Network vendor Ciena announced a pair of acquisitions designed to bolster its range of metro and edge offerings, buying hardware supplier Tibit for $210 million and software company Benu Networks for an undisclosed sum. Some 60-plus employees will join Ciena via the transactions.
Founded in 2014, Tibit offers open pluggable PON products, with its portfolio headlined by the MicroPlug Optical Line Terminal. Ciena has had a close relationship with the company for some time now, having invested in Tibit in 2016. It is currently Tibit’s largest shareholder and the acquisition deal will see Ciena buy up the company’s remaining shares. Meanwhile, the deal with Benu will net Ciena new subscriber management capabilities.
Ciena already offers a range of metro and edge products, including 400G and 800G solutions, routing and switching platforms, and automation and analytics via its Blue Planet software. Joe Marsella, VP of Metro and Edge at Ciena, told Fierce that the deals with Tibit and Benu will allow Ciena to more aggressively pursue the residential broadband, enterprise business services and fixed-wireless access markets. These, he said, represent a “significant addressable market” which is expected to grow from $6 billion in 2020 to $14 billion over the coming years.
Marsella said that though Ciena was already using Tibit’s technology in its products, the deal will “enable us to further accelerate the integration of their solutions into our own while also accelerating our time to market with future innovations, such as 25G PON.”
He added Ciena plans to maintain Tibit’s technology as an open solution “including working to maintain all existing supplier relationships.” And despite a rocky supply environment, Marsella said Ciena expects it won’t have any issues meeting project demand with Tibit.
On the Benu side, Marsella said the subscriber management capabilities these can be combined with Ciena’s PON portfolio, Edge Routing products and go-to-market strength to address “a greater set of sales opportunities.”
Dell'Oro Group VP Jeff Heynen told Fierce the acquisitions will bolster Ciena's ability to serve the fiber-to-the-home market, which is red hot and will likely stay that way for years to come. That's in part because government subsidy money will ensure spending in this market remains strong even if private investments from operators cool off.
Interestingly, he added it could also provide upside for Ciena in the cable market, where operators are looking to push fiber deeper into their networks and use PON for some greenfield projects. Following the transactions, Ciena will be able to offer "a platform that combines the access part plus the routing part into a single platform. And that’s fairly unique," he said.
Heynen also noted that with Benu's software and virtual broadband network gateway in the mix, Ciena could also pitch itself as a one-stop-shop for smaller and rural operators. "They just don’t have the scale usually to need a full fledged BNG so having a virtual option allows them to get in market quicker and pay as you grow," he explained.
The deals are expected to close in Ciena’s FQ1 2023, which will end in January.
Late last year, Ciena purchased Vyatta from AT&T as part of a bid to strengthen its play in the routing and switching market. Given Ciena was already a major investor in and customer of Tibit, Heynen said it's not exactly clear why the company decided to buy now. But he speculated it could be because a competitor was looking at purchasing the company and Ciena wanted to head off that possibility.
This story has been updated with comments from Dell'Oro Group VP Jeff Heynen.