Sycamore super-sizes optical switching

ATLANTA—Sycamore Networks introduced the large grooming version of its SN 16000 intelligent optical switch, giving its beleaguered stock a brief shot of adrenaline.

The enhanced SN 16000 scales to a 1024 x 1024 OC-48/STM-16 fabric with full grooming and voice quality restoration. By using Sycamore’s SN 16000 instead of traditional digital cross-connects, service providers can realize tremendous cost, power and space savings, said Jeff Kiel, vice president and general manager of Sycamore’s Core Switching business unit.

On news of the Sycamore SN16000 product enhancement, Analyst Chet White of Wells Fargo Van Kasper upgraded the company to a “strong buy,” saying the large scale grooming switch would drive significant revenue for the company. The upgrade caused a short rally in Sycamore shares, but the stock fell about 3% by the end of trading.

Sycamore Networks has been under attack from financial analysts who claim the company badly needs to diversify its customer base, especially in light of competition from the likes of Ciena, with its CoreDirector product, and ONI Systems.

In an interview at Supercomm, Dan Smith, CEO of Sycamore, said ONI Systems only offers a “niche product” and does not address the breadth of solutions Sycamore offers. Ciena, on the other hand, has an advantage because it has been around since 1993, he said. Sycamore went public in 1999 with one product and one customer, but has added about one to two new customers every quarter, Smith said. “In the carrier business, it takes time to diversify,” he said.

Numerous analysts downgraded Sycamore shares last month after the company reported a wider than expected loss and predicted revenue for its fiscal fourth quarter would be between $50 million and $60 million, compared to $94 million in the same period last year.
Vince Ryan is Business Editor for Telephony. He can be reached at vryan@intertec.com.