Cisco will be able to add support for optical-based networking topologies--the dominant technology "fabric" used by telcos--to its line of switching and routing equipment, enabling the firm to gain a greater foothold in other segments of service provider networks. The deal is part of a five-phase strategy focused on fiber-optic technology from Ciena.
On a wider scope, the move positions Cisco as a more direct competitor to large voice-oriented firms such as Northern Telecom and Lucent Technologies, two companies that are increasing their efforts on the data-centric world.
Cisco has a long-established stranglehold on the back-end routing devices that essentially speed data packets across the public Net infrastructure. But the networking industry is increasingly focusing on the opportunity for equipment sales as traditional voice-based providers add value-added data services to their portfolio of offerings.
Ciena has built a lucrative business by providing fiber-based devices that can send more than one communications signal across a single line, a technology called "multiplexing." This method is increasingly being used by voice-centric telco firms and, along with SONet (synchronous optical networking), is regarded as a primary means to handle the convergence of voice and data networks based on IP (Internet protocol).
News of the partnership will likely lead to speculation that Ciena is an acquisition target of Cisco. It could also rule out partnership opportunities with Lucent and Nortel.
The deal with Ciena also includes the creation of a new Optical Internetworking Forum to promote the deployment of next-generation network topologies based on fiber-optics.
As part of the relationship, Cisco also announced a new high-speed interface for its high-end 12000 Gigabit Switch Router that will be available in the third quarter with a price tag of $75,000.
In related activities, Cisco announced a partnership with NBX to deliver voice capabilities over data networks for small- and medium-sized businesses through its IOS operating system. The company also announced deals focused on policy-based network management software with Fremont, California-based DevSoft and Bedford, Massachusetts-based American Internet.