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Technology Stocks : Ciena (CIEN)
CIEN 238.47-3.2%Jan 14 4:00 PM EST
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To: Doug (Htfd,CT) who wrote (1212)2/12/1998 11:03:00 PM
From: Tim Bagwell  Read Replies (1) of 12623
 
Thanks for the info Doug,

In response to the Gilder article I would say that I have mixed feelings. I agree that Ciena has displayed a tendency to be in a "wait & see" mode where little work is ongoing toward future systems. On the other hand, I believe they are very busy meeting the current demand. The question then becomes, how far will the present technologies take WDM and when will Internet traffic growth demand further advances in technology?

I know that Gilder is a proponent of the so called "all optical network" and Ciena may not be pursuing this area as much as resource rich companies like Lucent or Nortel. But you have to ask yourself when the next push will hit the backbone networks? The best present technology will eventually get us to perhaps 40-80 channels at 10 Gb/s for as much as 800 Gb/s of bandwidth on a single fiber. Most networks have many parallel fibers. This is a staggering increase above what is presently a slow but ok situation. I'm left to expect that the present upgrades to the backbone will be sufficient for the next decade. To be sure, service providers will not be able to change their networks at any faster rate than this. It's just too huge of a capital expense and the software management issues are as yet unknown.

So, if the present technology will get us through the next decade, it's reasonable to assume that Ciena could have a bright future for at least that long. The "all optical network" is a nice concept that the Gilder's of the world like to dream about but at this point in time it's science fiction IMHO. Now breakthroughs can and will happen but they are unpredictable. Meanwhile, Ciena just turns the crank day and night.
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