In an interview with Telephony at the Optical Fiber Communication Conference, Ciena Senior Vice President of Strategic Planning Thomas Mock defended his company’s recent spate of acquisitions, including access equipment vendor Catena Networks and Ethernet transport player Internet Photonics.

In response to critics’ fears that Ciena will have trouble integrating acquired companies such as Wavesmith, Akara, Catena and Internet Photonics (IPI), Mock said, "We recognize that as an issue," but argued that the qualities Ciena demands in acquisition candidates will make integration easier. Those qualities are a generally available product, a solid customer base, an established sales force and maturity in the market, Mock said.

For more than a year, Internet Photonics has been selling carrier-class Ethernet based on dense wavelength-division multiplexing (DWDM) and targeted at the delivery of video-on-demand and high-definition television. It claims to have six of the top ten American cable companies as customers, including Cablevision, and it took in more than $10 million in revenue in the fourth quarter of 2003.

ONI Systems, which Ciena acquired in 2002, also gave Ciena a DWDM Ethernet transport product, but one that is "Sonet-focused" and "more of a traditional telco product," Mock said. There is very little overlap between the portfolios of ONI and IPI, he said (the latter being focused on lower speed and less expensive point-to-point connections whereas the former is focused on a higher-end market), but Ciena could look to combine products from each company in the long term. He also suggested that Ciena might be able to eventually mix IPI’s products with Catena’s broadband gear, which is typically aggregated with WDM.

All Ciena’s recent acquisitions are aimed at moving the company out of the infrastructure business and into the service delivery business: Wavesmith for ATM and frame relay service, Akara for storage extension, Catena for broadband and IPI for carrier-class Ethernet and video. Though Ciena has been posting sinking revenues, it still has more than $1 billion in cash and hasn’t ruled out future acquisitions.

In recent months, Ciena also has agreed to invest in and resell the products of IP edge router maker Laurel Networks and RPR vendor Luminous Networks without acquiring them.

"A lot of it comes down to: Is it essential to our product portfolio or just nice to have?" Mock said.

Ciena intends to treat its acquisitions as divisions of the company, allowing IPI to remain in its New Jersey headquarters as it becomes part of Ciena’s Metro and Enterprise Solutions group.

"The guys at IPI have built a good sales channel into the MSO market." Mock said. "We have no plans to wholesale replace [IPI] managers or whack out a bunch of folks."