|Traded as||NYSE: CIEN|
|Headquarters||Hanover, Maryland, United States|
|Key people||Patrick Nettles
(President and CEO)
|Products||Networking systems and products|
|Revenue||$1.83 Billion USD (FY 2012)|
|Net income||-$144 Million USD (FY 2012)|
Ciena Corporation is a United States-based global supplier of telecommunications networking equipment, software and services that support the delivery and transport of voice, video and data services. Its products are used in telecommunications networks operated by telecommunications service providers, cable operators, governments and enterprises. The company was founded in 1992 and is headquartered in Hanover, Maryland.
Ciena sells products and services across four segments: Converged Packet Optical, Packet Networking, Optical Transport, and Software & Services. Ciena’s product portfolio consists of Packet-Optical Transport, Packet-Optical Switching and Carrier Ethernet Solutions products. Key current platforms include the 6500 Packet-Optical Platform, 5430 Reconfigurable Switching System, CoreDirector Multiservice Optical Switch, 3000 family of service delivery switches, and the 4200 Advanced Services Platform. It also offers the Ciena One integrated network and service management software suite, consulting and support services, deployment services, maintenance and support services, spares and logistics management.
Ciena was founded as Hydralite Incorporated in November 1992 by David Huber to find ways to increase the capacity of phone lines and cable TV wires so that existing equipment could support more telephone calls and TV shows. Huber, an electrical engineer recently terminated by General Instrument, began looking for funding among large technology firms and venture capitalists. Initially unsuccessful, he eventually found Kevin Kimberlin, Chairman of Spencer Trask, who provided initial equity capital during its formation. By early 1994, Spencer Trask, Sevin Rosen and other venture capital investors put up $3.3 million to formally launch the renamed Ciena. Total venture funding eventually totaled $40 million.
Sprint and IPO
In late 1994, during the public-to-private transition of the Internet, Ciena began working with Sprint – an earlier carrier of exploding internet traffic – to develop “high-capacity fiber optic transmission systems called Dense Wave Division Multiplexing (DWDM).”  The outcome of their effort was announced in June 1996 when Ciena said it had increased “Sprint's nationwide, all-digital fiber-optic network by a stunning 1,600 percent.”  Sprint soon became one of the world’s largest carriers of Internet traffic. With success from Sprint and others, Ciena’s “first-year sales were the highest ever recorded by a start-up.” 
In February 1997 Ciena “pulled off the biggest initial public offering of a startup company ever, with a first-day valuation of $3.4 billion.”  The Wall Street Journal called it a “Jackpot for the Record Books.”  Later, Goldman Sachs in a research note wrote that it’s records were many: “1) steepest revenue ramp for any company in history, 2) most profitable company ever in its first year of product shipments, 3) largest market capitalization of any new IPO, and 4) largest follow-on offering for a technology company.” By 2001, Ciena had achieved annual revenues of $1.6 billion and a marketing capitalization of nearly $30 billion – based on the success of what Ciena describes as a “single product line”, its dense wave division multiplex system. Ciena was at the beginning of a wave of telecom equipment makers doing public offerings, and Fortune Magazine later reported that a total of 88 companies in the segment went public in the three years following Ciena’s debut, raising more than $10 billion.
Despite setbacks along the way, Ciena continue to grow over the next few years, by both introducing new products and by acquiring companies such as Lightera (optical switches) and Omnia (local access equipment). With a broader product line, Ciena’s customer base had grown from a small handful to 27 companies as network operators continued building their systems.
In 2000, Ciena announced the MultiWave Metro optical transport solution, which allowed metropolitan area networks to deliver particular frequencies to individual customer premises. By June 2000, Ciena’s stock had soared to $120 per share, giving it a market capitalization approaching $20 billion. Sales of the company's new line of products prompted the investor optimism, though some analysts were beginning to wonder whether the U.S. fiber optic network had been overbuilt. The customer list continued to grow as it approached 50 names.
Market Downturn and Diversification
During 2001, the telecommunications market went thru a severe downturn, and the segment that included Ciena’s optical networking equipment fell by nearly 2/3 to $9.1 billion. To better address the firm’s challenges, Gary Smith, previously president and head of sales, was named CEO in May 2001, and Patrick Nettles, CEO since 1994, became Executive Chairman.
By 2002, Ciena’s revenues had declined 80% to $361 million. [ Over the next few years, Ciena re-grouped by expanding its product portfolio to include a broader range of advanced networking solutions, including optical switching, new generation hybrid gear and Ethernet technologies.
Ciena accomplished its diversification effort with internal development as well as a series of acquisitions and strategic partnerships. By 2004 Ciena had purchased a total of 11 firms (half prior to the downturn) with an aggregate value of over $3.3 billion. With a broader range of offerings, Ciena was able to offer both its existing customers a wider range of solutions as well as compete with newer customers in additional segments and regions.
Ciena's Acquisition History
|Company Acquired / Description||Closed Date||Approximate Value $ Million|
|Nortel Metro Ethernet Networks||Mar. 19, 2010||$ 774|
|World Wide Packets||Mar. 3, 2008||296|
|Photonics Internet||May 3, 2004||100|
|Catena Networks||May 3, 2004||314|
|Akara||Sept. 3, 2003||46|
|WaveSmith Networks||June 18, 2002||398|
|Cyras||Mar. 29, 2001||1,100|
|Omnia Communications||July 1, 1999||474|
|Lightera Networks||Mar. 31, 1999||464|
|Terabit||Apr. 22, 1998||12|
|Alta Telecom||Feb. 19, 1998||52|
The Network Specialist
In late 2004 Ciena refreshed its branding with the tag-line “the network specialist”  to reflect additional capabilities in optical transport and switching. Ciena’s diversification strategy and numerous acquisitions were accompanied by its ability to integrate new products and technology advances. This success was in contrast to many of its rivals, such as Nortel, Alcatel Lucent and others that struggled to keep up.
Ciena bought carrier Ethernet solutions provider, World Wide Packets in early 2008 for $296 million. In 2010, Ciena bought from Nortel Networks (which had filed for bankruptcy) its optical networking and carrier ethernet business for $774 million. This acquisition doubled Ciena’s size to more than 4000 employees and increased its customer base to over 1000.
- Morgenson, Gretchen. "Ciena Corporation". Companies (New York Times). Archived from the original on 24 November 2009. Retrieved 24 November 2009.
- "Ciena Corp Moving HQ to Station Ridge in Hanover". citybizlist Baltimore. citybizlist.
- "Ciena Reports Fiscal First Quarter 2013 Financial Results". Ciena Corp.
- "Ciena 2012 Annual Report". Ciena Corp.
- Ciena Corp. SEC S-1 Filing, 12/12/1996 p F-7. URL: http://www.sec.gov/Archives/edgar/data/936395/0000950133-96-002787.txt Retrieved 6/28/2013.
- Anders, G. (June 5, 1998) Success: For Ciena’s Investors, a Jackpot for the Record Books, Wall Street Journal, Retrieved Oct 10, 2013 on ProQuest.
- Henry, Mary (July 30, 1997) Ciena Corporation – Breaking the Bandwidth Barrier, Goldman Sachs U.S. Research Report,
- History of Ciena, Ciena Corp., Retrieved Nov. 1, 2013 from Ciena website
- Moritz, Scott (March 7, 2008) Ciena's Secret Weapon: Diversification, Forbes Magazine, Retrieved, Nov. 13, 2013
- Ciena Website. Retrieved Nov. 1, 2013
- Smith, Gary (June 9, 2012) Tenacity and Teamwork, The New York Times, Retrieved, Nov. 13, 2013