Crescent Networks Inc. is living on the edge.

The edge router company is hoping its customer trials turn into product revenues before it runs out of cash. This week it took measures to stretch its money further by firing about two thirds of its remaining staff.

The layoffs this week took the company's number down from about 62 to 21, according to Crescent CEO Gerald Wesel. That's down from the "over 120" employees it listed in February.

[Editor's note: The writing was on the wall at Crescent -- both literally and figuratively -- when Light Reading visited the company a couple of months ago; the company's kitchen had a sign that read "Please note: beer is no longer free."]Dr. James Luciani, Crescent's chief technical officer; Abhay Joshi, its VP of strategy and business development; and Len Major, its chief financial officer, were among those cut, the company says.

Since the beginning of the year, Crescent has lost other cogs in its management machine, including: Doug Faber, its VP of marketing; Curt Newton, founder and senior director of product marketing; and Kenneth Stumpf, its director of professional services.

In talking about the layoffs Wesel swims through a stream of clichés, comparing the telecom recession to the "Perfect Storm."

"I don't think anyone's immune to this," he says.

The layoffs overshadow some good news Crescent released this week regarding how its product, the VRX-1000 fared in tests with BTexact Technologies, the equipment testing arm of British Telecommunications plc (BT) (NYSE: BTY; London: BTA). The tests, paid for by Crescent, showed that Crescent's edge router was scaleable, dense, and friendly enough with other equipment to be considered by service providers.

"Throughout the duration of the test period, the VRX-1000 interoperated flawlessly with the other routers in the test network," the test results state. Those other routers included Cisco Systems Inc.'s (Nasdaq: CSCO) GSR 12016 core routers and its 3600 large office routers.

BTexact's route capacity test showed that the VRX-1000 could store 1,500,000 BGP (Border Gateway Patrol) routes and 200,000 OSPF (Open Shortest Path First) routes in its routing table. "That's a way of saying it can connect to and manage a lot of complicated corporate networks at the same time," says Jim Finucane, Crescent's senior VP of engineering.

The VRX-1000 was also shown to forward packets with IP payloads of 64 bytes to 1,500 bytes at line rate. In other words, it can handle packets of varying sizes without slowing down to think about how to handle each packet.

Another feature the test uncovered was the router's ability to control the speed of each interface, a feature known as rate-limiting. This allows service providers to charge for a wider variety of services using the same bandwidth connection.

Also remarkable is the fact that, due to a snafu in customs, BTexact only received one and a half days of the scheduled week of training, according to Wesel. That, he says, is testament to the product's ease of use.

Wesel says Crescent's next move is to keep supporting its six carrier trials with an eye toward fund raising once it has a paying customer. Wesel says he doesn't expect revenues to begin coming in until early 2003. Meanwhile, its archrival Redback reported $6 million in edge router revenues from four new customers during its most recent quarter (see Redback Sees Rebound).

Crescent raised a $24 million funding round back in April, bringing its total funding to date to $66 million (see Crescent Angles for the Edge).

— Phil Harvey, Senior Editor, Light Reading
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