Altamar Cans Its Optical Switch
This brings to an end a project that's always seemed somewhat ambitious. It included not just a grooming switch capable of scaling to a huge capacity (see Altamar Unveils High-Density Switch) but also an integrated long-haul DWDM system.
Ditech set up a separate "startup" company -- Altamar Networks Inc. -- to develop the system. And fairly early on, Altamar acquired the assets and engineering team of a startup in financial trouble -- the U.K.'s Ilotron -- to help it build its Titanium wonder (see Altamar Buys a Bargain).
Like Altamar, Ilotron was developing an optical switch and transport system, although Ilotron's switch had an optical core, not an electrical one like Altamar's (see Altamar Adopts Velio Switch).
Ian Wright, Altamar's senior VP and CTO, says the decision to halt work on Titanium was "just a question of numbers." It simply wasn't worth spending money on a system when the market for it had evaporated. "The risks were too great, and the rewards were too uncertain," Tim Montgomery, Ditech's president and CEO, said in a conference call this afternoon, adding that prospects had deteriorated rapidly in the past 90 days.
"There wasn't any problem with the technology," says Wright, claiming that Altamar was the first to come up with the idea of integrating switches and transport systems -- a concept now adopted by other vendors.
Wright thinks that carriers will need systems such as Altamar's sooner or later, because it's the only way they'll be able to bring down their operating costs.
Ditech now intends to focus on its other two businesses -- making echo cancellation equipment and optical transport subsystems, notably amplifiers and transponders. Wright says that development work on Altamar's Titanium project led to big improvements in Ditech's subsystems, and has given it a significant competitive edge in some markets. "There's a lot of fun to be had out of optical transport subsystems," he maintains.
Montgomery says there's also a lot of money in subsystems, because large vendors are moving towards buying in subsystems rather than making them themselves. Ditech's sales of subsystems totalled $14 million last year.
Some of Altamar's staff will be retained to work on the subsystems, but overall, Ditech plans to reduce staff to 200, from 294, in the next 60 days. — Peter Heywood, Founding Editor, Light Reading