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Technology Stocks : Nortel Networks (NT)

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To: hari t who started this subject4/12/2001 4:26:06 PM
From: Kenneth E. Phillipps   of 14638
 
Nortel pumps up the core

By Mary Jander and Phil Harvey

Network World Optical Newsletter, 04/02/01
Nortel Networks late last month threw its weight
behind 40G bit/sec optical technology in the core of
the network, announcing a series of products that will
push the next-generation technology at the Optical
Fiber Conference in Anaheim, Calif.

The announcements are significant for showing Nortel
is ready to make an aggressive bet on 40G bit/sec
technology, perhaps even before telecom carriers are
ready to deploy it. Nortel's early move into 10G
bit/sec, the last major upgrade of the network, was a
key factor in its success in gaining market share,
making it the leader in core optical transport
technology.

Nortel's announced products, which will be available
in the latter half of this year, include:

* The Optera Connect HDX switch, which has a
capacity of switching between 3.84 terabit and 40
terabit/sec of data. The product also supports both
10G bit/sec and 40G bit/sec interfaces, which is
important for allowing service providers a smooth
upgrade.

* The Optera Long Haul 5000 Optical Line System, a
dense wave division multiplexing platform designed to
carry 160 wavelengths at 40G bit/sec over 1,000
kilometers without needing electrical regeneration.

* A MicroElectroMechanical Systems -based tunable
laser for 40G bit/sec systems, based on the
technology it acquired from CoreTek last year.

* The Smart Optical Network, a software solution
that will allow service providers to pull bandwidth on
demand from the optical core. The software is
designed to be embedded inside Nortel switches,
automatically configuring optical connections in
response to signaling that’s based on emerging
standards from the International Telecommunication
Union and Internet Engineering Task Force.

"It's a bet on 40-Gig," says Greg Mumford, president
of Nortel's optical Internet division. "Just like how we
bet on a 10-Gbit/s [core] when no one else would.

" When we talk to chief information officers, they say
they would gladly trade more bandwidth [at the
network’s core] for additional processing [at the
edge]."

The significance here is that Nortel's pushing for
greater capacity at the network's core, something
you’d think service providers would use when
available. The catch, for now, is that the big service
providers, Nortel’s bread and butter, are cutting
spending and slowing build-outs, as the capital
markets seize up and [competitive local exchange
carriers] continue to wither.

There’s no doubt that Nortel’s long view - that more
and more bandwidth is needed because it's still being
consumed as soon as its available - is still on the
mark. However, given the economic slowdown, it’ll
be interesting to see whether service providers pick
up on Nortel’s 40G bit/sec vision as quickly as they
did when it offered a way to extend voice-based
SONET networks to 10G bit/sec networks primarily
used to shuttle data.

Harry Bosco, president and CEO of start-up OpNext
Inc., says OpNext is selling about a thousand 10G
bit/sec modules a month, and he’s not seeing a
slowdown there. All the same, he does see what’s
coming over the horizon. " Router vendors are the
ones driving demand for 40G bit/sec, " he says. "
They want it, and they're pushing hard to get it. "

Other equipment providers agree with Nortel's
reasoning, saying that service providers are interested
in 40G bit/sec core gear because the upgrade will help
them cut costs. But it may be a year to 18 months
before certain issues make a 40 Gigabit product
launch more feasible.

"We've got 40-Gigabit technology in our labs now,
but we're waiting for the right time to fold it into a
product," says Thomas C. Mock, Ciena Corp.'s
senior director of transport product management.
"There would be a much greater press if there were
already specific applications [for that kind of
bandwidth] waiting."

Mary Jander is a senior editor at Light Reading,
(http://www.lightreading.com), an optical
networking Web site. She can be reached at:
jander@lightreading.com

Phil Harvey is a senior editor at Light Reading. He can
be reached at: harvey@lightreading.com

Related links

[an error occurred while processing this directive]
Marguerite Reardon, former associate editor at Data
Communications and Information Week, is a senior
editor at Light Reading, an optical networking Web
site. She can be reached at reardon@
lightreading.com.

nwfusion.com
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