ANALYSIS SHOWS SERVICE PROVIDERS CAN DRAMATICALLY REDUCE COSTS BY DEPLOYING CIENA'S LIGHTWORKS
CIENA to Conduct Educational Seminars to Carrier Community About Economic Value of Its LightWorks Solution
Linthicum, MD — 09/19/2001Ciena Corporation (NASDAQ: CIEN), a global provider of intelligent optical networking systems, today announced the completion of an analysis demonstrating the large savings that service providers can achieve by building out, expanding or migrating their networks to Ciena's LightWorks™ architecture, rather than using legacy equipment.
The Company plans to hold educational seminars around the world to demonstrate to service providers the benefits of its next-generation architecture.
"We have recognized that a fundamental change is taking place in our industry, and applaud Ciena for educating the telecom community about the ongoing shift from legacy to next-generation optical networks, also known as Intelligent Optical Networks," said Michael Howard, principal analyst and co-founder of international market research firm Infonetics.
According to the Economic Value Analysis (EVA) model, created by Ciena with a leading global consulting firm, Ciena's LightWorks solution provides, in a typical 15 node backbone network, over 60% in capital expenditure (CAPEX) savings versus a comparable legacy solution. These savings represent CoreDirector™'s ability to displace Digital Access and Cross-Connect System (DACS) and Add-Drop Multiplexer (ADM) functionalities.
The operating costs (OPEX) for the service provider averages approximately 50% of overall revenue, according to Ciena's research. The EVA model estimates that after six years, OPEX savings will be as much as 34%, as compared to a legacy solution. The savings are derived from installing and maintaining a network of 15 CoreDirectors versus a legacy solution with more than 400 DACSs and ADMs. Also included in the OPEX savings are the associated space and power reductions.
Beyond the CAPEX and OPEX savings, Ciena's EVA model also shows potential for providing revenue stream enhancements that yield approximately 10% additional revenue, according to the scenario utilized for the study. The total includes new service classes that legacy gear cannot support, as well as additional revenue due to fast provisioning times for service turn-up, which creates a "Time to Revenue" bonus.
Ciena plans to hold educational seminars during the remainder of 2001 regarding the study's findings and the resultant network architecture across Europe, the Asia-Pacific region and Latin America.
"Ciena's role is to help service providers maximize the efficiency of their networks while providing them with opportunities to increase their return on investment," said Gary Smith, president and CEO of Ciena. "Through this global seminar series, we'll share study findings and discuss the benefits of Ciena's LightWorks with carriers worldwide."
Ciena Corporation's market-leading optical networking systems form the core for the new era of networks and services worldwide. Ciena's LightWorks™ architecture enables next-generation optical services and changes the fundamental economics of service-provider networks by simplifying the network and reducing the cost to operate it. Additional information about Ciena can be found at www.ciena.com.
This press release contains certain forward-looking statements based on current expectations, forecasts and assumptions of Ciena (the Company) that involve risks and uncertainties. Forward looking statements include statements regarding the Company's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Forward-looking statements in this release include the Company's belief that the LightWorks architecture can save service providers millions of dollars, the ability of LightWorks to allow service providers to be able to leverage the capital and operational savings associated with next-generation networking, the ability of LightWorks to help service providers grow their business, increase revenue and profit, and improve network performance for next-generation optical services, and the cost savings, deployment timing and network management benefits of the Company's products. The forward-looking statements are based on information available to the Company as of the date hereof, and actual results could differ materially from those stated or implied, due to risks and uncertainties associated with the Company's business. These risk factors include those disclosed in the Company's Report on Form 10-Q filed with the Securities and Exchange Commission on August 16, 2001. The Company assumes no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.
Nicole Anderson
Ciena Corporation
(877) 857 -7377
pr@ciena.com
Marie Downing
Ciena Corporation
(888) 243-6223
ir@ciena.com
