Ciena builds on acquisition of Nortel technology to build industry-leading products

Ottawa telecom research powerhouse

Nortel Networks Corp may have vanished from the Canadian S&T landscape, but the massive campus where it once thrived in Ottawa's west end is anything but idle. Nortel's assets and state-of-the-art facilities were acquired by several high tech firms, including Ciena Corp, an innovative developer and manufacturer of advanced telecommunications networking equipment.

More than 1,000 Ciena research and technical personnel work in the facility that once housed Nortel's Metro Ethernet Networks (MEN) division, which Ciena acquired in 2010 for $772 million. Overnight, Ottawa became the company's largest R&D facility, doubling the Hanover MD-based company's size to more than 4,000 employees and pushing its client base to more than 1,000.

By building on Nortel's expertise, Ciena has enhanced its reputation of one of the most advanced telecommunications firms globally, conducting applied and pure research — the latter in collaboration with several Canadian universities.

High R&D intensity

While the firm does not breakdown its Canadian R&D spend, the company reported R&D outlays of $364.2 million, representing 19.9% of 2012 revenue of US$1.83 billion — higher than most large-sized competitors. At least $180 million of its R&D outlays are spent in Canada, where the firm employs approximately 1,800, including a smaller facility in Montreal. That's in addition to the $2.3 billion spent by the communications and telecom equipment sector as a whole in 2012 (R$, November 11/13).

"We need to stay on the leading edge with world class products so we're very focused on where we stand," says Rodney Wilson, Ciena's senior director of external research, responsible for interaction and collaborative programs with universities and government research organizations worldwide. "We are optical specialists and our percentage of revenue on R&D is what we feel we need to do to maintain world class and world leading products and world leading market share … We are very successful at staying ahead of the curve in part because of the advanced research but also in part because of the level of R&D investment we are able to focus."

Ciena's commitment to the Ottawa region was solidified in 2011 when the firm received a $25-million grant from the Ontario government through its Open Ontario economic strategy (R$, January 31/11). In return, Ciena pledged to spend at least $900 million over five years on R&D at its Ottawa facilities (the former Nortel site and an older facility in nearby Kanata) and add 350 new employees to its workforce including 125 new graduates. Wilson says the company is exceeding its commitments on all counts.

Part of Ciena's strategy for staying at the leading edge involves extensive collaboration with universities. The firm doesn't disclose which Canadian universities it collaborates with, but a company tour last September included stops in Halifax, Waterloo and at McGill Univ, École Polytechnique, Carleton Univ and the Univ of Ottawa.

Ciena benefits, for instance, from its relationship with the Univ of Ottawa which recently completed a $70-million Advanced Research Complex featuring a revamped Centre for Advanced Photonics and state-of-the-art geoscience laboratories. U of O hopes the investment in talent and infrastructure will help brand it a global photonics research powerhouse. The company also has a strategic relationship with Algonquin College that includes donating equipment to the schools photonic engineering lab.

university collaboration a two-way street

Ciena has engaged in collaborative R&D on technologies such as digital signal processing and application-specific integrated circuits, and improvements have found their way into Ciena products. In return, university researchers and graduate students get real-world experience by developing their research in a corporate environment.

"It's a two-way street. Working with Ciena provides industry validation for some of the work these schools are doing and we get some insight on the edges of these technologies," says Wilson.

In addition to working with post-secondary institutions, Ciena also collaborates extensively with CANARIE — Canada's high-speed research and education (R&E) network and similar networks around the world. Wilson is a past CANARIE board member and lauds the organization's efforts to reach out to the corporate sector.

"They allow us to have a research test bed so we can provide some of our equipment and run our tests for very stressful or unique environments," says Wilson.

The combination of in-house research and university collaboration is helping to push Ciena's product offerings ahead of the pack, most recently with the introduction of Terabit-scale packet switching and 400Gb/sec and 800Gb/sec speeds on its optical core network infrastructure.

The firm is also anticipating networking infrastructure needs of the future, prompted by server virtualization and other developments that are dramatically changing the nature of network traffic.

"A lot of the focus is not just on transmission but optical packet integration. We see a flattening of network layers in the future so we're developing technologies to help accelerate that," says Wilson. "What's the plan when every car and every traffic signal is a node on the Internet? Certainly it's not going to be (existing network architecture) to try and traffic manage that... We think the integration of packet and optical is a strategy that's going to solve this, to accelerate and streamline high-performance networks in the future."

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