Ericsson and Ciena announce strategic global agreement

Two companies are to jointly develop IP-optical convergence technology to accelerate the availability of open, programmable, software-defined networks

Ericsson and Ciena announce strategic global agreement

Ericsson and Ciena have announced a strategic global agreement to develop joint transport solutions for IP-optical convergence and service provider software-defined networking (SDN). As part of this agreement, Ericsson will offers Ciena's Converged Packet Optical portfolio, including the 6500 Packet-Optical Platform and 5400 family.

Ericsson will benefit from Ciena's optical technology leadership, including its WaveLogic coherent optical processors and global market presence. Combined with Ericsson's IP portfolio and Global Services organisation, service providers will be able to deploy IPoWDM technology and to evolve their transport network into a SDN-enabled infrastructure. This will result in lower total cost of ownership and faster deployment of new services.

"This strategic global agreement brings together two companies uniquely positioned to drive the adoption of more open, programmable networks. The integration of our industry-leading packet-optical technologies into Ericsson's portfolio, combined with our global distribution agreement, allows us to address a wider market with a combined offering," said Gary Smith, president and CEO, Ciena.

"As our industry moves toward a more open networking environment, collaboration within an ecosystem of specialists will be critical for innovation. Our SDN-focused joint development activities will enable us to deliver on network transformation strategies that dynamically support changing demands for network-level applications and services."

"The convergence between IP and Optical network layers in an Open SDN controlled architecture will enable more flexible and cost efficient networks for Service Providers" said Johan Wibergh, executive VP and Ericsson's Head of Business Unit Networks.

"This agreement allows us to offer Ciena's industry-leading Packet-Optical products. This is a great complement to our portfolio of 4th Generation IP products and will enable more complete and competitive solutions to our customers."

The strategic agreement is effective immediately, and go-to-market activities and solution integration efforts are underway.

Analyst comment

Commenting on the agreement, Ron Kline, principal network infrastructure analyst at Ovum, said: “The agreement positions Ciena as Ericsson’s preferred packet-optical supplier and gives Ericsson access to Ciena’s coherent optical technology for its SSR, a modern edge router capable of integrating L4-7 applications that should be readily adaptable to SDN/NFV.”

Kline continued: “The deal significantly broadens Ciena’s reach, giving it access to Ericsson’s strong global base of customers and its professional services team along with its IP expertise. The agreement gives Ericsson access to Ciena’s strong portfolio of converged packet optical gear that includes its WaveLogic3 coherent optical processing technology. As part of the agreement the two companies will collaborate on an open-source Layer 0-3 SDN controller.

“Assuming it’s executed well, the deal looks like a win/win for both companies. However, it does signal that Ericsson is admitting weakness in optical networking after three years of developing its SPO product line. Ciena is currently the third-ranked converged packet optical (CPO) vendor globally with 14% market share, whereas Ericsson is only ranked eleventh with 1% share. 

“The key to the deal is the collaborative SDN effort that combines resources at both companies. The battleground for differentiation is quickly moving to software and professional services. Ericsson is the second-ranked provider of telecom infrastructure services (just behind Cisco) and is number one in the network-related sub-segment.

“The agreement will likely have little direct impact on market results in the next 6-12 months. However, the partnership will form a strong ‘carrier SDN’ ecosystem that will resonate well with Ericsson’s and Ciena’s customers and open the door for increased opportunities from SDN/NFV,’ noted Kline.

“We expect this announcement to be part of a trend of specialist and full-service vendors collaborating to provide a stronger value proposition to communications service providers, which want fewer more strategic vendor relationships and more integrated solutions.

“The partnership could also open the door for future collaboration in the mobile backhaul market where both companies are quite strong. A combination of an integrated Ciena packet backhaul and Ericsson microwave radio would be tough to beat especially given Ericsson’s global strength in LTE,” concluded Kline.

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