NXTcomm 2007 Optical Infrastructure Round-up:
Trade Show Floor Messaging

| July 5, 2007 | Optical Infrastructure
| Advisory Report
| Analyst: Jason Marcheck

Event Summary

NXTcomm, perhaps more so than any other North American trade show (save maybe CTIA for the wireless market), is an important opportunity for every telecom infrastructure vendor. It’s an opportunity for vendors to meet with customers (old, new, and potential), demonstrate their product capabilities, and paint a picture of their vision for the future of the industry.

Against this backdrop, large vendors spend lavishly on booths that resemble small buildings; buildings complete with conference rooms, coffee bars, “living rooms,” and product demo sites. However, while the physical components of a booth can be somewhat common, the marketing message a vendor’s booth sends can provide the tipping point between a successful and unsuccessful show. Smart messaging and forward thinking can position a vendor as a thought leader. The wrong messaging, on the other hand, can position them as out of touch, or “behind the curve,” when it comes to new technologies.

So, as we try to work off the deep dish pizzas, steak dinners, and gratis cocktails consumed in Chicago, a review of the booth marketing done by some of the leading optical vendors should provide insight into who is sending the right message, and who might want to re-think their strategies as the “Big Show” heads out to the Las Vegas Strip next year.

Current Perspective

As anyone who has ever attended the TIA/USTA’s annual event knows, the NXTcomm show floor can be somewhat overwhelming at times. Bright lights, the sounds of intermingling vendor presentations, live bands, motorcycles, and even a HumVee all came together in Chicago to assault the senses. In a similar way, the sheer volume of exhibiting companies can make it impossible to evaluate the messaging of every company in a particular market segment. For this reason, our review will focus on six of the market’s leading – and not-coincidentally, largest – vendors that chose to make optical a key focus of their booth displays.

Alcatel-Lucent

• Pros: Alcatel-Lucent’s main demo area featured back to back walls of PowerPoint-based equipment/solution presentations which fed into a “living room” area where multi-media end user services were featured. Engineering its demo station this way created a clean approach to walking attendees through the steps it takes to create the “three screens” experience, and then showed how it all comes together in the form of customer facing services. In terms of optical-specific marketing, the 1850 TSS-320 and 1675 LambdaUnite were prominently displayed, making it easy for customers to find, examine, and ask questions.

• Cons: Alcatel-Lucent ran guided booth tours on half-hour cycles, which seemed somewhat unnecessary given the fact that the tour consisted of a couple hundred square feet of floor space. Although designed to make sure booth attendees were exposed to all elements of the vendor’s messaging efforts, the tours tended to interrupt the flow of drop in traffic, and make it difficult for those not in a tour group to ask questions at the demo stations.

• Takeaway on Optical: Prominently featured optical equipment made it clear that Alcatel-Lucent considered optical a key priority of the show. However, relatively thin messaging in support of its newly announced optical enhancements left the equipment demos on a bit of an island, especially for booth attendees that are not familiar with the role that optical infrastructure plays in delivering blended services.

Ciena

• Pros: Ciena’s booth contained some of the most consistent messaging among the “big booth” attendees. From the entrance area which proclaimed Ciena’s theme (“A New Perspective on Ethernet”), to the wall posters and demo stations, nearly everything in the Ciena booth led the attendee toward the same conclusion: that Ciena was at NXTcomm to tout its Ethernet capabilities. In terms of physical design, a “cocktail lounge” area created a comfortable atmosphere where booth attendees could easily engage company representatives in conversation about Ciena’s activities at the show.

• Cons: For the second year in a row, the Ciena booth featured no equipment demos. Last year, the vendor tried using virtual technology to show off its gear. This year, the booth featured no equipment demonstrations at all – with only a few PowerPoint stations that highlighted new product enhancements to the FlexSelect portfolio. Perhaps more importantly, however, Ciena’s strong Ethernet message seemed a bit disconnected from its new product introductions (i.e., a 40G transport and a larger CN 4200 form factor). Going further, Ciena’s booth was set up in a walled garden fashion which was intended to funnel attendees through a main entrance. While this helped to ensure that those who passed through the “gate” would get an eyeful of Ciena’s marketing message, is was imposing to the casual passer by that might not yet be a Ciena customer. As such, Ciena’s booth seemed to be set up as a place for existing customers to mingle, but not so much a place for would-be customers to educate themselves on the various aspects of Ciena’s product portfolio.

• Takeaway on Optical: Anyone who knows Ciena, knows that the company’s bread and butter is optical. By focusing on Ethernet, the vendor helped to get the message out that Ciena is about more than just optical transport. Focusing on Ethernet was a smart way for Ciena to let the carriers in attendance know that as they think about migrating their optical networks from TDM to packet, Ciena should be a top of mind player.

Fujitsu Network Communications

• Pros: FNC’s booth featured a two-pronged focus on FLASHWAVE 9500 Packet ONP – a PowerPoint pod that walked attendees through the new product, key features, and its value proposition as well as an equipment pod where the physical product was housed. For those with a scheduled appointment, an FNC representative walked attendees through the slide show, which provided an in-depth briefing on what the FW 9500 will bring to the table. Then, the FW 9500’s product manager was on hand to answer any follow-up questions during the equipment inspection phase of the tour. Beyond the FW 9500, FNC’s booth featured distinct pods, which allowed interested parties to focus on one topic at a time.

