From the PR:
SAN JOSE, Calif., April 4 (Reuters) - Cisco Systems Inc.(NasdaqNM:CSCO - news), the No. 1 maker of gear that helps to power the Internet, said on Wednesday that slow sales of an optical router had prompted it to discontinue making that device found at the core of optical networks.
Please correct me if I'm wrong, but wasn't this device supposed to solve bottleneck problems that existing fast core routers have right now?
Actually these types of switches (the term routers is really a misnomer) have been used in both the core and the edge. For example, Broadwing uses a Corvis all-optical switch for the core and uses Ciena's CoreDirector on the edge on the same network. Another Ciena customer, LayerOne, has been using the CoreDirector for carrier interconnection purposes at the edge. Yet other Ciena customers I believe have been using the CoreDirector (true to its name...lol) at the core for switching. As for your other comment about the slowness of adoption, I don't think Ciena would agree with you. Of course Cisco would (and perhaps Sycamore although even they have had a number of interesting wins in this space...) but I suspect that is just a cover story they are giving and the real one is that they have not been successful in this space (their neglect to include a STS-1 grooming function has been cited as one of the reasons for their lack of success...)
Here is the Lightreading story...
Cisco Kills Monterey Router
--------------------------------------------------------------------------------
As it turns out, rumors of the demise of Cisco Systems Inc.'s (Nasdaq: CSCO - message board) optical core router were not greatly exaggerated (see Cisco Preps New Optical Switch ).
Cisco confirmed today that it's discontinuing its ONS 15900 Wavelength Router product, which it acquired when it bought Monterey Networks in a stock deal worth about $500 million in August 1999.
"There's not a replacement for it currently," says Cisco's optical boss, Carl Russo. "We found that the marketplace it was addressing was very slow to take off. So we're going to stand down and watch this market. When we see it start to take off again, we'll make a re-entry decision at that point."
That could be some time. It is currently estimated that there are less than 100 service provider facilities in North America that could take advantage of a product as large as the Monterey device.
While Cisco says it is still a believer that a mesh architecture in the network's core is the way to go, the capital spending crunch is forcing it to retrench and throw its weight behind the metropolitan market, where it already has a foothold. "Most [service providers] are coming to the conclusion that they've got core networks. What they don't have is a way to get enough traffic onto them," Russo says.
Just how extensive an effect this product's demise will have on Cisco remains to be seen. Cisco hasn't yet addressed what it will do with the inventory for the wavelength router and whether that glut will result in a charge against earnings.
Also, the effect that the cancelled product will have on the optical components firms that supported it is unknown. “When we made a decision to discontinue the product, we chose not to wait until we had all the answers because we felt it was material enough that it should be out in the public domain,” Russo says.
"We're going to be redeploying and belt tightening and it's not clear how all this will shake out," Russo says. "But our first concern is to get the talent base reassigned to those projects that make sense."
Russo says that about 200 employees will be reassigned and Cisco will also work to help the customers that have already bought the ONS 15900. “We're going to work with our customers to make them whole and help them along. That work has just started so I don't know how that's going to sort out,” Russo says.
In September 2000, Cisco said that one large carrier, WorldCom Inc. (Nasdaq: WCOM - message board), had completed its initial phase of testing for the ONS 15900 and one startup carrier, Petronet Corp., was testing the product. In November 2000, Cisco announced that the first “paying customer” for the hulking box would be Cambrian Communications LLC, a Fairfax, Virginia-based carrier's carrier whose purchase Cisco helped finance (see Cisco Plods Toward Optical Portfolio ).
By sending its optical router to the glue factory, Cisco cedes that part of the optical battle to Tellium Inc., Ciena Corp. (Nasdaq: CIEN - message board), and others. However, Cisco will remain in the core DWDM market with its ONS 15800 products. "We have over 20 customers for the 15800 series, so I'm pretty excited about what I'm seeing there," Russo says.
lightreading.com |
