Summary
1. Usually, it’s three strikes and you’re out. 2. Ciena has taken four big swings, and missed, at packet-type company purchases – and while it is very doubtful that it would take another one in the short term, of course, it could not be ruled out in the long term. 3. It has paid a high price because of its fixation on being called an Ethernet company.
Analysis
In the past, Ciena has strived to question and shut down legitimate criticism of its product direction. Going back to its investment in Equipe, certain industry analysts pointed out the lack of logic and patience exhibited by the supplier. If one throws in four of its major acquisitions that involved packet technology (Omnia, WaveSmith. Catena, and World Wide Packets) it amounts to over $1.2 billion in investment -- with very little to show for them. Conversely, in two cases in which Ciena purchased solutions that tied directly to its core strength in optical transport, and are now the big drivers of its future growth, the CN 4200, and the CoreDirector it paid less than half that amount. The source article points out the final nail in the coffin for the WaveSmith operation.
Ciena is trying to keep hope alive on the World Wide Packets purchase as it relates to AT&T. Certainly, for what appears to be only one of the parties, it has taken longer than anticipated. It seems that Ciena has not gone much beyond the revenue stream that WWP brought with it at the time of the purchase – and it is does not look like there is a shot for anything new in the near term.
