Cisco Aims for No. 2 in Optical Networking: Bloomberg Forum
By Scott Lanman
San Jose, California, Dec. 11 (Bloomberg) -- Cisco Systems Inc. Group Vice President Carl Russo aims to move the optical- networking business he runs to No. 2 behind Nortel Networks Corp. in 18 months to two years.
``We have lots of plans and lots of roadmaps that we have to deliver upon,'' Russo told the Bloomberg Forum. ``But if we deliver on our roadmap, I think we can get to No. 2.''
In addition to No. 1 Nortel, Lucent Technologies Inc., Fujitsu Ltd., Alcatel SA, Marconi Plc and Ciena Corp. had higher third-quarter sales for fiber-optic network equipment than Cisco, researcher Dell'Oro Group said.
``How do you do it? Number one is by staying focused on having the broadest, most comprehensive portfolio of products in the metro optical space and continuing to ride the shift from rings to mesh in the core,'' Russo said, referring to a fiber- optic network structure Cisco is promoting. ``We have challenges in both areas.''
In the third quarter, Cisco sold $219 million of optical gear, compared with $2.39 billion for Nortel and $763.7 million for No. 2 Lucent, Dell'Oro said. Cisco and No. 6 Ciena were the only companies of the top seven to increase sales from the second quarter, Dell'Oro said.
Cisco, the biggest maker of equipment for data networks, bought Russo's optical-networking startup, Cerent Corp., about a year ago for $7.15 billion in stock in Cisco's most expensive acquisition. Cerent's product, which apportions Internet service over optical networks, has accounted for the bulk of Cisco's optical revenue.
No Acquisitions Planned
Cisco doesn't have any optical purchases in the works now, though. ``I would never rule out acquisitions, but none are currently planned,'' Russo said. He was expanding on remarks last week to attendees at Cisco's analyst meeting in San Jose, California, where the company is based.
Orders for optical-networking gear, including the former Cerent product now known as the Cisco ONS 15454, rose more than sixfold in Cisco's fiscal first quarter ended Oct. 28, Chief Executive John Chambers said last month. In August, Cisco named the first potential customers for a fiber-optic router acquired in its $500 million purchase of Monterey Networks Inc.
Cisco hasn't unveiled an acquisition of an optical-networking company since May, when it agreed to buy Qeyton Systems AB, which makes a device that increases the amount of traffic carried on fiber-optic networks in metropolitan areas.
``We think we have a good hand, but you're never done in this environment,'' Russo said.
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