I heard a rumour that Ericsson may be interested in acquiring Ciena, now especially with their Cyan merger (see http://www.truepulse.com/ciena-buys-cyan-and-blueplanet/). Whether my source has any validity, I don’t really know. But it is interesting to consider.
In February, Ericsson and Ciena announced a wide ranging agreement: to work jointly on IP/Optical convergence, Ericsson was to sell Ciena’s 6500 and 5400 platform, and the two were to collaborate on SDN capabilities. See http://www.ericsson.com/news/1762110 for the announcement. This made sense for Ericsson, as a way to shore up the weakest item in their product offering, optical transport. It also made sense for Ciena, still largely a North American company, to expand their distribution reach worldwide.
The change since the Ericsson/Ciena agreement has been Ciena announced acquisition of Cyan and their SDN product, Blue Planet. With Blue Planet, Ciena can offer Ericsson another key product shortcoming. Strategically, the fit makes sense.
The larger question is will the company have too many employees to manage?
Nokia with 62,000 employees is planning to purchase Alcatel-Lucent with 72,000 employees, for a total of 134,000, to become the largest telecom company in the world (see http://www.truepulse.com/nokia-takes-control-of-alcatel-lucent/). Will that be too big?
If Ericsson with 119,000 employees buys Ciena with 5,200 employees (plus Cyan has another 250), that would put the combined total near 125,000 employees.
Would that be too big? I worked at Lucent during their hay day at about 150,000 employees. That was definitely too large. It may not have been the only problem at Lucent. But, in my opinion, having to steer an organization and a culture of that size was major contributing factor to their decline.
In my opinion, Ericsson is big enough. Strategic synergies often do not materialize (here too, I think back to Lucent & Ascend, or Lucent & Alcatel). Major carriers have announced capital expenditure reductions for 2015, such as AT&T http://www.truepulse.com/att-reduce-capex-2015/. Now may be a good time for Ericsson to sit on the sidelines.