Ciena doesn't limit itself to just one color of the spectrum. The company makes transport and switching equipment that increases the capacity of long-distance fiber-optic networks by transmitting multiple light signals simultaneously over the same circuit. It also sells optical transport systems for metro and enterprise wide-area networks, as well as broadband access products that enable communications companies to deliver Internet protocol (IP) services, such as VoIP, IP video, and DSL. Ciena serves telecommunications service providers, cable companies, large enterprises, and government entities. The company gets more than 50% of its sales in the US.
Revenue rose about 41% in 2011 over 2010, thanks in part to the 2010 acquisition of the optical networking and Carrier Ethernet assets of Nortel's Metro Ethernet Networks business.
By segment, packet-optical transport, which represented 64% of revenue, went up 59% behind strong demand for the 6500 Packet-Optical Platform, the 4200 Advanced Services Platform, the 6100 Multiservice Optical Platform, the 5100/5200 Advanced Services Platform, and Common Photonic Layer products. This segment includes products used by network operators to increase network capacity and the speed of high-bandwidth services.
The software and services segment, 19% of revenue, rose 43% to meet more demand for maintenance support, installation, deployment, and consulting. Software and services includes Ciena One, the On-Center Network & Service Management Suite, and the OMEA and Preside platforms.
Packet-optical switching, 8% of revenue, increased 32%, supported by demand for 5430 Reconfigurable Switching Systems and the CoreDirector Multiservice Optical Switches. This segment includes products that create automated optical infrastructures that support enterprise and consumer-oriented network services.
Carrier-Ethernet solutions, accounting for 7% of revenue, decreased 28%, owing to lower demand for the 3000 and 5000 families of service delivery switches, service aggregation switches, and legacy metro Ethernet and broadband products. Products in this segment support wireless backhaul infrastructures and business data services.
Holding more than 1,300 US patents and more than 400 foreign patents, Ciena is focusing product development in all its segments on new demand for converged optical Ethernet networking products and services that support mobile devices, video applications, and cloud and virtual computing. It has also been expanding geographically, including in Brazil, India, Japan, the Middle East, and Russia, and in customer markets that include enterprises, wireless operators, cable operators, submarine network operators, Internet content providers, cloud infrastructure providers, research and education organizations, and governments.
Sales & Marketing
Ciena has a limited number of customers; its top 10 clients accounted for about 56% of its sales in fiscal 2011. It counts AT&T (more than 15% of sales) as its top customer. The majority of manufacturing Ciena's products is done by contract electronics manufacturers, principally located in Canada, China, Mexico, Thailand, and the US. For some product lines, the company does its own module assembly, final systems integration, and testing.
Mergers & Acquisitions
In 2009 Ciena agreed to acquire the the optical networking and carrier Ethernet assets of rival Nortel's Metro Ethernet Networks business. The company first offered $390 million in cash and 10 million shares of Ciena common stock, valuing the potential transaction at more than $500 million. Facing a competing bid from Nokia Siemens Networks for the business, Ciena increased its offer to $530 million in cash and convertible notes worth $239 million, boosting the deal's value to $769 million. The company finally closed the deal in 2010, paying about $774 million in cash, subject to a working capital adjustment.
In bankruptcy reorganization, Nortel is auctioning off its assets to various buyers. The purchase widens Ciena's geographic reach and brings together complementary technologies in switching and transport, the company noted. Ciena hired at least 2,000 Nortel employees, nearly doubling its headcount as a result. – less
3 salaries reported
$118,310 per year
4 salaries reported
$104,365 per year