ANALYSIS SHOWS SERVICE PROVIDERS CAN DRAMATICALLY REDUCE COSTS BY DEPLOYING CIENA'S LIGHTWORKS
CIENA to Conduct Educational Seminars to Carrier Community About Economic Value of Its LightWorks Solution
FOR IMMEDIATE RELEASE
Linthicum, MD– September 19, 2001 –
CIENA Corporation (NASDAQ: CIEN), a global provider of intelligent optical networking systems, today announced the completion of an analysis demonstrating the large savings that service providers can achieve by building out, expanding or migrating their networks to CIENA's LightWorks™ architecture, rather than using legacy equipment.
The Company plans to hold educational seminars around the world to demonstrate to service providers the benefits of its next-generation architecture.
"We have recognized that a fundamental change is taking place in our industry, and applaud CIENA for educating the telecom community about the ongoing shift from legacy to next-generation optical networks, also known as Intelligent Optical Networks," said Michael Howard, principal analyst and co-founder of international market research firm Infonetics.
According to the Economic Value Analysis (EVA) model, created by CIENA with a leading global consulting firm, CIENA's LightWorks solution provides, in a typical 15 node backbone network, over 60% in capital expenditure (CAPEX) savings versus a comparable legacy solution. These savings represent CoreDirector™'s ability to displace Digital Access and Cross-Connect System (DACS) and Add-Drop Multiplexer (ADM) functionalities.
The operating costs (OPEX) for the service provider averages approximately 50% of overall revenue, according to CIENA's research. The EVA model estimates that after six years, OPEX savings will be as much as 34%, as compared to a legacy solution. The savings are derived from installing and maintaining a network of 15 CoreDirectors versus a legacy solution with more than 400 DACSs and ADMs. Also included in the OPEX savings are the associated space and power reductions.
Beyond the CAPEX and OPEX savings, CIENA's EVA model also shows potential for providing revenue stream enhancements that yield approximately 10% additional revenue, according to the scenario utilized for the study. The total includes new service classes that legacy gear cannot support, as well as additional revenue due to fast provisioning times for service turn-up, which creates a "Time to Revenue" bonus.
CIENA plans to hold educational seminars during the remainder of 2001 regarding the study's findings and the resultant network architecture across Europe, the Asia-Pacific region and Latin America.
"CIENA's role is to help service providers maximize the efficiency of their networks while providing them with opportunities to increase their return on investment," said Gary Smith, president and CEO of CIENA. "Through this global seminar series, we'll share study findings and discuss the benefits of CIENA's LightWorks with carriers worldwide."
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