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Dino DiPerna, VP of Transport and Switching R&D at Ciena, led the team that saved Nortel's optical group. Julie Oliver / Ottawa Citizen
on the time, it gave the impression the area changed into ending.
Lehman Brothers’ funding financial institution had filed for bankruptcy on Sept. 15, 2008, triggering a worldwide economic crisis. The subsequent evening, Dino DiPerna – the pinnacle of R&D for Nortel Networks’ optical networks neighborhood – changed into making an attempt to chill out in his Boston lodge room when he received a call from his boss, Philippe Morin. an extra shock. Morin told his colleague their group could be put up for sale right here morning.
DiPerna — a protracted-serving veteran of this unforgiving business – knew there can be fallout, a lot of it. indeed, Nortel’s opponents misplaced no time spreading vicious gossip in regards to the weaknesses inside. They claimed Nortel’s optical enterprise had been starved of substances, its engineering ability drained away. These and different rumours multiplied in January 2009 when Nortel sought the coverage of bankruptcy courtroom.
DiPerna knew the gossip, most of it, wasn’t actual. however to convince Nortel’s clients, he and his colleagues logged a whole bunch of lots of miles to reassure them in adult. one more equally essential mission become to evade competitors from poaching Nortel’s ultimate engineers.
“I’m proud to say they bought very few of their americans in the end,” DiPerna says. “we've a way of life of sticking it out via difficult times, a perception in ourselves, in their skill to innovate.”
The stretch of immense uncertainty produced an sudden advantage.
“It became us towards everyone,” DiPerna adds, “and it made us more advantageous.”
more to the point, DiPerna’s optical products neighborhood – referred to as Metro Ethernet Networks – became a totally sought property.
On March 19, 2010 – more than a 12 months into Nortel’s gut-wrenching chapter – Maryland-based mostly Ciena shelled out $774 million US to purchase the Metro Ethernet Networks unit.
The minute it did, the trade gossip stopped and a gruelling multi-year integration of the two agencies started.related
Now, at last, the payoff is obvious.
For the past year, Kanata commuters were treated to the infrequent sight of a major new excessive-tech campus beneath development alongside Terry Fox force just west of March road.
Ciena employees are moving in waves from Nortel’s longtime base at Carling Avenue and Moodie drive in the west end of Ottawa. the primary neighborhood is filling an adjoining one hundred seventy,600 rectangular-foot facility at 5050 Innovation Dr. in the past developed through BlackBerry however not ever occupied. starting in January, the rest of the Ciena employees will circulate into two new towers on Terry Fox force — comprising an additional 254,300 square ft of leased space.
by the time the brand new Ciena assignment is accomplished, undoubtedly in September 2017, the cluster will apartment about 1,600 personnel — confirming the business’s popularity as the vicinity’s second-largest know-how corporation after Nokia.
more essential than the measurement of the Ciena campus is its function: a majority of the company’s global R&D is carried out here. And when it comes to optical expertise — the excessive-pace core of today’s cyber web — Ciena is the No. 2 supplier on earth at the back of China’s Huawei, and No. 1 in North the usa.
“It changed into the deal of a lifetime,” says James Frodsham, Ciena’s chief approach officer — and the man in can charge of buying different enterprises.
however took a lot more than one dangerous wager to make this combo work. It required a collection of them – by means of Ciena and Nortel alike. this is the story of how they did it.
if you need to understand why Ciena survived and Nortel didn't, the top-rated beginning point is February 2001 – the month the telecom trade’s foundations cracked. On Feb. 9, Ciena achieved the sale of convertible debt and 11 million shares for a net payoff of $1.6 billion US. The Maryland company bought in barely beneath the wire. Six days later, Nortel published its revenues would sluggish — the primary of many such announcements that year.
by way of the end of 2001, Nortel would record annual earnings of simply $17 billion compared to its usual forecast of $forty billion. with no conclusion in sight to the revenue slide or the multi-billion dollar annual losses, Nortel now not had the alternative of shoring up its steadiness sheet with the aid of issuing shares to buyers. no person become fascinated.
Former Nortel Campus on Moodie Dr. Chris Mikula / Ottawa Citizen
The enterprise’s failure to promote shares when it turned into flying high would depart it fatally inclined all over the 2008-09 international monetary disaster.
