinks it's a harbinger of even greater closeness to come. "I think this is going to evolve into a full pickup in the near term," says Mark Lutkowitz, VP of optical networking research at Communications Industry Researchers Inc. He wouldn't be surprised to see Tellabs acquire White Rock this summer.
Tellabs' spokeswoman Jean Medina won't comment on any possible future deals. White Rock's VP of marketing Andrew Knott says nothing's in the cards "in the near or medium term."
But it's clear Tellabs is banking at least part of its future on the startup. Today's deal builds on an agreement inked early in 2002 (see Tellabs Takes a New Tack), by which Tellabs adds aggregation capabilities to its optical transport gear.
Specifically, Tellabs has OEM'd White Rock's next-generation Sonet ADMs -- the VLX2010 OC48 (2.5-Mbit/s) and VLX2020 OC192 (10-Gbit/s) -- into the Tellabs 7100 optical transport system, renaming the product the Tellabs 7120 access multiplexer, a shelf add-on to the 7100. Tellabs manages the 7120 with its own software.
Tellabs can't specify the customers that have bought its White Rock add-ons, but Medina says Tellabs has realized both sales and "increased interest" in the gear. Clearly, there's been enough interest to justify more development.
Under the new plan, Tellabs will market a customized version of the White Rock VLX2020. "Customized" generally means integrated with Tellabs' management platform, Knott says, although other features are being discussed for future projects.
Tellabs' Medina says the customized gear is available now.
Tellabs also hopes to extend interoperability of White Rock's gear with Tellabs 6400 and 6500 transport switches and its 5500 digital crossconnect. This development effort has just begun.
White Rock and Tellabs say today's news won't affect White Rock's only other OEM agreement -- to integrate its VLX2020 with gear from Mahi Networks Inc. For Mahi, as for Tellabs, White Rock provides DS3 (45 Mbit/s) and OC-n aggregation, linking metro links, such as T3 (45 Mbit/s) and Ethernet connections, to a Sonet backbone.
Mahi's latest product, the Mi7 Optical Transport Switch offers an optional add-on that contains White Rock's gear (see Mahi Swims Into the Metro Core).
Despite speculation last year that Mahi and White Rock might join forces (see Mahi and White Rock: Just Good Friends), CIR's Lutkowitz thinks that's unlikely: White Rock is doing too well on its own. As before, Tellabs won't comment, and Knott of White Rock echoes what he said of a possible Tellabs merger: "I don't see any sign of that happening in the near or medium term."
Well, what about the long term? Knott isn't speaking to that, but it seems too soon to tell, in any case. Tellabs must first decide whether it wants to take on another major startup. While its experience with Ocular has paid off handsomely, there's no assurance history will repeat itself -- especially not in today's depressed telecom market.
— Mary Jander, Senior Editor, Light Reading