Light Reading

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        ADD A COMMENT
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
Last week I dropped in on "Hotlanta," Georgia to moderate Light Reading's inaugural DroneComm conference – a unique colloquium investigating the potential for drone communications to disrupt the world's telecom ecosystem. As you will see, it was a day of exploration and epiphany...
Between the CEOs
Affirmed Networks CEO: Digging Into NFV

5|28|15   |   40:26   |   (2) comments


Hassan Ahmed, CEO of Affirmed Networks, is making some big claims for his NFV startup. I sat down with him at the Light Reading HQ in New York City to get the skinny on what this Acton, Mass.-based startup is up to.
LRTV Documentaries
Cable Eyeing SDN for Headend, Home Uses

5|26|15   |   05:57   |   (1) comment


CableLabs is looking at virtualizing CMTS and CCAP devices in the headend, as well as in-home devices, says CableLabs' Karthik Sundaresan.
LRTV Documentaries
Verizon's Emmons: SDN Key to Cost-Effective Scaling

5|22|15   |   03:53   |   (0) comments


For Verizon and other network operators to ramp up available bandwidth cost effectively, they need to move to SDN and agree on how to do that.
LRTV Documentaries
Lack of Universal SDN a Challenge

5|21|15   |   04:51   |   (3) comments


Heavy Reading Analyst Sterling Perrin talks about how uncertainty about SDN standards and approaches may be slowing deployment.
LRTV Custom TV
Steve Vogelsang Interview: Carrier SDN

5|20|15   |   05:02   |   (0) comments


Sterling Perrin speaks to Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, about the new Carrier SDN-enabling Network Services Platform and the operator challenges it solves.
LRTV Custom TV
Carrier SDN: On-Demand Networks for an On-Demand World

5|20|15   |   20:52   |   (0) comments


Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, talks about requirements and benefits of Carrier SDN during the keynote address at the Light Reading Carrier SDN event May 2015.
LRTV Documentaries
The Security Challenge of SDN

5|19|15   |   02:52   |   (0) comments


CenturyLink VP James Feger discusses concerns that virtualization could create new vulnerabilities unless network operators build in safeguards.
LRTV Custom TV
NFV Elasticity – Highly Available VNF Scale-Out Architectures for the Mobile Edge

5|18|15   |   5:50   |   (0) comments


Peter Marek and Paul Stevens from Advantech Networks and Communications Group talk about their NFV Elasticity initiative and the company's latest platforms for deploying virtual network functions at the edge of the network. Packetarium XL and the new Versatile Server Module: 'designed to reach parts of the network that other servers cannot reach.'
LRTV Huawei Video Resource Center
Bay Area Spark Meetup 2015

5|14|15   |   3:54   |   (0) comments


Developed in 2009, Apache Spark is a powerful open source processing engine built around speed, ease of use and sophisticated analytics. This spring, Huawei hosted a meetup for Spark developers and data scientists in Santa Clara, California. Light Reading spoke with organizers and attendees about Huawei's code contributions and long-term commitment to Spark.
LRTV Custom TV
The Transport SDN Buzz

5|12|15   |   06:01   |   (1) comment


Sterling Perrin, senior analyst at Heavy Reading, speaks with Peter Ashwood-Smith of Huawei and Guru Parulkar of ON.Lab about the evolution of transport SDN and the integration of technologies.
LRTV Custom TV
Next-Generation CCAP: Cisco cBR-8 Evolved CCAP

5|5|15   |   04:49   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explained the innovation design of Cisco's cBR-8, the industry's first Evolved CCAP, including DOCSIS 3.1 design from ground-up, distributed CCAP with Remote PHY and path to virtualization. Cisco's cBR-8 Evolved CCAP is the platform that will last through the transitions.
LRTV Custom TV
Meeting the Demands of Bandwidth & Service Group Growth

5|1|15   |   5:35   |   (0) comments


Jorge Salinger, Comcast's Vice President of Access Architecture, explains how DOCSIS 3.1 and multi-service CCAP can meet the demands of the bandwidth and service group growth.
Upcoming Live Events
June 8, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Procera has gathered facts, stats and customer experience feedback from a survey of 540 users from across the globe.
Hot Topics
Charter Seals Deals for TWC, Bright House
Mari Silbey, Senior Editor, Cable/Video, 5/26/2015
Eurobites: Alcatel-Lucent Trials 400G in Czech Republic
Paul Rainford, Assistant Editor, Europe, 5/26/2015
Will Carriers Follow Facebook's Networking Lead?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 5/28/2015
Charter Plans Business Services, Wireless Push
Alan Breznick, Cable/Video Practice Leader, 5/27/2015
Facebook Reinvents Data Center Networking
Mitch Wagner, West Coast Bureau Chief, Light Reading, 5/26/2015
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
On May 29th 1 PM ET, Steve Saunders, founder and CEO of Light Reading, will be drilling into the "pains and gains" of NFV with Saar Gillai, SVP & GM for NFV at Hewlett-Packard Co. (NYSE: HPQ) (HP). He has defined a four-step NFV model describing a sequence of technology innovation. It's a must-read doc for any network architect looking to get to grips with their NFV migration strategy. Join us for the interview, and the chance to ask Saar your NFV questions directly!
Hassan Ahmed, CEO of Affirmed Networks, is making some big claims for his NFV startup. I sat down with him at the Light Reading HQ in New York City to get the skinny on what this Acton, Mass.-based startup is up to.
Cats with Phones