Big Threat to Competition from Infinera not Necessarily a Sure Thing

Implications: 1.      Infinera “bagged its first big Tier 1 account” a long time ago. 2.      Its systems were deployed in the original MCI network. 3.      Before British Telecom would consider Infinera seriously, it needs to be sure that there is a consistent upgrade path from one generation to another.

Analysis:  Actually, it could be argued that Infinera’s total concentration should be on making sure that any potential problems in its existing solution have been resolved.  Expansion into other markets at this time might not be the wisest move.  In particular, an emphasis on gaining traction in a totally different business – the cross-connect space – appears to way premature.  While a competitor to Ciena’s CoreDirector would be welcomed in the marketplace, Infinera cannot afford to look too far forward.  

At the moment, Infinera is not viewed as a serious competitor by any of the large optical equipment firms.  The CEO can talk all day about getting “traction in important new segments.”  But his first priority has to be on having full certainty that its current customers will not experience any difficulties.  In addition, while he can talk about movement towards “the low-end metro,” it seems that Infinera’s real niche is in long haul.