Nortel MEN bid: What Ciena isn’t after

OCTOBER 8, 2009 By Stephen Hardy UPDATED OCTOBER 20 -- Ciena Corp. yesterday announced that it had reached agreement with Nortel on a $521 million stalking horse bid for “substantially all” of the optical transport and Carrier Ethernet assets within Nortel’s Metro Ethernet Networks (MEN) division. “Substantially all,” of course, implies that there are parts of MEN Ciena doesn’t want. A Ciena spokesman detailed these elements yesterday in an interview with Lightwave.

OCTOBER 8, 2009 By Stephen Hardy UPDATED OCTOBER 20 -- Ciena Corp. yesterday announced that it had reached agreement with Nortel on a $521 million stalking horse bid for “substantially all” of the optical networking and Carrier Ethernet assets within Nortel’s Metro Ethernet Networks (MEN) division. “Substantially all,” of course, implies that there are parts of MEN Ciena doesn’t want. A Ciena spokesman provided at least partial insight into these elements yesterday in an interview with Lightwave.

First, said John Marson, vice president of industry and strategic marketing at Ciena, Nortel would keep its ex-Passport multiservice switch family. Marson described the line as “a Carrier Ethernet product that probably has more applicability in the enterprise end of things as opposed to a carrier infrastructure product.”

Next, Ciena has no interest in a MEN line of products Marson described as “customer prem or edge Carrier Ethernet aggregator devices” that his company feels duplicate its Carrier Ethernet Service Delivery suite. Marson called this line the “Ethernet Fiber Access family” and “primarily the 1000 series.” Nortel does offer the Ethernet Access Service Terminal, which includes a 1000 family and associated residential and business units. This is the WDM-PON offering now chiefly the marketing responsibility of LG-Nortel. In an emai sent October 14, a PR spokesman working with Ciena confirmed that this platform is not part of the proposed deal. The Optical Multiservice Edge 1000 Series, which Nortel's website describes as "customer premise solutions that allow fast and efficient deployment of Ethernet services with powerful OAM tools and clear customer demarcation for better SLA definitions," also might fit Marson's description. However, the October 14 email states that Ciena does hope to acquire this product line.

Finally, Ciena’s interest in Nortel’s crossconnect family was uncertain at the time the proposed deal was announced. Marson initially said that he was “virtually positive” crossconnects aren’t part of the potential deal. “Nortel really didn’t have that significant of a market share or leadership position there,” he said, whereas Ciena has had success with its CoreDirector and related products. However, the October 14 email states that Ciena does want to acquire the HDX crossconnect line.

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