It become a a good deal distinctive circumstance at cash-wealthy Ciena, which in 2001 had the flexibleness to be artistic. The business reached that place now not because it became terribly prescient — infrequently anybody within the trade saw what turned into coming that 12 months. besides the fact that children, Ciena simplest had round six years of operations beneath its belt at the time. It changed into very a lot a startup, and very conscious of the deserve to raise money when conditions authorised. And so it did.
From 2001 to 2004 — the telecom industry’s “nuclear winter” — Ciena shelled out more than $2 billion to acquire five networking technology consultants, together with Akara and Catena Networks from Ottawa. through these purchases, Ciena significantly broadened its product traces.
“if you get these periods of top notch uncertainty, chance and dislocation, it’s a chance to trade the online game,” Ciena CEO Gary Smith says. “We positioned some very significant bets but i'd say they have been calculated.”
At Nortel’s Metro Ethernet Networks unit, equally massive dangers were being meditated. but these have been caused by desperation as opposed to probability.
Nortel shoppers comparable to Qwest Communications and Verizon radically pared returned orders for communications apparatus beginning in 2001. That’s when DiPerna and his engineering team knew that they had a huge problem — rather other than the loss of revenues.
The problem become can charge: their products were high priced to provide, whatever that hadn’t mattered all through the telecom boom. but now it did.
Nortel had gained the late 1990s international race to produce an optical transmission know-how in a position to pushing records during the information superhighway at speeds of 10 billion bits per second (10 gigabits). Bumping up the pace in next-technology techniques (40 gigabits) down a similar path of know-how would require the use of greater-first-rate optical fibre and high priced items of equipment to regenerate indicators.
not most effective had been valued clientele now unwilling to pay for these technical enhancements, they still wanted bigger speeds as a way to accommodate the turning out to be use of online video and different digital traffic.
DiPerna and his group spent months brainstorming in conjunction with specialists in wireless technology and electro-optical devices. They reached a fateful conclusion. in place of force valued clientele so as to add high priced new optical techniques, they'd create know-how for considerably increasing the potential of latest optical fibre — whatever that demanded multiple technical breakthroughs. The crew wasn’t sure it could be carried out.
The engineers shrank analog-to-digital converters and utilized digital sign processing in exciting ways. They used these constructing blocks to design a brand new forty-gigabit chip, which they unveiled in 2005 and commenced testing it right here year. This, in flip, shaped the coronary heart of the 40-gigabit optical gadget — which Nortel introduced in March 2008. That turned into just six months before DiPerna learned Nortel would put his Metro Ethernet Networks unit up for sale.
however changed into adequate. the brand new 40-gigabit device — dubbed digital coherent optical — was becoming the trade’s new ordinary for sending records along the web’s backbone. “We wager every little thing on coherent,” says DiPerna, “That’s what kept us going through the 2000s.”
ownership would soon flow from Nortel. but the first rate news turned into digital coherent technology gave the Metro Ethernet Networks unit some true price.
Ciena turned into one of the crucial first competencies consumers to express interest in purchasing it.
“We’d been hunting for a long time at Metro Ethernet, specially a technology called coherent,” Ciena’s Gary Smith says. “These guys have been means forward of us.”
Ciena CEO, Gary Smith, offers a presentation on the convergence of Nortel and Ciena to former Nortel personnel from Ottawa and Montreal in 2010. THE OTTAWA CITIZEN
James Frodsham — a Ciena government since 2005 and a former Nortel supervisor — led the examination of Metro Ethernet Networks. He was customary with Nortel’s optical technology group and knew what they have been in a position to doing. What neither he nor his boss Smith might make certain about turned into the satisfactory of Nortel’s product line. When Nortel turned into dropping buckets of cash all through the telecom crash, simply how a whole lot cash had been withheld from R&D? And which tasks had been hurt essentially the most?
here is what they found: “Philippe and Dino needed to an excellent extent included the assets and the team from frankly all of the trauma and mismanagement at the desirable within the broader Nortel,” Smith says. “they had managed to shoestring investments collectively and kept the talent. It changed into a large surprise.”
