Ciena launches federal subsidiary

In a bid to capitalize on the growing demand for business in the federal government, network firm Ciena has launched Ciena Government Solutions, a subsidiary that will specialize in the public-sector market.

In another sign that Ciena is strengthening its government business, Rob Rice, most recently vice president of federal sales at 3Com, joined the company as a vice president and as managing director of the subsidiary.

As one of the technology providers for the Defense Department's Global Information Grid-Bandwidth Expansion (GIG-BE) effort, Ciena has emerged as an established provider for government needs, Rice said.

"We're very focused on government business," he said. "Coming off the GIG-BE experience, we understand where our technology fits in the large government networks. This is the right thing to do at the right time."

Rice said one of his early priorities will be strengthening the company's partnerships. "We don't have a thousand small resellers. We want to focus on the larger partners," he said. "It's a value proposition for the partners, too."

Ciena's move is becoming common for many companies, said Frank Dzubeck, president and chief executive officer of Communications Network Architects.

"Everybody and his brother [are] looking at the feds as a potential revenue source," Dzubeck said. "It gets more competitive, which is how it should be."

A few years ago, companies were driven to the government by a collapsing private-sector technology market. Companies formed with enthusiasm during the Internet boom discovered a dwindling customer base after the dot-com bust. Many turned to the government for help — often without success — in an effort to survive.

Now, the dynamic has shifted, Dzubeck said. Rather than being pushed to government by a weak commercial market, companies are being pulled in by the "super agency" — the Homeland Security Department — and DOD, both of which seem to offer nearly unlimited opportunities for firms, he said.

Other agencies on the civilian side of government are also upgrading their networks or plan to do so soon, he added.

None of them are small efforts, Dzubeck said. "None of these are narrow in scope, and they're fraught with wonderful residual business, because they're always multiyear."

Establishing the subsidiary shows the government that the company is serious, said Brian Ianniello, Ciena Government Solutions' government alliance director. "Government is a separate animal," he said. "This is a showing of commitment and focus."

Companies like Ciena generally find their best business model is to build on early successes, said Warren Suss, president of Suss Consulting. In Ciena's case, that means following through with GIG-BE. DOD is introducing the network to individual military bases now, he said.

"As the company that provides some of the switches and the backbone, they're a logical candidate for extending optical services throughout the bases," he said.

Ciena officials have formed a Government Advisory Board to provide expertise and guidance as the company develops its federal presence. The board has three members, but is likely to expand. The members are:

• Arthur Money, who has more than 30 years of management and engineering experience with the defense electronics industry and intelligence community, including five years as president of ESL, a subsidiary of TRW. He also served as assistant secretary of Defense for command, control, communications and intelligence from 1999 to 2001.
• Lt. Gen. Kenneth Minihan, a retired officer who served as the 14th director of the National Security Agency/Central Security Service.
• Larry Spilman, a former head of AT&T's federal division and most recently leader of his own consulting firm, the Dalton Group. Spilman has more than 30 years of government experience.

— Michael Hardy