Cisco drops a wavelength

Once accustomed to making around 22 acquisitions a year during its glory days, Cisco Systems has turned to cutting its losses on some of those acquisitions, including its $500 million August 1999 acquisition of Monterey Networks.

Just a few weeks after denying such rumors, Carl Russo, Cisco's vice president of the optical networking group, last week confirmed Cisco is discontinuing the ONS 15900 Wavelength Router optical cross-connect and will redeploy workers in the unit. “The market has taken a long time to get going; the core mesh market is just not moving as fast as we had anticipated,” Russo said. He also noted the decision reflects Cisco's shift of spending from the core to the metropolitan area.

Most providers have built out the core of their networks at this point, so changing the core when spending is tighter is not a necessity, he said. Instead, the focus is getting capacity to metro customers.

“Bandwidth isn't a problem any more,” Russo said. “Getting customers on to the network is.”

Cisco's deployment of the Wavelength Router has been spotty. Last September, Cisco announced WorldCom had completed a trial of the router but no deployment times were given. Providers such as Cambrian Communications, Petronet and Canada's Nexxia apparently planned to use the product, but no contracts were signed.

Russo denied any technical problems as a reason for the discontinuation. Despite the cancellation, Russo doesn't believe dropping the Wavelength Router creates a void in Cisco's portfolio.

“If the market was growing like we anticipated, it would be a gaping hole. But it isn't,” Russo said.

Meanwhile, others appear to be doing well in the space, said Chris Nicoll, vice president of Current Analysis.

“Tellium is doing well with the Aurora [optical cross-connect], and they've been selling it and putting it into customer networks. But the 15900 wasn't performing competitively in terms of technical problems and scalability,” Nicoll said.

Nicoll believes the cancellation creates a hole for Cisco, but the vendor can return to it in a couple of years. “Cisco's strength is really in the metro, and they were forced into the bigger market of the long-haul,” Nicoll said.