As the table below shows, Cisco carved out its niche in the metropolitan optical transport market with its acquisition of Cerent, but gained little traction in the cross-connect and long haul markets. Cisco secured market dominance in one of these four segments, while Ciena aggressively moved to win the other three categories.
Cisco’s subsequent ONS 15600 optical (O-E-O) switch couldn’t cut it against Ciena’s CoreDirector cross-connect offering, just as Ciena’s acquisition of Cyras for the K2 didn’t pan out in the metro.
The lesson for startups here is to be persistent as many great product ideas succeed [2]. Of the startups listed above – Cerent, Ciena, ONI, and Lightera – all found solid traction with their products targeted at specific markets. Others – Cyras, Qeyton, and Monterey – did not succeed in the marketplace, even after being nurtured by their acquirers.
[1] In December 2001, Fiber Optics News reported that Greg Mumford had been promoted to chief technical officer of Nortel Networks. He held many senior executive and general management positions during his 30-year career with Nortel up to that point. Mumford had previously held the role as president, optical long haul networks. Brian McFadden, also a former Nortel VP, succeeded him in that position. Mumford played a significant role in development of Nortel’s optical networking technology, including the 10 Gbps product portfolio; the 40 Gbps optical line system; and the OPTera Connect HDX, an optical switch. Soon after, Philippe Morin took charge of a shrinking Nortel Networks and he oversaw the Ciena acquisition of Nortel’s Metro Optical team in 2008. In this case, a startup – Ciena – swallowed part of it larger former competitor.
[2] The key competitors in optical transport, in the United States, as viewed by Cisco’s optical team in 2002 are shown below. For more on many of these challengers to Cisco’s market foray into the metropolitan optical transport space, please see Appendix 2 of The Upstart Startup.