Redback ups optical ante

Redback Networks expanded its optical networking strategy on two fronts this week, snagging a plum customer contract and adding to its line of equipment for telecommunications networks.

Williams Communications announced Monday that it would use Redback's SmartEdge 800 equipment to power its fiber optics networks in metropolitan areas. The deal, valued at $120 million over two years, marks the first time Williams has purchased equipment from Redback.

Subsequently, on Tuesday Redback introduced new optical equipment called SmartEdge 100, which performs the same tasks as the 800, but takes up less space and is therefore useful in different network situations.

"With the Williams win and an impressive SmartEdge customer base that includes carriers (like) Qwest Communications International, Cable & Wireless, and Genuity, we believe Redback has clearly established itself as the No. 2 player, behind Cisco, in the metro optical market," said WR Hambrecht analyst Tim Savageaux in a report.

The Williams deal represents a significant revenue source for Sunnyvale, Calif.-based Redback, which generated revenue of $278 million in fiscal 2000 and sales of $64.3 million in fiscal 1999.

Networking companies like Williams or Qwest typically use router-like devices like the SmartEdge 800 for their urban data centers. These centers contain racks of networking equipment that manage the flow of large ammounts of traffic coming from many sources.

The smaller size of the SmartEdge 100 makes it more suitable for use in the outer edge of a metropolitan network, like in large office buildings that are closer to customers that the carriers serve.