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DWDM

Tellabs Takes a New Tack

Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) announced today an original equipment manufacturer (OEM) agreement with startup White Rock Networks, through which the two firms will codevelop an optical transport product to be sold by Tellabs (see Tellabs Integrates With White Rock).

Under the terms of the agreement, Tellabs will combine White Rock Networks' VLX2010 OC48 (2.5 Mbit/s) and VLX2020 OC192 (10 Gbit/s) Sonet add/drop multiplexers (ADMs) into the Tellabs Titan 6100 dense wavelength-division multiplexing (DWDM) system; and Tellabs will manage, market, sell, and support the integrated product, which will be available in June 2002.

The move offers more evidence of a big strategy shift underway at Tellabs. In the past, Tellabs has tried to build its technology in-house. But the company, which dominates the digital crossconnect market with its Titan 5500, has now shifted toward acquisition and outside partnership in the next-generation optical area, after struggles with its own next-generation products (see Tellabs Pulls a Switch). Just last month, for example, it finalized the deal to buy Ocular Networks (see Tellabs Nabs Ocular).

"I think this is an admission on the part of Tellabs that startups can produce next-generation products quicker than they can,” says Michael Howard, principal analyst and cofounder of Infonetics Research Inc..

The Tellabs marketing team agrees that the strategy has changed.

“The key message we want to get out there is that we are doing whatever it takes to enhance our products as quickly as possible," says Brent Schnell, strategic alliance manager for Tellabs. “This is just one way we can do that. You’ve heard of 'build or buy'? Well, we are taking a third approach -- partnering.”

The White Rock technology to be integrated with the Titan 6100 chassis will enable the product to aggregate traffic at OC3 (155 Mbit/s) and OC12 (622 Mbit/s) speeds and add Sonet connectivity. It will also enables the Titan 6100 to offer 10-Gbit/s support. It currently only handles 2.5-Gbit/s speeds and doesn’t aggregate slower traffic types.

The Sonet ADM features give Tellabs more ammunition against its competitors. For example, ONI Systems Inc. (Nasdaq: ONIS) has already announced ADM integration in its metro transport product (see ONI Announces Sonet/SDH ADM and ONI's Got a New Mux). Other competitors also offer separate ADM products. Ciena Corp. (Nasdaq: CIEN) will soon be out with these features from its Cyras acquisition. And Nortel Networks Corp. (NYSE/Toronto: NT) also has a separate Sonet ADM.

"This seems to be the direction a lot of these companies are moving in," says Mark Lutkowitz, vice president of optical networking research at Communications Industry Researchers Inc. (CIR) "ONI is the biggest competitor [with the Tellabs 6100]. Maybe Tellabs feels it has to keep pace with them.”

At first glance, the announcement with White Rock looked as if it might overlap with the product Tellabs acquired from Ocular. But experts say that the two products fulfill different requirements.

“Tellabs bought Ocular for the digital crossconnect functions,” says Infonetics' Howard. “The White Rock product is a real compact ADM. They are completely different.”

Currently, the agreement only allows Tellabs to integrate the White Rock product into the Titan 6100 and does not permit Tellabs to sell the box separately. But both Tellabs and White Rock say the agreement could change in the future.

There is also some speculation that Tellabs may eventually acquire White Rock Networks. Andrew Knott, vice president of marketing for White Rock says he has no knowledge of any acquisition talks so far.

“I can’t speak to any future mergers or acquisitions,” says Tellabs' Schnell. “There is nothing in the agreement we have signed that speaks to that. The future will bear what the future will bear.”

— Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com
flanker 12/4/2012 | 10:58:15 PM
re: Tellabs Takes a New Tack You can joke about TLAB's technology all you want, but they are the only vendor with an uptick in revenues this last quarter. Tellabs has outgunned Ciena 3:1 in q4 revenues.

Plus, Whiterock doing an OEM with Tellabs is a sign that not all start-up CEOs are brain~dead. Is Whiterock using narrow or wide band optics?






gea 12/4/2012 | 10:58:09 PM
re: Tellabs Takes a New Tack The article stated that the Tellabs 6100 only handles OC-48. That's not accurate. The 6100's transponders are 3R and multirate, able to handle OC-3/12/48 and GbE. It does not, however, allow for TDM-type muxing.
high plains drifter 12/4/2012 | 10:57:48 PM
re: Tellabs Takes a New Tack could someone tell me in a nut shell the functionality and of the white rock product? all I've really heard is that it's a small ADM. I'm having a hard time seeing the compelling value proposition for an ADM that is just a little smaller. someone please educate me, thanks.
mesolithic 12/4/2012 | 10:57:46 PM
re: Tellabs Takes a New Tack For those who may have missed it also last week (after all, the press announcement was released in German on LR) Tellabs are also using Pandatel DWDM equipment in their boxes also. Strange that I didn't see an english announcement
WRNfan 12/4/2012 | 10:57:43 PM
re: Tellabs Takes a New Tack Sorry for the double post.

<the 12="" 3r="" 48="" 6100="" 6100's="" able="" accurate.="" allow="" and="" are="" article="" does="" for="" gbe.="" handle="" handles="" however,="" it="" multirate,="" muxing.="" not="" not,="" oc-3="" oc-48.="" only="" stated="" tdm-type="" tellabs="" that="" that's="" the="" to="" transponders="">


The article also doesn't accurately reflect WRN's abilities. Their box aggregates not only OC-3 and OC-12, but is a killer at protected DS3 aggregation.


And from high plains drifter:
<i'm a="" adm="" an="" compelling="" for="" hard="" having="" is="" just="" little="" proposition="" seeing="" smaller="" that="" the="" time="" value="">

Just a little smaller? Have you not seen this box? It is not just a little smaller; it is as small as you can possibly make it.</i'm></the>
WRNfan 12/4/2012 | 10:57:43 PM
re: Tellabs Takes a New Tack <<the 12="" 3r="" 48="" 6100="" 6100's="" able="" accurate.="" allow="" and="" are="" article="" does="" for="" gbe.="" handle="" handles="" however,="" it="" multirate,="" muxing.="" not="" not,="" oc-3="" oc-48.="" only="" stated="" tdm-type="" tellabs="" that="" that's="" the="" to="" transponders="">>


The article also doesn't accurately reflect WRN's abilities. Their box aggregates not only OC-3 and OC-12, but is a killer at protected DS3 aggregation.


And from high plains drifter:
<<i'm a="" adm="" an="" compelling="" for="" hard="" having="" is="" just="" little="" proposition="" seeing="" smaller="" that="" the="" time="" value="">>

Just a little smaller? Have you not seen this box? It is not just a little smaller; it is as small as you can possibly make it.</i'm></the>
Regular Joe 12/4/2012 | 10:57:28 PM
re: Tellabs Takes a New Tack First of all, to high plains drifter -- great name.

Now on to the article:

GǣTellabs bought Ocular for the digital crossconnect functions,Gǥ says Infonetics' Howard. GǣThe White Rock product is a real compact ADM. They are completely different.Gǥ

Like most analysts, this guy needs to pull his head out of his fourth point of contact. The Ocular product concept (and I stress concept as I never actually saw a product) was exactly an ADM. All next generation ADMs are supposed to have non-blocking crossconnect functions, that is what makes them "next" generation.

What this press release tells me is that Tellabs bought Ocular because WRN was asking for too much money for a company with no product at the time. With WRN now shipping product it looks like Tellabs has bet on the wrong start-up again...

Anyway, cool name hdp. We should all be as cool under pressure as Clint during these tough times.
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