World Wide Packets Inc., the Spokane Valley-based company founded by computer networking guru Bernard Daines and sold recently to a Baltimore-area concern for nearly $300 million, says it expects to grow its operations here and is looking for larger quarters.


Early last month, Linthicum, Md.-based Ciena Corp., a maker of network communications infrastructure with about 2,000 employees, acquired World Wide Packets for about $197 million in cash and $88 million in Ciena stock, which is traded publicly on the Nasdaq system. Ciena also assumed about $11 million in World Wide Packets debt, for a total acquisition cost of about $296 million.


The Spokane Valley company, which now operates as a subsidiary of Ciena and soon will take on the Ciena name, makes high-speed networking products aimed at telecommunications companies, cable-TV concerns, and government entities. It employed about 180 people prior to the acquisition, including roughly 95 here, and although its currently cutting some administrative positions here as a result of the acquisition, its also budgeting to rebuild quickly and grow its presence here, says Matt Frey, a Spokane-based senior vice president with Ciena.


Absolutely, this will be a long-term location, says Frey, who previously was president and chief operating officer at World Wide Packets. This is a very positive thing for the Spokane community.


He says Ciena plans to add 10 to 15 employees to its operation here by the end of the year, and as many as 25 at a facility World Wide Packets has maintained in San Jose, Calif.


It actually might be more than that, Frey says of the expected job growth here. Theres a lot of growth in the market right now. Ciena is investing a lot in this division. Well see our presence here grow.


Most of the new hires here, he says, will be for higher-paying technical positions, mostly people with engineering degrees. Many will have masters degrees and Ph.D.s, he adds.


The bulk of the companys employees here and in San Jose are engineers or technicians. Though the company doesnt manufacture products here, much of its research and development, testing, and customer support and consulting is handled out of the Spokane Valley office, which occupies the former Future Shop Ltd. retail building at 115 N. Sullivan. The rest are administrative and support personnel, Frey says. The San Jose office is staffed mostly by engineers, and also doesnt do any manufacturing, which is contracted out to overseas producers, he says.


Frey says the building the company occupies in Spokane Valley has become too small for Ciena and is poorly configured for its use. He says the company would like to move that operation, perhaps within the next six months, and is looking for a roughly 30,000-square-foot building in the Spokane area, and might have one built.


He says the company also plans to move its San Jose offices to larger quarters there this year. That office employs about 65 people. The remaining about 20 World Wide Packets employees are scattered around the world in small, usually one-person sales offices, Frey says.


Wide-area Ethernet


World Wide Packets products were focused on whats called carrier Ethernet, which is a high-speed data networking technology used in wide-area networks such as for a neighborhood, campus, or even an entire metropolitan area. Such networks typically carry a combination of voice, data, and entertainment content. The company developed a line of products it markets under the LightningEdge brand name, and which are deployed at various points in a network, from a telecom providers hub switching facility to an end-users home or office.


The company says it has shipped more than 70,000 LightningEdge units to more than 100 customers in 25 countries.


Ciena quotes research predicting that the worldwide market for carrier Ethernet products will grow to $25 billion by 2010, driven mostly by a migration in the industry to that technology from older, slower technologies commonly in service today.


Ciena, meanwhile, is known for equipment targeted at long-distance fiber optic networks and the connections between those trunks and local, metropolitan-sized networks.


Its a perfect fit, says Frey. There was zero overlap in the product lines.


On the same day in January that Ciena announced its planned acquisition of World Wide Packets, it said it had landed a multi-year contract with AT&T to supply that telecommunications giant with technology developed by World Wide Packets.


Frey says he cant elaborate on the specifics of that contract, but says it is a very significant win for the company.


It validated the technology that was developed by World Wide Packets, and it gave Ciena the confidence that we had the product line needed where the market was going, he says.


World Wide Packets did an excellent job as a startup, says Frey, but adds, We got to the point where we would have had to make hard choices about expansion in the market. Being part of a larger company gives us the resources and support we need to grow, he says.


Ciena posted fiscal 2007 revenue of about $780 million, up 38 percent from the year earlier. Its fiscal year ended Oct. 31. It posted net income of $82.8 million, or 87 cents a share, for fiscal 2007. The company said recently that it expects its revenues to climb as much as 27 percent this fiscal year, including the boost from its acquisition of World Wide Packets.


World Wide Packets was founded here in 2000 by Daines, who had launched and sold other technology companies, including Packet Engines Inc., which he moved here from the Silicon Valley and later sold to Alcatel for $315 million.


Contact Paul Read at (509) 344-1262 or via e-mail at [email protected].