Ciena will redirect R&D spending from residential broadband access to AI and data center productsThe move is in part due to the slower 25G uptake in broadband, said CEO Gary SmithHe noted Ciena is seeing increased demand from \u201cneoscaler\u201d companies<\/p>\n
As Ciena continues to chase AI and cloud growth<\/a>, it wants to make sure it\u2019s funneling research and development money in the right direction.<\/p>\n To that end, CEO Gary Smith announced today Ciena intends to \u201c[redirect] additional R&D investment\u201d into coherent optics, routing and other data center interconnect products, while pulling back on spending for its residential broadband access portfolio.<\/p>\n \u201cTo be clear, we will continue to sell and support our existing broadband access products,\u201d he said on the company\u2019s Q3 2025 earnings call. \u201cHowever, we will be limiting our forward investments only to strategic areas such as DCOM.\u201d<\/p>\n That refers to Ciena\u2019s data center out-of-band management solution<\/a>, which involves replacing bulky legacy hardware like copper cabling and console servers with passive optical network (PON) technology.<\/p>\n Ciena\u2019s push from broadband explained<\/p>\n The reason for reducing residential broadband spend boils down to speed demand, Smith told Fierce in an exclusive interview. The move to 25G PON and beyond is \u201chappening slower\u201d than expected in that segment, as Ciena\u2019s broadband access customers are still mainly using 10G for deployments.<\/p>\n \u201cFolks are more concentrated on 10-gig and driving that out, and there\u2019s a good market for that,\u201d said Smith. \u201cAs we looked at our overall portfolio and our investments in [25-gig], we see so much opportunity in these different AI workloads that we want to continue to really make sure we\u2019re heavily invested in that.\u201d<\/p>\n Dell\u2019Oro Group VP Jimmy Yu thinks Ciena\u2019s move to re-allocate R&D dollars makes sense so that the company is not \u201cspread too thin and [misses] out the biggest opportunity sitting in front of them.\u201d<\/p>\n \u201cMy guess is that to address the future of AI workloads and AI data center interconnect, Ciena will need to not only maintain their cadence on launching new high performance coherent optics like the WaveLogic 6e for long distance 1.6 Tbps connections, but also optical devices for shorter distances like 800 ZR\/ZR+ plugs and even shorter distances that take them inside the data center,\u201d Yu explained.<\/p>\n