& cplSiteName &

Calix Gambles on a Software-Defined Reboot

Carol Wilson
6/28/2017
100%
0%

In early June, at the historic St. Francis Hotel in San Francisco, Calix did something its executive team says it hasn't done in the company's 18-year history: gather an array of industry analysts and trade media to hear a company presentation. The occasion? What they believe is groundbreaking technology and business change within the company.

The event underscored two important aspects of what's happening at Calix Inc. (NYSE: CALX): First, that Calix's move to software-defined access has been a long time in the making but is now fueling freaky-fast new product introductions and expanding the company's potential market. And second, that Calix needs more people to understand and acknowledge the significance of what it's done in order to capitalize on its apparent market advantage because, to date, it remains the smallest player in market capitalization, by a wide margin, in an ever-shrinking field of access vendors.

By CEO and President Carl Russo's measure, Calix has spent the last decade, and particularly the last six-and-a-half years, transforming itself from a wireline access systems company to "a communications software and services company that, oh by the way, ships systems as well." The significant investment in time and talent -- Calix now has top executives it has plucked from Juniper, Commscope and Salesforce.com, among others, and a core group of developers it acquired with Occam -- has not made the company a Wall Street darling, however, and may have had the opposite effect.

Calix President and CEO Carl Russo Talks to Analysts

"Wall Street is waiting to see the value in terms of customer wins and revenues," says Julie Kunstler, Ovum Ltd. senior analyst. As a technology analyst, she considers Calix's new software-defined access platform to be "highly differentiated."

"There was a monumental effort. It was very well designed and will serve their customers very well," Kunstler comments.

Independent analyst Matt Davis heard what Calix executives had to say, but also saw it underscored by open praise from large customers or potential customers -- namely Verizon Communications Inc. (NYSE: VZ), via a Calix press release, and CenturyLink Inc. (NYSE: CTL), in the person of Frank Miller, vice president of architecture, speaking to the media/analyst event.

"I am normally very wary of words like first, newest, or unique," he comments. "What makes me more confident that they do have a time advantage over their competition is listening to their customers. It is often hard to get a top network executive from a company like Verizon to be quoted in your press releases and be on stage at your customer events, like CenturyLink was. To have them come out and talk about the differences in terms of speed-to-market this thing can enable gives me confidence that this wasn't just a line of bull."

Kudos from customers and analysts are great, as are significant revenue bumps in the last two quarters and a projected 10% revenue bump this year over 2016. But Calix continues to post losses, based on its higher expenses, and expects that trend to continue through 2017. Its market cap of just under $350 million is about a third of Adtran Inc. (Nasdaq: ADTN)'s at $974 million and a much smaller fraction of the bigger players in the field including Huawei Technologies Co. Ltd. and Nokia Corp. (NYSE: NOK).

So the company that survived the telecom bust of 2001, outlasting literally dozens of other access companies, must now prove its bold gamble on software-defined access can pay off and it can not only survive but thrive going forward.

Next page: The making of AXOS

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Featured Video
From The Founder
Light Reading founder Steve Saunders grills Cisco's Roland Acra on how he's bringing automation to life inside the data center.
Flash Poll
Upcoming Live Events
February 26-28, 2018, Santa Clara Convention Center, CA
March 20-22, 2018, Denver Marriott Tech Center
April 4, 2018, The Westin Dallas Downtown, Dallas
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
Infographics
SmartNICs aren't just about achieving scale. They also have a major impact in reducing CAPEX and OPEX requirements.
Hot Topics
Here's Pai in Your Eye
Alan Breznick, Cable/Video Practice Leader, Light Reading, 12/11/2017
Verizon's New Fios TV Is No More
Mari Silbey, Senior Editor, Cable/Video, 12/12/2017
Ericsson & Samsung to Supply Verizon With Fixed 5G Gear
Dan Jones, Mobile Editor, 12/11/2017
Cloudy With a Chance of Automation: Telecom in 2018
Iain Morris, News Editor, 12/12/2017
Juniper Turns Contrail Into a Platform for Multicloud
Craig Matsumoto, Editor-in-Chief, Light Reading, 12/12/2017
Animals with Phones
Don't Fall Asleep on the Job! Click Here
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed