Ciena announced that Lumentum, NeoPhotonics, and Oclaro will incorporate WaveLogic AI coherent DSP technology into their optical modules.  This should help extend 400-Gbps capabilities to optical modules.  Although commercial arrangements were not announced, we can assume that Ciena will be generating licensing fees.

You may ask that if WaveLogic truly gave Ciena a competitive advantage, why would they want to share license it?  Furthermore, why would Ciena’s competitors want to purchase it?

Well, if WaveLogic truly gave Ciena a competitive advantage, why would they want to share it? Well optical development is really expensive.  If they can distribute those costs to more customers, the economics of the whole project becomes much more attractive.  And in this way, Ciena is still generating profits from service providers that would be buying from a Ciena competitor in any case.

But is there not a risk that optical telecom equipment manufacturers Nokia, Fujitsu, Huawei, or Cisco are scared of helping Ciena, and potentially revealing proprietary information to Ciena?  Not really.  Ciena is working with optical module vendors Lumentum, NeoPhotonics and Oclaro.  Any proprietary information from Nokia, Fujitsu, Huawei, or Cisco is only revealed to the optical module vendors.  The telecom equipment manufacturers will buy the best product, even if it sends a few dollars towards Ciena.

Ciena’s James Frodsham, SVP and Chief Strategy Officer said “Making our WaveLogic coherent optics available to other industry players facilitates greater choice for network operators while accelerating innovation and driving interoperability across the industry. And for Ciena, we’re able to further diversify our business by accessing new geographies and addressing new customer segments to maximize the monetization potential of our modem technology.”

For more information on WaveLogic, refer to http://www1.ciena.com/about/newsroom/press-releases/Ciena-WaveLogic-Coherent-Optical-Processors-Power-Next-Phase-of-High-Capacity-Networking-.html

For more information on Ciena’s announcement, see http://www.ciena.com/about/newsroom/press-releases/Ciena-Expands-Addressable-Market-by-Opening-Global-Distribution-Channel-for-WaveLogic-Coherent-Technology.html