DiPerna’s huge fear was that Metro Ethernet Networks can be offered to a firm interested best in ingredients of the product portfolio — ensuing within the breakup of the unit and its 2,000 plus employees. yet another damaging result, at the least from his factor of view, would have considered Nortel’s optical group disappear into the underbelly of a huge multinational.
“If we’d been purchased by using a large enterprise like Ericsson, Alcatel-Lucent or NSN (Nokia Siemens Networks), they would were just a trifling a part of a large desktop,” DiPerna observes. “That’s not who they are.”
When Ciena prevailed in the bidding for Metro Ethernet Networks in 2010, DiPerna’s considerations weren’t entirely allayed. earlier than the telecom crash, Nortel and Ciena had competed at once in promoting optical techniques. What if Ciena become buying Metro Ethernet Networks quite simply to strip it of know-how then shut it down?
Smith and Frodsham soon reassured him. during the nuclear iciness the two establishments had focused on very distinct materials of the optical know-how puzzle. while Nortel had focused on core, long-haul optical methods, Ciena had acquired lots of the other pieces linked to high-pace networking. while there was still some overlap, the agencies complemented each and every different more than Diperna had expected.
James Frodsham, Senior VP and Chief strategy Officer of Ciena speaks at the respectable floor breaking of the brand new Ciena buildings in Kanata North in 2015. Jean Levac / Ottawa Citizen
This supposed merging the businesses’ operations was slightly more convenient than it might were, but the costs — and hazards — had been nonetheless huge. Ciena estimates it spent pretty much $200 million on integration and restructuring expenses ranging from consulting prices to severance expenses.
Nor turned into the economic system amazing. Ciena’s revenues in 2009 had slipped to $653 million from $902 million the previous 12 months and have been improving slowly. The loss in 2009 had topped $580 million compared to a previous year earnings of $39 million.
“The financial backdrop was pretty tepid,” Smith says, “so it took us a little longer than their preliminary plan called for” to make the buy of Metro Ethernet pay off.
certainly, Ciena lost funds for six straight years until 2015 when, ultimately, the enterprise posted a small income of $12 million on earnings of $2.4 billion. but the pieces are finally falling into vicinity.
along with its acquisition ultimate yr of Cyan — a California-primarily based networking software professional — Ciena’s items today direct site visitors along the cyber web’s densest routes. A consensus forecast organized by way of Thomson Reuters suggests Ciena’s revenues will develop practically seven per cent this yr and 15 per cent in 2017 to reach an estimated $3 billion, paced by using increased orders for swifter optical apparatus and connected utility.
As Ciena continues buying other firms, the relative contribution of the company’s 1,600 Kanata personnel will slash somewhat. As of final October, the business employed 5,345 globally in comparison to 4,300 in 2011. however, there is little denying the magnitude of the Canadians in the supplier.
The old Ciena and Nortel product lines have converged and the company’s engineers are busy collectively reinventing networking expertise in optical techniques, software and functions. The enterprise claims 70 per cent of its patents filed considering it acquired Nortel’s Metro Ethernet Networks unit include as a minimum one Canadian inventor.
Ciena gear is now processing video and facts via optical fibre at speeds of four hundred billions bits per 2nd — in reside networks the existing state of the artwork is 200 gigabits.
“In complicated times they needed to select and choose what they concentrated on,” says DiPerna, “but they on no account took their eye off innovation.”connected
In Ciena, he found a company that has for sixteen years maneuvered correctly throughout the publish-telecom crash and a global economic crisis — transitions that Nortel failed. He also discovered a company willing to collaborate together with his engineers, and never treat Kanata like a department plant R&D store.
Will the formulation continue to work? This area has viewed too many awesome failures in high-tech to answer this definitively. the sector is readily too aggressive. “here's not an business the place you let up,” Frodsham concurs.
When the excessive-tech world crashed after 2000, peak annual earnings at Ciena slumped from $1.6 billion to less than $300 million. At Nortel, revenues within the optical unit collapsed from $10 billion to just $1.5 billion. Losses at both operations have been awesome.
seen during this mild, Ciena and Nortel’s optical community beat the chances effectively via surviving. That they went on to jointly build a firm that claims first or 2nd spot in most of its product strains is all the extra remarkable.
