Dale’s Web Log

Cisco Systems Inc. is now looking at the prospects of several of its networking divisions introducing WiMax products, according to industry sources, reversing a sometimes combative stance on the emerging wireless technology from the company.

“The wireless, cable, and Linksys groups are all looking at WiMax,” a source tells Unstrung. “These have different motivations and different products.”

Cisco will face the eternal conundrum that it always faces when entering a new wireless market, the source adds: “The question will be, do these internal groups do the work… or who will they buy?”

Another source, however, says at least some of the development is internal and the company is already working on WiMax. This could result in additional WiMax capabilities for its municipal networking offerings.

In the past, WiMAX Forum member Cisco has pooh-poohed the technology’s chances of success as a wide-area wireless access technology. Most notably, when CTO Charlie Giancarlo said the business case for WiMax was “not compelling” in November 2004. The firm has softened its stance a little since then but still has a white paper on its site explaining why it won’t build WiMax base stations.

The company’s official stance on WiMax is still fairly muted. “Cisco always looks at different wireless technologies,” allows Ben Gibson, director of mobility solutions marketing at the firm, but he adds: “WiMax is certainly not nearly as far along in the market as wireless LAN.”

Cisco, however, would by no means be the only major networking company to change its position on WiMax as the market evolves. Just recently, Qualcomm Inc. bought into mobile WiMax, while Ericsson AB decided to get out of the market and concentrate on cellular 4G updates.

Certainly there is more support for WiMax from mobile operators and other service providers now than there was in 2004 or 2005 — when Cisco first got sniffy on WiMax. In the U.S. alone, Clearwire LLC and Sprint Nextel Corp. are working on multi-billion dollar WiMax rollouts through 2008 and beyond.

— Dan Jones, Site Editor, Unstrung

Cisco Systems Inc. said Thursday that it has agreed to acquire the online meeting company WebEx Communications Inc. for about $3.2 billion in cash.

Cisco, the leading maker of routers and switches that direct data over computer networks, said it will pay $57 per share of WebEx. That represents a 23 percent premium over WebEx’s closing price of $46.20 on Wednesday on the Nasdaq Stock Market.

Shares of WebEx soared $11.21, or more than 24 percent, to $57.41 in early trading on the Nasdaq Stock Market. Cisco shares lost 4 cents to $25.81 on the same exchange.

Cisco said the acquisition has been approved by its board and is expected to close in the fourth quarter of fiscal 2007. Cisco said it expects transaction to have an immaterial effect on its fiscal year 2008 earnings after one-time charges are subtracted.

The San Jose-based company has recently made a number of acquisitions branching out from its core business of supplying networking gear and into communications, social networking and other areas that help drive traffic over the network and increase demand for its core equipment.

Santa Clara-based WebEx makes applications that enable online group meetings and secure instant messaging.

“As collaboration in the workplace becomes increasingly important, companies are looking for rich communications tools to help them work more effectively and efficiently,” said Charles H. Giancarlo, Cisco’s chief development officer, said in a statement. “The combination of Cisco and WebEx will deliver compelling solutions accelerating this next wave of business communications.”

According to the Infonetics Optical Network Hardware report, with more and more service providers around the world pushing WDM and Ethernet instead of SONET/SDH in their access networks, the technology’s days are numbered. Starting in 2007, spending on SONET/SDH equipment will slowly begin to decrease every year, while WDM spending increases every year, at least through 2010, the report forecasts.

Highlights

• Worldwide optical revenue is forecast to reach $12.2 billion in 2010
• Alcatel-Lucent held 1st place in 2006 worldwide optical network hardware revenue market share, followed by Huawei then Nortel
• Siemens leads the worldwide long haul WDM ROADM switch revenue market share; Cisco leads in metro ROADM
• North America makes up 35% of the worldwide optical network hardware market, EMEA 33%, Asia Pacific 27%, and CALA 6%

It seems as if they finally came to their senses. Quad (4-channel) Small Form-factor Pluggable (QSFP) optical module specification was released today. It seems as if feedback from the public review resulted in increased speed capabilities from 5Gbps to 10Gbps. With four channels each running at 10Gbps, it provides a practical approach to achieving 40Gbps links. However, I for one am not overly impressed with speed claims that simply tout multiple lower level rates in parallel.

That aside, I do see a benefit to this specification - primarily for I/O density on boards. By increasing the density, costs should decrease in the long run. Here is an artists rendition of a QSFP transceiver.

The complete specification can be downloaded here:

http://www.qsfpmsa.org/downloads/QSFP_Specification_Revision_1_0.pdf

This is an overview presentation that has some nice pictures and stuff:

http://www.qsfpmsa.org/downloads/QSFP_MSA-December_2006_R3.pdf

From Light Reading.com

Press reports in northern California say 40 staff in Petaluma were being moved out of optical, many of them being offered other jobs within Cisco. One source says Cisco’s Richardson, Texas, facility is also slashing optical jobs and giving several employees new assignments.

And, like last year, there are rumors that Cisco is close to declaring the 15000 series products have reached “end of life.” But, as ever, analysts and competitors seriously doubt that’s going to happen.

In February, Cisco did tell Light Reading there had been “tremendous investment” in the 15454 during the past two months, and the company has continued upgrading the 15454’s software.

But analysts have wondered for some time whether Cisco is losing its appetite for optical transport.

That would be pretty intersting to say the least. After all the money they spent on the Cerent acquisition. I must say though, I haven’t seen any breakthrough technology investments in the product line. They are probably secretly re-inventing it with a new state of the art product that will knock the socks off the competition.