Ericsson, Ciena pair on packet-optical transport, SDN development

Ciena Corp. (NYSE: CIEN) and Ericsson (NASDAQ: ERIC) have announced a partnership that will see Ericsson market Ciena’s packet-optical portfolio in tandem with Ericsson’s IP routers. The two also will collaborate on development of software-defined networking (SDN) capabilities.

Ciena Corp. (NYSE: CIEN) and Ericsson (NASDAQ: ERIC) have announced a partnership that will see Ericsson market Ciena’s packet-optical portfolio in tandem with Ericsson’s IP routers. The two also will collaborate on development of software-defined networking (SDN) capabilities.

Ericsson will sell Ciena’s 6500 Packet-Optical Platform and 5400 family, thus opening new markets for Ciena among Ericsson’s client list, which includes wireless operators Ciena has not yet been able to reach. Ericsson also will gain access to Ciena’s WaveLogic coherent optical technology, which will be integrated into Ericsson’s IP portfolio in the form of IP over DWDM interfaces and boards for Ericsson's SSR 8000 platform. Meanwhile, the two companies will work together to bring SDN capabilities to their two portfolios. Ciena has already been moving in this direction with its OPn initiative.

"The convergence between IP and optical network layers in an open SDN-controlled architecture will enable more flexible and cost-efficient networks for service Pproviders" said Johan Wibergh, executive vice president and Ericsson's head of business unit networks." This agreement allows us to offer Ciena's industry-leading packet-optical products. This is a great complement to our portfolio of fourth-generation IP products and will enable more complete and competitive solutions to our customers."

“Consistent with our OPn network architecture for intelligent network evolution, the industry is moving toward an ecosystem of more specialized players as the transformation accelerates toward open, programmable, multi-vendor networks that scale and adapt to network-level applications and services,” said Gary Smith, president and CEO, Ciena. “Together, Ciena and Ericsson will bring best-in-class solutions to customers around the globe to better address the evolving requirements for software-driven, converged networks.”

An interesting aspect of the agreement is the fact that Ericsson already has a packet-optical transport system in its portfolio, the SPO-1400 (see "Ericsson expands SPO packet-optical transport family").

“Assuming it’s executed well, the deal looks like a win/win for both companies. However, it does signal that Ericsson is admitting weakness in optical networking after three years of developing its SPO product line,” says Ron Kline, principal network infrastructure analyst at Ovum. “Ciena is currently the third-ranked converged packet optical (CPO) vendor globally with 14% market share, whereas Ericsson is only ranked eleventh with 1% share.”

That doesn’t mean that Ericsson has nothing to offer, Kline points out. “The key to the deal is the collaborative SDN effort that combines resources at both companies,” he explains. “The battleground for differentiation is quickly moving to software and professional services. Ericsson is the second-ranked provider of telecom infrastructure services (just behind Cisco) and is number one in the network-related subsegment.”

Kline believes collaborations such as this one will become more prevalent in the future. “We expect this announcement to be part of a trend of specialist and full-service vendors collaborating to provide a stronger value proposition to communications service providers, which want fewer more strategic vendor relationships and more integrated solutions,” he says.

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