Ciena and Ericsson enter into strategic partnership

ENGLAND, UK: Ciena and Ericsson announced a Strategic Global Agreement and partnership aimed at accelerating packet optical and SDN sales and development for both companies.

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.

"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 percent market share, whereas Ericsson is only ranked eleventh with 1 percent 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 subsegment.

"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. 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."