“americans like readability in case you do these styles of mergers,” says Smith, “We’ve invested heavily in R&D and run the enterprise for the lengthy-time period — the effects have frequently superior.”
It’s the kind of steadiness and religion in the enterprise’s personal ability that Nortel’s desirable executives had abandoned all over their enterprise’s heyday. extra challenges loom as Ciena adapts its product lines to more utility-intensive networks — more flexible systems that rely less on raw hardware.
however this time DiPerna’s engineers are pushing the edges of know-how with no need to worry even if their company is ready to implode. It’s an international of change from simply just a few years in the past.
Ciena’s trail of acquisitions due to the fact the 2001 telecom crash:
2002: ONI programs of California for $398M
2003: Wavesmith Networks of California for $178M
2003: Akara of Ottawa for $46M
2004: Catena Networks of Ottawa for $314M
2004: cyber web Photonics of Massachusetts for $100M
2008: all over Packets of California for $296M
2010: Nortel’s optical items unit of Ottawa and Montreal for $774M
2015: Cyan of California for $415M
a brief heritage of Nortel’s optical products unit
1989: Nortel launches Fibre World – its intention to build a family unit of optical transmission products
1993: Nortel gives the go-forward for OC-192, which transmits records at 10 billion bits per second
1995: Secures initial order of OC-192 from MCI Communications
1996: First 12 months of huge shipments for OC-192
Late Nineties: Upstart carriers together with Worldcom and Qwest Communications area giant orders
2000: Nortel revenue of fibre-optic products hit $10 billion – one-third of enterprise revenues – making it the globe’s No. 1 company
2001: Telecom trade crashes as weakening inventory market deprives carriers of an enormous supply of money. Nortel starts its ancient downsizing
2001: Nortel’s optical items unit – which might become referred to as Metro Ethernet Networks – starts work on a novel strategy to enhance the velocity of records devoid of forcing carriers to deploy new techniques. The know-how is dubbed “coherent optical”
2005-06: Nortel engineers unveil new chips to accomplish this
March 12, 2008: Nortel unveils industry’s first coherent technology system, to run at forty billion bits per second
Sept. 17, 2008: Nortel declares Metro Ethernet Networks could be offered to lift cash for the relaxation of the enterprise
Jan. 14, 2009: Nortel files for chapter insurance plan, and soon presents all its business devices for sale
March 19, 2010: Ciena will pay $774 million to purchase Nortel’s optical products unit
2015: building starts on a brand new campus in Kanata to house 1,600 employees, most of them previously with Nortel
2017: New Ciena campus is anticipated to be accomplished, and should control the vast majority of the enterprise’s global R&D
Marco Pagani has currently served as Chairman of the Board of directors at a few telecom excessive-tech corporations, including Nimcat Networks, where he helped steer the business towards its eventual acquisition with the aid of Avaya in 2005. just before his present work as an govt advisor, Mr. Pagani served in an illustrious profession at Nortel Networks over a 20-year period. His most contemporary position at Nortel was President of Optical Ethernet and Storage options, during which his leadership fueled the division's swift growth. up to now he held quite a few senior positions, including President - Metro Optical Division, President - Core Networks, and customary supervisor - service information Networks, the place his management advantage drove Nortel to a place of market leadership.
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EUC with HCI: Why It matters
Networking seller Ciena has now formally closed the deal to purchase the optical networking and service Ethernet know-how of Nortel's Metro Ethernet Networks (guys) enterprise for a complete buy rate of approximately $774 million.
The deal's closure marks the end of a virtually six-month manner wherein Ciena has been in the hunt for Nortel's belongings because it assumes a new position in the service networking trade.
Nortel entered into bankruptcy in January 2009, and has spent lots of the past 12 months promoting off its a considerable number of divisions. Ciena first bid on the Nortel provider property in October, and formally received the auction for the business at the end of November.
Ciena is now relocating ahead as a combined entity with Nortel's guys and aims to be an enormous participant in the service marketplace.
"Ciena's competitive position in the market has been vastly greater with the Nortel guys acquisition," Dave Parks, director of product marketing at Ciena, advised InternetNews.com. "we're large sufficient to execute however now not too regularly occurring like some of their better competitors to lose focal point. Ciena now holds the #1 optical networking market share place in North america and number three position globally."
