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Technology Stocks : Ciena (CIEN)
CIEN 201.71+3.1%Dec 5 4:00 PM EST

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To: Kenneth E. Phillipps who wrote (10043)12/19/2000 10:28:06 AM
From: jghutchison   of 12623
 
Kenneth,

I believe you have asked that question previously in different form, and I have answered it. Here again.

SONET defines a set of specifications and architecture. SONET has been around for about 15 years. In very simplistic terms, original equipment designed to meet the SONET specs is called "legacy", ie the stuff marketed by Nortel, Lucent, Alcatel etc. Current DWDM and optical switching equipment meets the SONET specifications, but it is not legacy equipment.

Similarly, this SONET technology offered by the Fiberlane daughters does not fall in the realm of legacy equipment. The Fiberlane concept is new technology that utilizes familiar SONET architecture, not to be confused with SONET hardware. I call it SONET II. The Fiberlane daughter technology costs one tenth to one twentieth of existing legacy SONET equipment, occupies considerably less space, consumes far less power, is easier to install and maintain, and vastly outperforms legacy gear.

There are any number of reasons why Nortel et al have not introduced, or embraced this new technology. Cannibalization of existing product lines, tunnel vision, execution, etc, come to mind. Many of these same issues were addressed by ice_gator recently on the Ciena thread when discussing the Digital Equipment empire demise.

SONET architecture will be around for a long time. However, legacy SONET equipment sales will shortly peak as more efficient DWDM and SONET II equipment penetrate the market, in force.

Hope this helps.

Jack
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