I am sure many of you read this in today's SJ Mercury on Cisco & Ciena, but I was wondering if someone could tell me how this plays out for Cisco's future in it's battle with Lucent. Also, Microsoft's decision today to qualify Lucent WDM Products. (I'll post that URL next) I love Cisco, forget about this nonsense about BAY, ASND COMS I for one look to Lucent to provide the challenge.
Published Thursday, June 4, 1998, in the San Jose Mercury News
Buyout of key supplier leaves Cisco in a tight spot
Bloomberg News Tellabs Inc.'s planned $6.86 billion purchase of Ciena Corp. turns up the heat on No. 1 networking company Cisco Systems Inc. of San Jose in its battle with Lucent Technologies Inc. Cisco must maintain its partnership with Linthicum, Md.-based Ciena and Ciena's new parent or quickly find another way to get equipment that the Baby Bells and others need to carry more phone calls and data on their networks. Ciena is the top maker of such equipment, known as dense wavelength division multiplexers, or WDMs. In April, Cisco agreed to make some of its products work with Ciena's in hopes of selling them together. The partnership, which some analysts saw as a prelude to a Ciena purchase, gave Cisco access to Lucent's big phone customers. Now Cisco finds itself depending on Tellabs, of Lisle, Ill., which is bigger than Ciena and has its own ambitions in the communication-equipment market. ''Cisco should have bought Ciena first,'' said Craig Johnson, an analyst with the PITA Group in Portland, Ore. Analysts aren't ruling out a higher bid by Cisco for Ciena or acquisitions of some smaller companies, although Lucent, of Murray hill, N.J., is the only other big maker of the WDM equipment.
''Cisco needs WDM products if they're going to compete with Lucent,''
said Joseph Noel, an analyst with Hambrecht & Quist, Cisco's products have little overlap with current offerings from Tellabs or Ciena, Cisco and Ciena both said Wednesday that their partnership is intact. |