Parks introduced that Ciena is now placed to be a market leader in optical switching and is rising as a heavyweight in provider Ethernet. Nortel had been engaged on a hundred gigabit networking applied sciences, and already has trials of its answer with Verizon.
Ciena is planning to rebrand the current Nortel guys platforms with its personal brand over time, notwithstanding Parks said that the business is rarely planning to rename any of the Nortel men products. existing items don't seem to be being phased out unless they have been already discontinued prior to the acquisition, he introduced.
"We may be leveraging key capabilities and applied sciences from each normal Ciena and Nortel men and making use of those across the portfolio where it makes sense," Parks pointed out. "Some examples of this include including Nortel guys's 100G know-how to different Ciena products and Ciena's handle plane utility to different Nortel men items."
Ciena will proceed to assist existing Nortel customers, and all products that are presently shipping to consumers could have continuity of give and assist, he noted.
"basically, lots of Nortel guys's products and capabilities are key components of their going-ahead portfolio and approach," Parks referred to. "we've organized their mixed portfolio round options in response to converged optical Ethernet with the aid of leveraging key equipment and technology attributes in a few areas that support their consumers make their networks better ability, converged and automated."
The optical networking and carrier Ethernet business is the ultimate of Nortel's important divisions to be liquidated by the bankrupt company as it now winds down its operations. Nortel in the past offered its instant property to Ericsson for bid of $1.13 billion. Nortel sold its business assets to Avaya for $900 million.
Sean Michael Kerner is a senior editor at InternetNews.com, the information provider of internet.com, the network for know-how gurus.
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SHENZHEN, China--(BUSINESS WIRE)--ZTE Corporation (0763.HK / 000063.SZ), a major international provider of telecommunications, enterprise and consumer technology solutions for the Mobile Internet, has signed a new 100G optical transportation network (OTN) contract with Reliance Communications India.
ZTE will provide 100G optical transportation network design, engineering, installation, and operations and maintenance services to Reliance Communications India in Pune and Hyderabad during the next three years. The company will also provide its ZXONE series of equipment to satisfy the multi-service access and high integration requirements of Reliance Communications India, with ZTE’s low total cost of ownership (TCO) being one of the major factors in Reliance Communications India’s decision to partner with the company.
Currently occupying 14.35 percent of Indian market share, Reliance Communications India is the fourth largest operator in India. With mobile networks entering the age of long term evolution (LTE), Reliance Communications India’s synchronous digital hierarchy (SDH) was not able to meet growing data communication demands. ZTE’s 100G OTN solution allows Reliance Communications India to quickly develop Pune and Hyderabad’s 100G metro area transmissions and greatly relieve long-term evolution (LTE) bandwidth requirement pressures. ZTE’s leading OTN research and development platform and 100G OTN products satisfy Reliance Communications India’s requirements with their high performance, easy maintenance and low cost.
With high integrity, ZTE 100G OTN supports any access rate from E1/T1 to 100GE, 4-22 client port with smooth evolution, as well as dense and coarse wavelength in one. At the same time, the product has highly efficient performance and can implement port self-adaption, dispatch subsystem (DSS) crossing, L2 switching aggregation, and common public radio interface (CPRI) transmission. Additionally, OTN encapsulation supports complete overhead, optical layer/electrical layer monitoring, and unified network management facilitating failure location and service configuration, which effectively improve operations, administration and management (OAM) efficiency.
According to the latest optical network product market report by Ovum, ZTE increased its market share in optical networking products to 28 percent globally in Q2 2015, higher than any other Asia Pacific vendor. By Q4 2014, ZTE had completed the deployment of more than 200 networks of 100G OTN with three major domestic operators in China Mobile, China Telecom and China Unicom. ZTE is also proud to be associated with international operators EE UK, T-Mobile Austria, TIM Brazil, TEF Peru, PCCW HK and TELKOM Indonesia as well as enterprise customers such as Cernet. ZTE has completed more than 200 100G OTN deployments, accumulated a 100G board delivery volume of more than 20,000 and 100G line length of more than 200,000km.