• Cons: FNC’s IT + Networking message was not well supported through product demo activities. By and large, the demo pods focused on networking equipment – primarily optical and WiMAX – thereby creating an odd fit for the IT aspect of FNC’s marketing focus. To be sure, FNC is a well known IT company; however, at NXTcomm, that aspect of the business seemed lightly supported at best. In addition, while FNC’s process of walking attendees through the two-phased FW 9500 demo was undeniably effective for those lucky enough to have an appointment, it did leave drop-in visitors standing around with little opportunity to ask questions about the new product.

• Takeaway on Optical: FNC came to NXTcomm to talk about the FLASHWAVE 9500 Packet ONP, and its booth set-up made that fact clear. For attendees that stopped by the FNC booth looking for information regarding the vendor’s new optical initiatives, FNC’s NXTcomm set-up provided clear insights into how the vendor has improved its product portfolio in order to address market opportunities that it deems important.

Huawei

• Pros: Huawei had a presence at NXTcomm – thereby avoiding the mistake of not showing up at North America’s biggest telecom equipment trade show. As recently as a few weeks before NXTcomm started, it was uncertain whether or not the vendor would have a booth on the show floor. By actually showing up, Huawei confirmed that it is committed to maintaining a marketing presence in North America, which is obviously critical if the company hopes to grow its market share in the region.

• Cons: If Huawei’s presence at NXTcomm was a last minute decision, it showed. While the booth did contain a mix of PowerPoint demos and physical equipment that prospective customers could examine in person, there was very little marketing message in place to set a tone for Huawei’s presence in Chicago. Beyond cohesion in the booth, Huawei did not release any press releases in conjunction with NXTcomm. Brand building in North America is a long-term commitment, and failing to leverage high profile events like NXTcomm is clearly a missed opportunity as the Chinese vendor seeks to raise its profile in the region. Finally, Huawei’s exhibition was weakened by the fact that many of the company’s representatives were very limited in their abilities to hold a conversation in English. Huawei has representatives that can communicate effectively in English (I know, I’ve spoken to them). The fact that they weren’t sent to Chicago seemed to confirm that NXTcomm was somewhat of an afterthought to the Chinese vendor.

• Takeaway on Optical: As the number two optical vendor in the world, Huawei made sure that the focus of its booth was on its bread and butter – the BWS 1600 long-haul platform. However, beyond showing up with one of its most successful products, Huawei didn’t do much to demonstrate a clear value proposition that would resonate with North American operators.

Nortel

• Pros: Nortel is trying to establish itself as a leader in enabling Ethernet over Optical and the vast majority of its messaging steered booth attendees in that direction. In addition to highlighting its role in forming a PBT ecosystem, Nortel featured both PowerPoint and equipment demos that showed off the new capabilities that were incorporated into the OME 6500 platform. The booth was set up to draw attention to the OME 6500 set up, and the vendor did a good job of making sure product managers and design engineers were on hand – and accessible – to field questions about the product’s newly announced capabilities.

• Cons: Although the OME 6500 demo was comprehensive, and well explained, an unintended consequence of the exercise might have been to give the impression that the newly announced capabilities added a good deal of operation complexity into Nortel’s Carrier Ethernet offer. The demo, which showed the OME 6500 working in conjunction with the ANDA EtherReachB 2000 and a third-party router looked like a complex arrangement of cables, blinking lights and disparate boxes. Thus, while Nortel’s solution is probably somewhat representative of many similar competing solutions, the visual that the demo provided within the small confines of a trade show booth might have given the impression of a physically complex solution when it comes to deployment.

• Takeaway on Optical: There is little debate that its installed base has kept Nortel among the heavyweights in the optical equipment market. However, following an extended period when product enhancements have been relatively few and far between, Nortel’s NXTcomm activities made it clear that the vendor intends to compete in the Carrier Ethernet race, and is upgrading its optical capabilities to increase its odds of success.

Tellabs

• Pros: Chicago is Tellabs’ hometown, and the vendor’s booth – placed at the mouth of the trade show floor entrance – helped to feed the notion that the show was being held on its home turf. Beyond booth placement, the vendor’s focus on its new 7100 Nano OTS offer was pervasive. Posters and a PowerPoint demo pod provided a good deal of product information and marketing support for its new offer. Going further, a private demo area where the product was showcased – and explained in great depth by the product’s design engineer – gave attendees with an appointment a comprehensive indoctrination to the value proposition that Tellabs is putting forth for its new ROADM platform. Separately, distinct island demo pods allowed attendees that didn’t come to see the newest addition to the 7100 family to explore Tellabs’ other product offerings without being inundated with Nano talk.

• Cons: Although obviously intentional, offering only private screenings of the 7100 Nano likely left some attendees lacking an invite (i.e., potential customers) without a full appreciation for what the new Tellabs offer can bring to the table. At a show when smaller form factor ROADM offerings were announced from several vendors, some of the physical design strengths that the 7100 has to offer would have likely made a good impression on potential customers that are just now in the beginning stages of ROADM platform evaluation.

• Takeaway on Optical: ROADM and GPON have become two of the key focal points of Tellabs' marketing strategy over the past 18 months. Tellabs' presence at NXTcomm made it even clearer that both initiatives are going to continue to be lynchpins in the company's strategy going forward.

| Client Access |

Top