Tachion Networks, to the chagrin of its first customers, has decided to take a pared down approach to an already crowded market.

The firm's overall goal hasn't changed: It still intends to sell a switch that combines frame relay, IP, ATM, SS7 signaling, voice services, and an integrated Sonet add-drop multiplexer. But the delivery of what Tachion calls Bundled Broadband Services isn't going to happen for some time.

Instead, Tachion will first introduce its Fusion 5000 product as an Internet offload box, primarily used to help carriers move Internet data traffic away from their circuit-switch networks. "We chose to ship an interim application -- Internet offload -- in part to show the world the robustness and stability of the platform," says Tachion CEO Jeff Matros.

"What we are shipping is the [Fusion 5000] hardware and Internet offload application to new customers that haven't been announced yet," he explains. "Whoever purchases the product for Internet offload can do a software upload and add the packet and broadband services capabilities."

But what of Tachion's announced customers? "We never shipped to those customers because we haven't finished the Bundled Broadband Services application," Matros says. "Those are just contracts that are sitting in place."

Of Tachion's three announced customers, one is in a holding pattern, one has opted to buy from another vendor, and one couldn't be reached for comment.

"We have not taken delivery of any equipment in fulfillment of the [Tachion] contract signed last year," says Myron Hosea, a spokesman for Gabriel Communications. Last year Tachion touted a $40 million deal with Gabriel, one of its investors. "From what I understand Tachion is expected to deliver sometime this summer. The contract is still in effect but we have not received equipment yet for testing."

ACD.net, to which Tachion was supposed to supply up to two dozen Fusion 5000 boxes over the next two years, wouldn't comment on its relationship to Tachion. In March, however, ACD.net announced it had begun deploying equipment made by Convergent Networks Inc., a Tachion competitor.

Representatives for TelePacific Communications, which had a $35 million deal with Tachion, couldn't be reached for comment.

After its experience with its early customers, Matros says Tachion was able to "bring the products back in and build the exact feature requirements that were needed for a real customer network." That's when the company decided to pursue a lower hanging fruit, namely the Internet offload application.

Some, however, insist that Tachion's box never really worked as advertised. "[Tachion] said they would deliver certain features by a certain date and they didn't," says an executive at one service provider familiar with Tachion's technology. "Our belief is that they're still significantly behind the curve in terms of delivering a functioning product."

To its credit, Tachion has been upfront about when it's missed engineering deadlines and pushed shipping dates back, particularly those that coincided with its growing pains and aborted plans to go public last year (see Tachion Tackles Its Critics).

Still, by taking the interim step of going to market with an Internet offload box, as opposed to a multiservice switch with more bells and whistles, Tachion is trudging into an even more competitive arena at a time when carriers are liberally slashing equipment spending. Vendors that also lay claim to the Internet offload business include Cisco Systems Inc. (Nasdaq: CSCO), Convergent Networks Inc., Lucent Technologies Inc. (NYSE: LU), Sonus Networks Inc. (Nasdaq: SONS), Telica Inc., Oresis, Santera Systems Inc., Rapid5 Networks, Taqua Systems, Unisphere Networks Inc., and Zhone Technologies Inc..

And what about revenues? Well, those checks are still in the mail. "We expect to bring in revenues [on shipments to recent, unannounced customers] as soon as our accounts receivable people can bring it in," Matros says.

That said, Tachion, which was voted the 2000 Private Company of the Year by the New Jersey Technology Council, contends that the fact that it's been around longer than many of its startup competitors could be an advantage. "Since we're all building a box that hasn't been built before, the year-plus experience that we've had has given us a wealth of experience that we can now incorporate into the product," Matros says.

Some carriers, however, vow they won't be sucked in by Tachion's tubthumping. "Tachion's a great marketing company," says a service provider executive. "But good equipment marketing isn't the most important thing to carriers right now."

-- Phil Harvey, Senior Editor, Light Reading http://www.lightreading.com