Ciena’s Clash with Cannibalization at Webscale Operators

$500.00

Published June 4, 2020. 30 pages

Ciena is at an important inflection point involving its future strategy. Its biggest, near-term struggle right now seems to be in adequately responding to the demands of the hyperscale data center operators for a 400-gig ZR device, the total world market we project to grow to $175 million in 2023.

Description

Published June 4, 2020. 30 pages

Ciena is at an important inflection point involving its future strategy. Its biggest, near-term struggle right now seems to be in adequately responding to the demands of the hyperscale data center operators for a 400-gig ZR device, the total world market we project to grow to $175 million in 2023. Is there a possibility that the supplier remains primarily focused on its latest generation of equipment mainly involving 800G, 600G, etc.? Conversely, does it indeed make a dramatic shift with a full commitment towards pluggable coherent optics? Most ominously, future types of modules along with white boxes taking advantage of them could lead to substantial cannibalization of not only Ciena’s offerings, but every full optical system player in this space.

Otherwise, despite some notable, very costly missteps earlier in its existence, Ciena at least for now, is at its strongest competitive position ever as an optical system house. Bolstered by its dominant position in the United States, especially with the hyperscalers and large incumbent ISPs, it has become the world leader outside of China. While this transport space is quite harsh, as maintaining adequate hardware differentiation can be difficult, the vendor should be able to exist indefinitely. We also provide a set of circumstances in this report, which would result in Ciena remaining in its dominant place, primarily as a full-system supplier moving forward.

The report addresses the following issues:

  • 400ZR market size and projections by application out to 2024
  • expected 400ZR price declines by app
  • Ciena’s corporate strategy options in optics
  • competitive analysis of major competitors
  • long-term outlook of large cloud providers and other users
  • special focus on Microsoft’s network plans, as original ZR driver
  • cloud operators’ demands for successive generations of gear
  • enhanced risk of significant, lengthy network failures
  • power requirements at higher data rates
  • Ciena’s possible M&A activity
  • bandwidth demand challenges with Covid-19 virus
  • decision-making structure at Ciena and potential changes
  • QSFP-DD vs OSFP
  • 400ZR+ and its complexity
  • impact of white boxes
  • future potential for 100ZR
  • prospects for 800-gig ZR
  • Google’s campus coherent concept

Table of Contents

1.0 EXECUTIVE SUMMARY

1.1 COMPETITIVE ASSESSMENT OF OTHER SUPPLIERS

  1.2 CIENAS COMPETITIVE POSITION IN 400ZR

  1.3 WEB 2.0S AND OTHER OPERATORS/USERS

  1.4 ADDITIONAL NOTEWORTHY FINDINGS AND OBSERVATIONS

2.0 WORLD MARKET PROJECTIONS FOR 400ZR MODULES

    Exhibit A: 400ZR World Shipment Projections by Application in Units

    Exhibit B: Projected Prices for 400ZR Pluggables by Application

    Exhibit C: 400ZR World Market Projections by Application in Revenue

  2.1 METHODOLOGY IN DETERMINING 400ZR FORECASTS 

    Exhibit D: Stats Behind fibeReality’s Rationale for 400G ZR Predictions

  2.2 ZR PRICING TRENDS 

3.0 DEBATE ON CIENA’S MOVE TO 400ZR VS MAINTAINING VISION

  3.1 CASE FOR CIENA TRANSITIONING TO RADICAL  DISAGGREGATION

    Exhibit E: Ciena’s Probability Puzzle: Pluggables vs Systems

  3.2 RATIONALE FOR CIENA MOVING IN ZR/ZR+ DIRECTION

  3.3 THE COMPROMISE

  3.4 DOMINO INEVITABILITY & SUSTAINABLE BELIEVABILITY

  3.5 CASE FOR CIENA STANDING FIRM 

    Exhibit F: Suggested M&A Possibilities for Ciena

  3.6 CIENAS MANAGEMENT INCLINATION

4.0 NETWORK PLANS FOR 400G ZR BY LARGE USERS

  4.1 FOCUS ON MICROSOFT

    Exhibit G: Microsoft and ZR

    Exhibit H: Microsoft’s Power Situation

  4.2 GOOGLE

  4.3 ARISTA NETWORKS

  4.4 FACEBOOK

  4.5 AMAZON

  4.6 ALIBABA 

  4.7 OTHERS

5.0 ANALYSIS OF CIENA’S MAJOR COMPETITORS

  5.1 ACCTON TECHNOLOGY 

  5.2 ADVA

  5.3 CISCO SYSTEMS/ACACIA COMMUNICATIONS

  5.4 FUJITSU

  5.5 HUAWEI TECHNOLOGIES

  5.6 INFINERA 

  5.7 INNOLIGHT 

  5.8 INPHI

  5.9 JUNIPER NETWORKS

  5.10 LUMENTUM HOLDINGS 

  5.11 MOLEX 

  5.12 NEL (NTT ELECTRONICS)

  5.13 NEOPHOTONICS

  5.14 NOKIA NETWORKS

  5.15 NVIDIA

  5.16 II-VI

  5.17 ZTE

  5.18 OTHERS