Ciena Investors Cheer Alliance With Ericsson

Shares of Ciena Corp. (NYSE: CIEN) surged Friday morning following an announcement that the network specialist had reached a strategic global agreement with Ericsson (NASDAQ: ERIC). The deal includes packet-optical distribution, converged IP/optical joint development and distribution, as well as an SDN collaboration framework.

The agreement is effective immediately, and product integration efforts are under way. If the partnership is successful, the two companies should be able to better compete with Cisco Systems Inc. (NASDAQ: CSCO), which has a more comprehensive product line-up.

Ciena will tap into Ericsson’s wide range of strategic relationships with global service providers, its strong position in wireless infrastructure and its worldwide professional services. Ericsson gets to offer Ciena’s Converged Packet Optical portfolio to customers as they migrate to new converged network architectures. Ciena’s WaveLogic coherent optical technology will be integrated into Ericsson’s IP portfolio as well.

Ciena President and CEO Gary Smith said:

[T]he industry is moving toward an ecosystem of more specialized players as the transformation accelerates toward open, programmable, multi-vendor networks that scale and adapt to network-level applications and services. Together, Ciena and Ericsson will bring best-in-class solutions to customers around the globe to better address the evolving requirements for software-driven, converged networks.

Shares of Ciena were up more than 8% to $25.24 in morning trading, in a 52-week range of $14.14 to $27.94. More than the average daily volume had already changed hands.

Ericsson shares dropped fractionally after the opening bell but recovered to $12.60, in a 52-week range of $10.67 to $14.22.

Cisco Systems was up about 1.6% in late morning trading, to $22.63. The 52-week range is $19.98 to $26.49.

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