Ciena's new aim: broadband solutions

Following a decline in its core market and a number of recent acquisitions, Ciena is embarking on a corporate re-positioning aimed at showcasing the vendor's capabilities as a supplier of broadband solutions to carriers, rather than a maker of optical transport hardware, Telephony has learned.

The re-positioning doesn't include any new products, but does include a new logo and new marketing messages. The new logo has a "softer" look and feel than the Linthicum, Md., company's older logo, which had a "sharper, more mechanical looking of a hardware vendor," said Thom Mock, vice president of strategic planning at Ciena.

Gary Smith, president and CEO of Ciena, said the campaign to portray the firm in a new light followed a spate of four acquisitions over the course of 18 months which brought in new platforms, including broadband digital loop carrier access system technology from Catena Networks. Other acquisitions the company made over the last two years included Internet Photonics, Akara, Wavesmith Networks and ONI Systems.

These deals made it apparent that Ciena was diversifying away from optical, but left some uncertainty in the minds of industry watchers just what kind of company it was trying to become.

"It wasn't clear where they were going and what they were doing," said Dana Cooperson, group director at market research firm RHK. Cooperson first made that opinion known back in February, in a lengthy research note compiled just after Ciena announced the acquisitions of Catena and Internet Photonics.

Mock admitted a not necessarily incorrect perception on the part of many people that Ciena was trying to do too much at once. "There was a view that were were doing a lot of things and not really focused on any one of them," he said.

Ron Westfall, analyst at Current Analysis, added, "They were due for an overhaul of their corporate messaging. To their credit, they recognized they were having a coherency challenge."

Ciena CEO Smith said the vendor has been working to clarify its mission since the announcement of the Catena and Internet Photonics deals, but didn't make an announcement about it sooner because it wanted to fine-tune it message.

"It's a fairly simple message," Smith said. "We're trying not to be all things to all people. The world doesn't need another broad-based, soup-to-nuts vendor." The new effort also will be more focused on providing software-based solutions and professional services to carriers, rather than closing equipment contracts.

Smith said he thinks the new marketing tactic will immediately benefit Ciena by helping the company get closer to new customers such as cable providers, and carriers in international regional markets. It also will clarify Ciena's mission to RBOCs and other telcos that having been watching the vendor make acquisitions and move away from its traditional optical focus, he added.

Cooperson said she would soon like to see a carrier deal or other kind of success story that proves the re-positioning is the right idea.

Ciena's announcement follows other recent examples of telecom equipment vendors becoming conscious of marketing challenges, Westfall said, noting that Lucent Technologies and Norterl Networks have appointed chief marketing officers to revamp their marketing approaches.

"Hardware is a commodity now," he said. "Manufacturing is getting outsourced. Services are where the revenue is coming from."

Ciena's Mock said the vendor will not sacrifice innovation to spend more time polishing its new image, but he said that innovation will be more "application-oriented and solution-oriented. A lot of the hardware advancements that had to happen in the industry happened in the last decade. Now, the automation and leveraging of capacity is about software."

Still, Cooperson said she doesn't expect Ciena to exit the optical transport business entirely. "These things happen in cycles," she said. "Services providers will have to go back to investing in the core eventually."