Spinning into a bright future
Though Coriant officially came into being just a year ago, after its spin-out from Nokia Siemens Networks (NSN), plans were already in place to separate the optical network business several years back.
Chief technical officer Uwe Fischer tells Fibre Systems: ‘About two years back NSN decided to focus on mobile and mobile broadband – and, despite the fact that we saw a tremendously good and positive business opportunity around the optical business, the company was not willing to make the necessary investments to really develop this field.
‘This is why we decided we should carve out the business and to put it onto its own strong foundations that would provide us with the ability not only to make all the investments needed for a successful future, but also what was always a bit of an issue in such a big organisation – to move away from what we perceived as a lack of focus.
‘In the optical network space you have to deal with complex and challenging physical behaviour. It is really a complete solution including software-defined networks and more – so you really need to master the subject in order to position and sell it successfully.’
Because the existing NSN division was essentially operating as a self-contained business, its management team were able to make all necessary preparations so the final carve-out was effectively no more than a formal step. Pre-alignment arrangements were put in place with major customers – all of which have remained loyal to Coriant – and the business continued to grow, with seven consecutive quarters of profitability from Coriant and its predecessor.
Fischer says the management team has serious ambitions to grow the business: ‘Our cost structure is well under control – we are one of the only profitable companies in our sector and that is a very powerful argument to be able to make to our customers.
‘We took all our patents along with us, and own them fully. This is very important because we don’t have to rely on a royalty-based licensing model; we own our IPR and we are going to expand this. We have more than 400 customers worldwide and they are well distributed, globally – so when you look at the global distribution of the markets they are very well aligned and this helps to mitigate our risks.’
The company is not dependent on any one geographical region – and serves a plethora of different enterprises from large corporations and data centres to telecoms companies. In short, Coriant has a very balanced customer base.
It is no surprise that Fischer has well-mapped plans for the future of Coriant. He expects the company to extend from long-haul service provision into flat architecture – regional and metropolitan short-haul networks – and from wavelength-division multiplexing (WDM) to full packet optical transference platforms, while developing and adding software intelligence: ‘We are developing a software-defined network (SDN) framework. Our only weakness is that we don’t have a full portfolio coverage and we need to address this. What plays into our hands are current market trends towards more comprehensive solutions and flat architecture, because this will enable us to start from a strong position.’
Fischer believes transport networks will always require more capacity and higher speeds, and this is reflected in Coriant’s plans: ‘We have a strong 100Gb offering and we do a lot of work beyond that figure. Last year we showcased a 400Gb experiment, for example. We are also looking closely at multi-mode fibres, which is the direction the industry is going. We are showcasing that we are really at the forefront of innovation, and increasing the capacity of our networks.
SDN and data centre interconnect will become more important driving forces – if not the driving force – for transport networks, says Fischer, so to have very intelligent software solutions that can fully leverage the potential of networks and can tie them into a full SDN-compliant framework its essential. ‘We have a product in that space already, which we call the intelligent optical control. It was launched in June and the next step with a large potential customer is the so-called proof of concept. This will show that this product will work in a fully SDN-compliant environment, with third-party IP routers running over our transport gear.
‘In the future there will be increasingly strong links between what is happening in the infrastructure layer and what is happening on the intelligence and SDN side; they will very much be linked and are very much the two focus topics we are driving forward as a company.’