Leadership for sale
Nortel's decision to sell off its assets represents a sad end to a once-proud company. But the Canadian optical communications community's loss will definitely be someone else's gain, particularly the company with the financial and strategic wherewithal to buy Nortel's Metro Ethernet Networks (MEN) assets.
Those assets include most of Nortel's optical communications activities (the LG Nortel joint venture handles WDM-PON), in particular its 40- and 100-Gbps technology. Nortel enjoys leading positions in both emerging markets. Michael Howard, cofounder at Infonetics Research, recently told me that the company likely would surpass Nokia Siemens Networks as the top supplier of 40-Gbps technology this year.
Meanwhile, Nortel also has led the pack in terms of 100-Gbps trials, including at least one with Verizon. Speaking after last month's Optical Internetworking Forum (OIF) interoperability demo at Verizon's Waltham, MA, facility, the carrier's vice president of network architecture, Stuart Elby, said he expects that at least one of his current vendors, and perhaps as many as three, will deliver tenable 100-Gbps networking platforms by the end of this year. He added that he expects the platforms will be based on technology “like” the dual-polarized QPSK with coherent detection around which the OIF has rallied the industry (including Verizon). Given the fact that Nortel was the first vendor to announce use of this approach‚Äîbefore the OIF opted to focus on it‚Äîit seems likely that Nortel would have been one of the companies Elby had in mind. The chance to put your technology in front of a likely early adopter should hold appeal to any potential MEN shoppers.
And MEN's appeal does not rest solely on the current cutting edge. Infonetics ranked Nortel as the number three optical network equipment vendor for 2008.
And just who would be interested in bidding on MEN? The issue for existing optical communications vendors would be addressing product overlap. But for any company truly wishing to lead the market, the integration risk would be worth taking.
Stephen M. Hardy
Editorial Director & Associate Publisher