In an effort to keep up with rival Cisco Systems in the exploding market for
optical networking technology and equipment, Lucent Technologies is reportedly
close to paying $6 billion to take over start-up Chromatis Networks of Herndon,
Virginia.
Chromatis has developed advanced new optical networking equipment that allows
voice, data and video to run efficiently over the optical network on a company
campus or across an entire city. The equipment is still in beta test development
phase.
Cisco has invested close to $10 billion in the past year in companies
specializing in high-end optical networking and communications technologies. One
such investment was a whopping $7 billion take-over of Cerent, a start-up like
Chromatis with no revenue to speak of. But in less than six months, Cisco has
turned the investment into a major new source of sales and profits. The company
estimates Cerent-based sales could top $1 billion this year.