ZTE is a provider of advanced telecommunications systems, mobile devices, and enterprise technology solutions to consumers, carriers, companies and public sector customers. As part of ZTE’s M-ICT strategy, the company is committed to provide customers with integrated end-to-end innovations to deliver excellence and value as the telecommunications and information technology sectors converge. Listed in the stock exchanges of Hong Kong and Shenzhen (H share stock code: 0763.HK / A share stock code: 000063.SZ), ZTE’s products and services are sold to over 500 operators in more than 160 countries. ZTE commits 10 per cent of its annual revenue to research and development and has leadership roles in international standard-setting organizations. ZTE is committed to corporate social responsibility and is a member of the UN Global Compact. For more information, please visit www.zte.com.cn.
By Bill Gartner, Vice President Cisco’s Optical Systems and Transceivers Group
At Cisco, they pride ourselves on being true business collaborators with their service provider customers.
And they relish any opportunity to work side-by-side with a leading global service provider on a technology program with the potential to advance the entire telecommunications industry.
These opportunities are rare indeed. And today at OFC, the largest global conference and exposition for optical communications and networking professionals, Cisco was fortunate enough to receive such an opportunity.
Verizon announced that it would be working with Cisco and one other supplier to design and build a next-generation 100G metro network in the United States that will deliver improved scalability, functionality and efficiency. To meet Verizon’s mission of offering its customers high-capacity video and wireless solutions, it has decided to modernize its metro optical network. Cisco is honored to be part of this important network transformation.
Using 100G flexible CDC ROADMs and packet aggregation will enable Verizon to advance and scale its network while maintaining existing services and reducing service-activation times as well as network operation and maintenance costs.
“Deploying a new coherent, optimized and highly scalable metro network means Verizon stays ahead of the growth trajectory while providing an even more robust network infrastructure for future demand,” said Lee Hicks, vice president of Verizon network planning. “Cisco met not only their technology requirements but the aggressive timeline to deploy their next-generation 100G-and-above metro network.”
Verizon will test and deploy the Cisco Network Convergence System and the second supplier’s equipment on portions of its 100G metro network this year, with plans to turn up live traffic in 2016. Supplier volumes will be guided by ongoing testing, support and performance.
Verizon and Cisco are long-standing technology and business partners, and they are pleased to play a key role in Verizon’s optical network modernization program.
Cisco has made investments in next-generation optical technologies to help Verizon realize its vision to transform its network architecture to achieve the speed and operational efficiency required to meet the demands of today, while capturing growth opportunities over the next decade.
This new architecture gives Verizon advantages in its metro network including increased capacity, superior latency and improved scalability.
Verizon is a leader in 100G technology having successfully completed several industry firsts, beginning in 2007 with a successful field trial of 100G optical traffic on a live system.
Cisco is very pleased to be working closely with Verizon on its landmark network build-out, and they are committed to making it successful so that Verizon customers will reap its benefits for decades to come!
Escalating metro traffic growth is paving way for the innovations in new metro network architecture with clear-cut focus on both packet functionality and optics. Capitalizing on the latest innovations in packet and optical technologies, MRV (News - Alert) Communications, a provider of packet and optical solutions, unveiled its new OptiPacket metro service edge platform.
The new OptiPacket platform is noted to be a forward-leaning platform that addresses the tremendous transformation that is occurring in metro networks.
“The OptiPacket metro service edge platform builds on their broader strategy to empower the optical edge by accelerating packet optical convergence with innovative hardware and intelligent software. MRV is committed to providing their customers with advanced, flexible and next-generation solutions, like the OP-X, that make it easier to build their business with important new services, while reducing network complexity and simplifying operations,” David Stehlin, chief executive officer of MRV Communications (News - Alert) said in a statement.
By optimizing the platform for packet, optical and converged packet-optical networks, MRV is enabling service providers to seamlessly deliver multilayer services over the same metro service edge.
According to the company, the new OptiPacket platform offers increased efficiency and intelligence to support ultra-high bandwidth 10Gbps and 100Gbps high-density interfaces. Service providers can deploy the OP-X platform as a packet-only solution in high-capacity mega points of presence for broadband aggregation applications, or utilize it as an Optical Transport Network solution for the transport and management of multiprotocol telecom networks. It can also be used as a converged packet-optical solution, said the company.
Key features of the new OptiPacket metro service edge platform include;
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