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Technology Stocks : Applied Micro Circuits Corp (AMCC)

AMCC 8.450

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Feb 3 4:00 PM EST

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To: Techplayer who wrote (854)	10/29/2000 1:51:58 AM
From: Raymond Duray	Read Replies (1) of 1805

Hi tp, I remember reading the CIEN prospectus in early 1997. The situation was that the cost of WDM gear at that point in time was prohibitively expensive for consideration in the metro or access layers where it was more economically justifiable (cheaper) to just put in more strands. The problem that CIEN was solving for WCOM and FON (the two and only customers of CIEN at the time of their IPO) was that carriers were faced with an impending undercapacity situation on their long haul routes. It was only because CIEN offered a kludge that was cheaper than the cost of laying new FO strands cross country that CIEN was able to make a business case at all. I will grant you that metro DWDM is starting to ramp and it once again behooves us to examine the economics of this newly emerging market. I think Steve Garafolo at Muffin-X had it right when he said that no one realy wants DWDM as a first choice. In a ideal world, what the customer wants is a strand of his own, bought at a reasonable cost to which he can attach whatever gear his little IT heart desires. Where that leave us is that the corporate IT guy still has to make a choice as to whether he wants to buy a strand and run his own show, connecting at an interNAP such as AboveNet. Or does he want to use an SP from his premises. When I look into Yipes, Cogent and others, the costs are not terrible, but a SLA from MFNX is a compelling value as well, especially if the corporations needs are capacious. I'm no engineer, but I'd have to think that IT guys, who are used to Ethernet and Cat 5 with a little FO thrown in are going to be looking for the simplest, most bomb-proof solutions that they can find. And that ain't a description of a DWDM installation. JMVHO, Ray

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