Ciena wraps Nortel MEN purchase; unveils new product direction

On Friday, Ciena officially closed the books on its acquisition of Nortel Networks' Metro Ethernet Networks (MEN) division while revealing its new optical and packet networking product strategy.

After engaging in a bidding war with Nokia Siemens Networks in late-November, Ciena emerged as the victor for Nortel's MEN unit by paying $773.8 million in cash. Initially, Ciena was going to purchase the unit for $769 million with some of the deal funded by convertible notes, but instead opted to go with a cash equivalent of $243.8 million.

Ciena will not only expand its geographic reach, but also gain additional key customers and new technology. "The acquisition of these assets accelerates Ciena's overall strategy and gives us stronger operating leverage to continue investing in innovation that will allow us to deliver on our vision for next-generation networks," said Gary Smith, Ciena's president and CEO in a release.

With the Nortel MEN deal in the can, Ciena has also laid out a new product plan that will put Nortel's OME 6500 and its own 5400 into the limelight. Both of these products are key to helping Ciena expand their packet optical and 40-100 Gbps networking vision. While Ciena had been developing a 100 Gbps networking for short-haul applications, the majority of its technology was targeted mostly at low-latency short-haul applications including NYSE Euronext stock exchange's 100 Gbps data centers. Nortel brings its long-haul 100 Gbps experience and technology that's a part of high profile trials with both Telstra and Verizon.

"As we bring Nortel's Adaptive Optical Engine into the company that gives us number one market share in 40 G and makes it much easier to deploy 40 G and 100 G," said Tom Mock, Ciena's senior vice president of strategic planning. "Their coherent technology basically allows 40 G and 100 G to operate over any kind of fiber and go longer distances."

To maintain consistency across the disparate product lines, Ciena plans to leverage common management tools, including moving the Nortel product line to the OneOS concept of a common, multilayer control plane.

Along with acquiring new technology, Ciena has also announced that in addition to taking on many existing Nortel employees, it has appointed Philippe Morin, the former president of Nortel's MEN, as Ciena's new senior VP of global products group.

For more:
- see release on the completion of the Nortel deal here
- xChange has this article
- Light Reading has this article

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