Baldwin, << here's the entire story. on to new ventures >>
Overview
More data, same space. Linthicum, Maryland-based CIENA makes systems that allow optical fibers to carry 16 to 40 times more data, graphic, and voice information without requiring more lines -- an important development as exploding technologies such as the Internet, multimedia, and videoconferencing are straining the capacity of long-distance networks. CIENA's dense wavelength division multiplexing (DWDM) MultiWave systems allow several signals to be transmitted simultaneously over the same circuit or channel. The systems include optical transmission terminals, optical amplifiers, and network management software (WaveWatcher). CIENA has agreed to be acquired by Tellabs, which makes telecommunications equipment to manage traffic on voice and data networks.
David Huber founded the company in 1992 after General Instrument shut the optical research lab he managed. He licensed some promising technology from his former employer and began looking for funding. Two years later he had the backing of Sevin Rosen Funds and lined up an experienced manager, Patrick Nettles, to head the company. In 1995 CIENA (a name that Nettles thought up while taking a shower) won its first customer -- Sprint. Sales to Sprint accounted for all of CIENA's revenues in 1996, although CIENA also finalized new supply agreements with WorldCom and Teleway Japan that year.
When CIENA went public in early 1997, it had the highest valuation of any venture-backed company at that time -- $3.7 billion. That year CIENA developed a second-generation product, the MultiWave Sentry, which can interface with more communications equipment and requires fewer transmission terminals; developed the 40-channel MultiWave 4000; and diversified into short-distance DWDM with the MultiWave Firefly (distances of 65 km or less). Also in 1997 Huber took his stock profits (a reported $300 million) and left over disagreements with Nettles concerning the company's research strategy.
In 1998 CIENA bought ATI Telecom International, which installs optical networking systems, for $53 million. It also agreed to pay rival Pirelli SpA $30 million (plus additional royalties) to settle a patent-infringement complaint. Tellabs agreed to acquire CIENA in a $7.1 billion deal in 1998. However, the deal was later slashed to $4.9 billion after AT&T announced it would not use CIENA's products to boost capacity of its phone networks.
|
