Ciena Corporation (NASDAQ:CIEN)—sees a silver lining in the cloud
On Thursday, Ciena Corporation (NASDAQ:CIEN) shares climbed up 17.41% and closed at $19.15 per share. The company makes switches that are used to route broadband access products and internet traffic. It said that a significant shift in network architecture is boosting its expectations of outrunning the rest of the market. Gary Smith the Chief Executive Officer said that and the demand for mobile data volumes is an ever-growing one and does not show any signs of abating. Machine-to-machine connections are projected to touch 24 billion over the next few years. These applications allow connectivity between wireless as well as wired systems and other devices.
Ciena and competitors such as Infinera Corp and Cisco Systems Inc will in most probability benefit. This is because North American telecom companies such as AT&T and Verizon are in 4G expansion mode. Ciena Corporation (NASDAQ:CIEN)’s margins should rise as several companies who use its carrier ethernet and converged packet-optical solutions, progress from trials to actual commercial production.
What is an optical switch?
A device that transfers light-signals in communications networks, between various channels is called an optical switch. In the 20th century, optical-fiber networks were developed to transfer higher-quantities of data than what was possible with copper wire systems that were previously used. An increase in use of the Internet and an ever-expanding mobile phone and television offering market necessitated that communications networks manage larger quantities of data.
When a light signal is carried by a fiber-optic network, from one phone or PC to another, the signal might have to be moved between various fiber paths. In order to achieve this, a switch needs to be available to ensure a minimum loss of data or voice quality. Cloud computing too is a field that still has to reach its peak demand as a larger number of consumers and corporations look up to the cloud for their storage and communication needs. Ciena Corporation (NASDAQ:CIEN) optical switches help various telecom carriers manage loads on their individual networks and it is has set its sight on the cloud on the horizon.