Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Ciena (CIEN) -- Ignore unavailable to you. Want to Upgrade?

To: DukeCrow who wrote (9334)	7/12/2000 4:54:33 PM
From: jghutchison	Read Replies (1) \| Respond to of 12623

Ali, "I agree that Alcatel is no heavyweight in DWDM, but I think they are competent and gaining expertise. In optical switching, Alcatel is currently testing Agilent's optical switch. They may be the first vendor to sell the Agilent switch to carriers. They're taking the right approach and are integrating others technology into their own platform. By the beginning of 2001, I think Alcatel will have caught up to (and maybe surpassed) most vendors in optical switching (as far as technology is concerned, not sales) if Agilent's switch is as formidable as people claim it to be. Remember that Alcatel is a major vendor of cross-connects, so they surely know that they need to establish an optical cross-connect/switching competence within a reasonable timeframe, or they will lose business and marketshare." I like the concept of Agilent's switch, and I like the company. However, one must bear in mind that this switch, although highly scalable, can only switch entire lambdas, and must do so via an operating system that reacts to electronic input. If Agilent were to develop the OS, then it would most likely be a "one size fits all" approach. If Alcatel were to develop the OS without benefit of foresight, hindsight, and looking inside the box, then it would be likened to big brother's hand-me-downs. Hardly dressed for success in either case. I think one can argue that the best approach is to tightly integrate the optical switch and its OS with DWDM, and have a handsome suite, or suit if you will. This is Ciena's forte. Sycamore and Corvis seem to be doing alright here also with the systems integration. You cannot buy components on the open market using a mix and match approach and achieve optimum performance and cost effectiveness, nor can you direct and control their development. The result is often a kludge. And a generation behind. Alcatel may well be competent and gaining expertise. But can they gain it fast enough? Alcatel is bringing up the rear. They have to run faster than anyone else. Do their engineers have any incentive to do whatever it takes to get the job done? I think not. They must acquire, or die a slow death. One needs only to look at Lucent as a perfect example. In spite of Lucent's ownership of Bell Labs, a technological marvel staffed by some of the brightest people on the planet, Lucent cannot pull off their own in-house developments in time to meet the market. The Cyras acquisition is a perfect example. Lucent must acquire, Nortel must acquire, and so does Alcatel. The smaller firms have the entrepreneurial drive to get the job done. Hence the feeding frenzy, which ain't about to quit. Please note that I am in no way arguing for a marriage of Alcatel and Ciena. The pros and cons of this are another topic. Jack Hutchison