Light Reading
Blue Planet platform deals are ramping up quickly as Cyan sees active SDN revenue, but that didn't prevent it getting a beating on the NYSE

Cyan's SDN Customer Wins Soar to 85

Light Reading
News Analysis
Light Reading
8/7/2013
50%
50%

Cyan, Inc. says it's making progress with real, revenue-producing SDN deployments while other vendors are "simply messaging" about the SDN trend.

In announcing its second quarter results -- its first earnings report as a public company since it listed in May -- Cyan Chairman and CEO Mark Floyd said the company now has 85 customers for its Blue Planet SDN platform, which launched in late 2012. (See Cyan Spins 'Blue Planet' For SDN).

That customer tally is up from 35 at the end of the first quarter, by the count of Jeffries analyst George Notter, who issued a post-earnings research note maintaining his "buy" rating on Cyan.

Cyan President Michael Hatfield added that "the lion's share" of those customers, none of which are in trial mode, are delivering reportable revenues to Cyan. "We are making real progress with SDN, while other companies are simply messaging," Hatfield said. Cyan's customer count follows Tellabs' recent, less specific claim of having several SDN customer engagements. (See Tellabs Boasts SDN 'Engagements'.)

Separate from the SDN wins, Hatfield said Blue Planet also allowed Cyan to get its foot in the door with an array of potential Tier 1 carrier customers during the second quarter. "What's interesting in the Tier 1s is it's coming from the top down," he said. "SDN is such an impactful movement that where we usually [experience] a lot of inertia, we are seeing more urgency [among carriers' top executives] and getting asked to do things with SDN a lot quicker than we expected."

Cyan, however, did not oversell its new engagements with the Tier 1s. Floyd said, "Tier 1 [buying] cycles are likely to be long and revenues not realized for a while." He added that Cyan's goal is to be deployed in Tier 1 networks starting next year.

While there are signs the tide is turning for vendors from hardware to software sales, the migration remains a gradual one. Floyd grounded the SDN celebration by noting that the vendor's software exploits are still well over-shadowed by its packet optical hardware revenue, with about 20 percent of the company's total customer base being software-only, and software currently making up less than 10 percent of Cyan's total revenue. "It's not yet a meaningful portion of total revenue," he said. "We'll start breaking it out when it reaches 10 percent. We think that revenue will become material in 2014."

For the second quarter, Cyan reported year-over-year revenue growth of 37 percent to $31.7 million, which beat many estimates. It posted a gross margin of 43.4 percent, but a net loss of $9.1 million, compared to $1.5 million a year ago and $9.4 million in the previous quarter.

Hatfield said increasing software business, including Blue Planet platform sales and related software applications, should help Cyan reach a three-to-five-year goal of gross margins between 50 percent and 60 percent.

In the short term, Cyan is offering third quarter guidance of a net loss between $8.6 million and $10 million from revenues of between $36 million and $38 million. And, it would appear, it was that third quarter guidance that resulted in a significant share price dip Wednesday, as Cyan saw its share price tumble by $1.71, more than 15 percent, to $9.32, below its May list price of $11. (See Cyan's Not Blue Over NYSE Debut.)

— Dan O'Shea, Managing Editor, Light Reading

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
DOShea
100%
0%
DOShea,
User Rank: Blogger
8/7/2013 | 8:21:52 PM
re: Cyan's SDN Customer Wins Soar to 85
Cyan also has been beating the drum over international expansion, but Floyd said those opportunities are developing more slowly than expected, with early returns on that investment not likely until Q4.
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Huawei Video Resource Center
Interview With Rick Talbot, Principal Analyst, Current Analysis

10|31|14   |   2:12   |   (0) comments


At the NFV Open Cloud Forum 2014, Rick Talbot shared his positive feedback about the holistic and open approach that Huawei adopts for SDN and NFV. He also found the open sharing at the event valuable as it features different perspectives from Huawei experts, telecom operators, industry analysts as well as security experts.
LRTV Huawei Video Resource Center
Interview With David Snow, Principal Analyst, Current Analysis

10|31|14   |   2:24   |   (0) comments


David Snow talked about his understanding of Huawei and its SoftCOM strategy at the NFV Open Cloud Forum 2014, saying that Huawei's wide approach combining IT and CT expertise, introducing big data and analytics into solutions and contributing to the OpenStack community particularly resonate with him and make the company stand out in the industry.
LRTV Huawei Video Resource Center
Interview With Roz Roseboro, Senior Analyst, Heavy Reading

10|31|14   |   3:13   |   (0) comments


Roz Roseboro commented on Huawei's data center capabilities and NFV solutions at the NFV Open Cloud Forum 2014, saying that in addition to covering all three key domains of compute, storage and networking, the company also emphasizes the importance of management capabilities and professional services, which are essential in making NFV a reality.
LRTV Huawei Video Resource Center
Interview With Michael Howard, Co-founder & Principal Analyst, Infonetics Research

10|31|14   |   5:25   |   (0) comments


Michael Howard talked about SDN, NFV, and OpenStack adoption at Huawei's NFV Open Cloud Forum 2014. Particularly, he pointed out that Virtual Enterprise CPE is the top NFV use case that operators plan to invest in over 2014 and 2015 to deliver new enterprise services through virtualized functions.
LRTV Huawei Video Resource Center
Interview With Jerry Caron, Senior Vice President, Current Analysis

10|31|14   |   3:11   |   (0) comments


At Huawei's NFV Open Cloud Forum 2014, Jerry Caron from Current Analysis said that orchestration and management are key to realizing SDN and NFV for global carriers, and the approach that Huawei is taking, with its FusionSphere Cloud OS at the core, is in the right direction to address the challenges.
LRTV Documentaries
Broadband Battles

10|31|14   |   01:39   |   (0) comments


This year's Broadband World Forum featured a number of show floor battles focused on access gear, components and coffee.
Jonestown
Mobile Backhaul: Going to the Dark Side?

10|30|14   |   2:26   |   (1) comment


Heavy Reading's Patrick Donegan shares his view on a dark trend that bubbled up at Light Reading's annual backhaul conference in NYC.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

10|30|14   |   4:13   |   (0) comments


SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

10|30|14   |   4:08   |   (0) comments


Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

10|30|14   |   5:46   |   (0) comments


Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

10|30|14   |   3:31   |   (0) comments


Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

10|30|14   |   4:29   |   (0) comments


In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
Upcoming Live Events
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
Wheeler Gets Down With OTT
Mari Silbey, Independent Technology Editor, 10/29/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Let's Not Kill SDN & NFV With Silos
Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
Like Us on Facebook
Twitter Feed