Ciena takes a thousand points of light and puts them in motion at the same time. The company makes transport and switching equipment that increases the capacity of long-distance fiber-optic networks by transmitting multiple light signals simultaneously over the same circuit. It also sells optical transport systems for metro and enterprise wide-area networks, as well as broadband access products that enable communications companies to deliver Internet protocol (IP) services, such as VoIP, IP video, and DSL. Ciena serves telecommunications service providers, cable companies, large enterprises, and government entities.
Ciena's converged packet optical products represent almost two thirds of its total revenue thanks to its products including the 6500 Packet-Optical Platform, the 5430 Reconfigurable Switching System, the line of CoreDirector Multiservice Optical Switches, and embedded operating system software. This segment includes products used by network operators to increase network capacity and the speed of high-bandwidth services.
The software and services segment, about 20% of sales, offers maintenance support, installation, deployment, and consulting services. Software and services includes Ciena One, the On-Center Network & Service Management Suite, and the OMEA and Preside platforms.
Packet networking solutions, another 11% of sales, supplies the 3000 and 5000 families of service delivery switches, service aggregation switches, and legacy metro Ethernet and broadband products. Products in this segment support wireless backhaul infrastructures and business data services.
Optical transport products, 5% of revenue, is supported by demand for 4200 Advanced Services Platform and the Corestream Agility Optical Transport System. This segment includes products that create automated optical infrastructures that support enterprise and consumer-oriented network services.
Ciena has operations in North America, the Caribbean and Latin America, Europe, the Middle East, Africa, and the Asia/Pacific. About 58% of its sales come from the US.
It doesn't build its own products but uses contract manufacturers with plants located in Canada, Mexico, Thailand, and the US.
Sales and Marketing
The company counts more than 1,000 customers such as AT&T and Comcast in the US and Orange (France), Telefonica (Spain), and Vodafone (UK) overseas. It uses a direct sales force as well as resellers.
Ciena has enjoyed substantial revenue growth over the last four years. Overall sales increased about 10% in 2014 to a record of almost $2.3 billion. The posted posted revenue growth in all its units but for the optical transport segment, which dropped 45%. Converged Packet Optical, the largest segment, had the highest growth, 22%, on demand from service and web-scale providers for high-capacity optical transport for coherent 40G and 100G network infrastructures. While the company has been unprofitable for the past six, it trimmed its loss for the second year in a row. The net loss Ciena reported for 2014 was $40.6 million compared to a loss of $85 million in 2013. The loss reported in 2012 was $144 million.
Holding some 1,400 US patents and more than 400 foreign patents, Ciena is focusing product development in all its segments on new demand for converged optical Ethernet networking products and services that support mobile devices, video applications, and cloud and virtual computing.
The company looks to expand in Brazil, India, Japan, the Middle East, and Russia, and in customer markets that include enterprises, wireless operators, cable operators, submarine network operators, Internet content providers, cloud infrastructure providers, research and education organizations, and governments.
Mergers and Acquisitions
In 2015, Ciena agreed to acquire Cyan Inc., a provider of software and platforms for software-defined networks, for about $400 million. The addition of Cyan helps Ciena offer more comprehensive virtualized networks and services on-demand services.