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Ciena Corp  (CIEN)
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    Sector  Technology    Industry Communications Equipment

Ciena Corp

Business Description


CIENA is a leading global provider of innovative network solutions to telecommunications service providers and enterprises worldwide. Our customers include long distance carriers, local exchange carriers, cable operators, Internet service providers, wireless and wholesale carriers, resellers, governments, large businesses and non-profit institutions.

Currently, the major challenge service providers face is evolving their networks to process efficiently and deliver profitably a growing range of data services. The networks of most ILECs, IXCs and PTTs were designed to carry voice traffic and to deliver voice services. As the demand for data services grew, these carriers built separate data networks and operated them concurrently with their existing voice networks. Revenue from data services continues to grow, but in most cases not nearly as fast as data traffic.

With data surpassing voice as the dominant network traffic but lagging in terms of profitability, carriers are looking for more cost-effective and efficient ways to deliver the range of voice and data services that their customers are demanding. Most have concluded that the only way to offer advanced voice, data, video and other services profitably is to consolidate their separate voice and data networks onto a single converged network, one that is capable of delivering multiple services over a single infrastructure.

While this vision of eventual network convergence is widely shared, there are divergent perceptions regarding how it will come about. Some equipment vendors envision that the converged network will be based on a completely new network infrastructure. We believe, however, that the transition to a converged all-service network will be an evolutionary process, one in which carriers will leverage their existing network investment. The majority of our strategic initiatives, partnerships and investments are intended to capitalize on this evolution.

CIENA’s solutions harness innovation to deliver improved network economics. Our intelligent networking solutions are designed to enable service providers to transition from inefficient, legacy, voice-centric networks to more efficient, data-friendly networks. CIENA’s systems and their intelligent networking software address the network scalability and capital spending challenges and the escalating operational costs faced by service providers.

CIENA’s equipment can replace multiple legacy network elements with fewer, more intelligent network elements, thereby simplifying the network and lowering carriers’ initial capital costs and ongoing operating expenses.

The software functionality of CIENA’s equipment creates a network environment in which distributed intelligence – intelligence at the network element level – takes the place of centralized network intelligence. As a result, CIENA networks can “think” for themselves, making dynamic decisions without human intervention thereby facilitating provisioning and protection capabilities and lowering associated operating costs.

CIENA’s equipment is designed to reduce network operating costs by enabling carriers to manage network traffic and network bandwidth more efficiently.

CIENA’s equipment is designed to enable carriers to shorten the time it takes to provision services, in some cases from months to nearly real-time, thereby accelerating revenue generation.

In addition to capital and operational cost savings, CIENA’s equipment and network management software is designed to enable carriers to offer new, revenue-generating and service-differentiating services.

In addition to those products developed internally or added through acquisition, CIENA has executed reseller agreements with both Laurel Networks and Luminous Networks. Under the agreement with Laurel, which is exclusive as to certain designated customers, CIENA markets, sells and supports Laurel Networks’ ST200™ Service Edge Router to service providers worldwide. Under the agreement with Luminous, CIENA markets, sells and supports Luminous Networks’ entire PacketWave™ family of products.

Services

CIENA provides a comprehensive portfolio of service and support offerings for its products. Our offerings include:

Deployment services including network design, product installation, network integration testing and acceptance testing;

Maintenance services including parts exchange, engineering dispatch, advanced technical support and hardware and software warranty extensions; and

Training and documentation services including product training, service partner training and documentation services.

COMPETITION

Competition in the telecommunications equipment industry is intense, and became increasingly so as the market for communications networking equipment declined. CIENA’s competition is dominated by a small number of very large, usually multi-national, vertically integrated companies. Each of which has substantially greater financial, technical and marketing resources, and greater manufacturing capacity as well as better established relationships with the incumbent carriers than CIENA. Included among CIENA’s competitors are: Alcatel, Cisco Systems, Inc. (“Cisco”), Fujitsu Group (“Fujitsu”), Hitachi Ltd. (“Hitachi”), Huawei Technologies Co. Ltd (“Huawei”), Lucent Technologies Inc. (“Lucent”), Marconi Corporation (“Marconi”), NEC Corporation (“NEC”), Nortel Networks (“Nortel”), Siemens AG (“Siemens”), Telefon AB LM Ericsson (“Ericsson”), and Tellabs, Inc. (“Tellabs”). There are also several smaller, but established companies, such as ADVA AG Optical Networking, and Sycamore Networks, Inc., that offer one or more products that compete directly or indirectly with our offerings. In addition, there are a variety of earlier-stage companies with products targeted at the communications networking market in some stage of development or deployment, most of them employing advanced technology that could offer advantages over products offered by CIENA.





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