City dwellers: Nortel buys Cambrian, adds metro DWDM to data networking strategy

Nortel Networks made a strong optical networking move last week when it purchased Cambrian Systems for $300 million, adding a developed dense wavelength division multiplexing product for metropolitan area networks to its coffer.

Coming on the heels of Nortel's acquisition of Bay Networks, the Cambrian buy adds another significant peg to Nortel's growing data networking strategy. Nortel had been looking to forge a more limited relationship with Cambrian because of its early lead in metro DWDM but ultimately decided that an outright purchase made the most sense.

"It looked so good we said, 'Why not buy it all?'" said John Roth, vice chairman and CEO of Nortel. "If you really want to go fast, you'd better have it all."

Metro DWDM-particularly in the form that Cambrian is pushing-is poised to become a hot technology for both carriers and large enterprise customers with heavy traffic needs.

"We're starting to see opportunities with non-traditional DWDM customers such as financial institutions," said Brian McFadden, vice president and general manager of optical network applications for Nortel. "This product is all about how we bridge from the enterprise and get traffic onto the core."

Part of Cambrian's approach to the metro market involves building a DWDM backbone and Sonet virtual rings to enable services such as gigabit Ethernet, a solution that it expects to appeal to competitive local exchange carriers.

"To make an offer at the metro level, you have to prove in at less than OC-48," McFadden said. "Every customer we talked to said that Cambrian had figured this out."

Cambrian has pursued the belief that the potential benefits of DWDM applications extend beyond the needs of carriers whose fiber capacity is tapped.

"It's not all about fiber relief-it's about new data networking approaches, connectivity and scalability," said Don Smith, president of Cambrian.

Cambrian, which has yet to make public any customers for its OPTera platform, has been seeking an alliance all along with a larger entity that would be able to position its offering in context.

"It's a vital piece of the jigsaw puzzle, but a piece that needed other pieces around it," Smith said. "We set out 18 months ago to create mindshare and the value of an open, transparent platform in metro."

For Nortel to buy Cambrian, Newbridge Networks had to sell its 40% stake in the company. Nortel will continue to honor the OEM and distribution agreement Cambrian and Newbridge had in place.