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Technology Stocks : Ciena (CIEN)

CIEN 225.21

-13.1%

Jan 8 4:00 PM EST

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To: cfoe who wrote (10958)	5/10/2001 6:51:14 AM
From: jghutchison	Read Replies (2) of 12623

Michael, What too many people fail to realize is the fact that these complex systems are not shrink wrapped commodity items that compete on cost alone. This is highly specialized hardware and software. No one else has anything close to the CoreDirector, few have functional ultra long-haul capability, and fewer yet have an across the board solution that Ciena offers. It would be very fool hardy indeed to attempt to mix and match these systems in order to save a few bucks on fire sale giveaways by a stressed out vendor. Consider the software implications. This would be akin to using a 1.8 G computer motherboard with Apple II cast offs, and a Teletype for a keyboard. There are special situations where various vendor platforms are combined, i.e. Broadwing, but I suspect this is the exception not the norm. I am not talking about mixing next generation Ciena equipment with legacy SONET gear. That is done all the time. But that legacy equipement is only good for a single channel. Consider the implications on a trans Atlantic cable installation. I think the odds are that the deal was negotiated in good faith and both parties are pleased with it. It is unlikely the deal was renegotiated to extract more favorable terms. Mind you, this contract is a multi-year deal. The first phase is $150 million. The remaining portion is always up for negotiations. In other words, both companies hit a grand slam. Jack Hutchison

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