So when SuperComm, the annual networking-industry megashow, kicks off Tuesday in Atlanta, expect a lot of noise from the doddering telecom-equipment giants. Both will unveil products aimed at reviving their sagging growth plans, though neither company has sold any of this gear yet and both are arriving a bit late to thriving markets.
Up to its
old tricks, Lucent is reannouncing its Nexabit core router -- essentially a mail sorter that sends communications packets to their addressed destinations on long stretches on the Internet. This time around, though, the router is faster and capable of connecting to fiber-optic networks running at 10 billion bits per second, an improvement from the 2.5-billion-bit speeds of last year's model. Lucent acquired Nexabit two years ago, but the product's development slowed to a crawl when a number of Nexabit engineers jumped across the street in Marlborough, Mass., to
, another start-up.
"Lucent's had a relatively poor history of integrating products they pick up through acquisitions," says Andy McCormick, an analyst with
, a Boston-based market research shop.
Lucent's router is the fourth entrant in a market shared by leader
and fast-growing newcomer
, with tiny
bringing up the rear. Lucent's box has yet to win a customer, but the company says the router is in trials and is available now. Hopes abound for the long-delayed box: A former Nexabit employee says there's word that Lucent may soon have a big router contract to announce.
Juniper has been consistently swiping business from router king Cisco, closing the market-share gap to 59%-38%, according to the
. After strong growth in recent years, the core-router market shrank in the first quarter, as sales dropped 10% from fourth-quarter levels to $753 million.
With Lucent, however, investors have learned the value of waiting to see the goods.
The X Factor
Meanwhile, Nortel is belatedly pulling back the curtain on the all-optical switch that it
acquired last year with the purchase of
. If Lucent's router was meant to be a Juniper killer, Nortel's optical switch takes aim at
. But the target may be out of reach.
Indeed, Nortel was late to the switching game and has watched Ciena win a dozen customers with its CoreDirector switch. This brainy device helps manage networks and speed communications traffic along various pathways. Nortel's Xros switch was originally going to be available last year, but the company says it is testing the switch now and expects to start selling it this year.
"The Xros switch is a little behind, but the fact that they've been able to continue working on it is significant," says Aberdeen's McCormick. "These things aren't easy to build, but this should be a big part of their longer-term strategy."
But industrywide spending remains under pressure, which means that demand isn't likely to overwhelm Nortel regardless of when it rolls out the Xros box, McCormick says. "In conversations with service providers, though, I'm not hearing there is much demand for an all-optical switch at this point," he says.
Nortel's main competitors in the all-optical switching market are
and Lucent. Corvis has the distinction of being the only supplier with an all-optical switch currently in use, thanks to its investor and customer
Unlike the Ciena switch, which must convert lightwaves to electronic signals and back to lightwaves, the all-optical switches manipulate the lightwaves, in Xros' case on tiny mirrors that swivel on microscopic hinges. In an industry where speed is king, eliminating the light-to-electronic-to-light conversion process helps avoid slowdowns in communications traffic.
It's believed that one day all network traffic will travel on optical fiber. So it follows that the companies with the right gear to manage and connect the fiber today will be well-positioned to supply the remaining buildout, when the lavish spending returns. That's why you see a lot of companies positioning themselves now -- if not with deliverable goods, at least with a message that they are still alive.
The upshot: In a spending slowdown, tech-product conferences just don't captivate Wall Street like they used to. But with both Lucent and Nortel executives expected to address products and financial outlooks Tuesday morning, the venue has started to morph into an investment show.