By May 2002, Nortel Networks began messaging the Cerent story, which was eagerly adopted by Cisco Systems by mid-1999. Nortel arrived to the (metropolitan optical transport) party too late. And the Canadian company never caught up to its newfound competitor in the optical transport space . . .
Nortel in mid-2002 [1]: “Optical Ethernet solves a particular problem in that it gives you a lot of simplicity across metro area networks,” says Eric MacDonald, Nortel senior manager of optical Ethernet marketing.
Observation: “Optical Ethernet” was Nortel-speak for multi-service provisioning platform (MSPP) solutions that company lacked until they scrapped their old S/DMS TransportNode in favor of completely new competitive platforms for the metro network. Nortel secretly loved the simplicity of Cisco’s over-arching IP + Optical solutions and so Nortel introduced the phrase “Optical Ethernet.”
Observation: “Optical Ethernet” was Nortel-speak for multi-service provisioning platform (MSPP) solutions that company lacked until they scrapped their old S/DMS TransportNode in favor of completely new competitive platforms for the metro network. Nortel secretly loved the simplicity of Cisco’s over-arching IP + Optical solutions and so Nortel introduced the phrase “Optical Ethernet.”
Nortel in mid-2002: “The Carrier’s pain point is the metro area network,” MacDonald says.
Observation: This pain point was addressed by Cerent in 1998 and only recognized by the “evil oligopoly,” as Carl Russo called the industry’s big competitors, some four years after the bandwidth bottleneck in the metro problem was identified by his upstart startup [2].
Nortel said in mid-2002: The metro network has the service providers’ “highest concentration of customers, and their highest concentration of costs too because they have to deploy a lot of expensive edge equipment that is specialized for whatever technology they have to feed into that individual customer. So optical Ethernet is a way to simplify those networks, simplify the capital expenditures and operational expenditures.”
Observation: Which is why hundreds of service providers rewarded Cerent-Cisco with billions of dollars in their precious capital expenditures to build MSPP-based (optical Ethernet or IP + Optical) networks.
Nortel said in mid-2002: “[Optical Ethernet] removes the need to do those translations between optics to ATM to Ethernet in local area networks and keeps a single language – Ethernet – from a local area network all the way through wide area networks.”
Observation: Cisco had been on the Ethernet bandwagon for years. By 2002, Nortel’s ATM product sales had tanked, even after they were aggressively promoted at the beginning of the millennium.
Observation: This pain point was addressed by Cerent in 1998 and only recognized by the “evil oligopoly,” as Carl Russo called the industry’s big competitors, some four years after the bandwidth bottleneck in the metro problem was identified by his upstart startup [2].
Nortel said in mid-2002: The metro network has the service providers’ “highest concentration of customers, and their highest concentration of costs too because they have to deploy a lot of expensive edge equipment that is specialized for whatever technology they have to feed into that individual customer. So optical Ethernet is a way to simplify those networks, simplify the capital expenditures and operational expenditures.”
Observation: Which is why hundreds of service providers rewarded Cerent-Cisco with billions of dollars in their precious capital expenditures to build MSPP-based (optical Ethernet or IP + Optical) networks.
Nortel said in mid-2002: “[Optical Ethernet] removes the need to do those translations between optics to ATM to Ethernet in local area networks and keeps a single language – Ethernet – from a local area network all the way through wide area networks.”
Observation: Cisco had been on the Ethernet bandwagon for years. By 2002, Nortel’s ATM product sales had tanked, even after they were aggressively promoted at the beginning of the millennium.
Nortel said in mid-2002: “[A] typical service provider that offers a managed optical Ethernet service can increase their bandwidth sold by five times, driving up revenues by 20 percent . . . Moreover, the service provider can achieve this revenue level without cannibalizing their existing telecom services.”
Observation: This was exactly Cerent’s (then Cisco’s) value proposition in breaking the metropolitan bandwidth bottleneck as early as 1998. The Cerent 454 next generation optical transport solution fit into existing telco networks by embracing SONET services for voice carriage, and supercharging those same fibers by carrying Ethernet-based services (for data) simultaneously [3].
Observation: This was exactly Cerent’s (then Cisco’s) value proposition in breaking the metropolitan bandwidth bottleneck as early as 1998. The Cerent 454 next generation optical transport solution fit into existing telco networks by embracing SONET services for voice carriage, and supercharging those same fibers by carrying Ethernet-based services (for data) simultaneously [3].
Nortel said in mid-2002: Key features of optical Ethernet are the two features that allow for cost-effective, simple provisioning: auto-discovery and simple end point provisioning. These features drive lower staff costs and speed time to revenue for the service provider. New customer sites can be provisioned in hours, not days or weeks, without having to re-provision the entire network.
Observation: This was Cerent’s MSPP functionality and value proposition parlayed in 1998. Auto-discovery was a key feature of the Cerent 454 and also A-Z provisioning, even supported across multiple product platforms.
As the oft-used Charles Colton quote goes, “Imitation is the sincerest form of flattery.”
[1] The Case for Optical Ethernet: Is It Enough To Make Carriers Spend Again, Fiber Optics News, May 6, 2002, pp.1–3.
[2] The evil oligopoly included Nortel, Lucent, Fujitsu, and Alcatel, companies that tried to use legacy SONET transport solutions in the evolving metro network instead of innovating with MSPP-type solutions needed to accommodate a variety of services.
Observation: This was Cerent’s MSPP functionality and value proposition parlayed in 1998. Auto-discovery was a key feature of the Cerent 454 and also A-Z provisioning, even supported across multiple product platforms.
As the oft-used Charles Colton quote goes, “Imitation is the sincerest form of flattery.”
[1] The Case for Optical Ethernet: Is It Enough To Make Carriers Spend Again, Fiber Optics News, May 6, 2002, pp.1–3.
[2] The evil oligopoly included Nortel, Lucent, Fujitsu, and Alcatel, companies that tried to use legacy SONET transport solutions in the evolving metro network instead of innovating with MSPP-type solutions needed to accommodate a variety of services.
[3] At the time, video traffic was typically carried in DS3 (SONET STS-1) bandwidth increments.