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Altamar Cans Its Optical Switch

Another optical switch project officially bit the dust today when Ditech Communications Corp. (Nasdaq: DITC) announced that it was halting development work on its Titanium optical transport system (see Ditech Drops Optical Transport).

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
www.lightreading.com
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grapsfan 12/4/2012 | 9:42:16 PM
re: Altamar Cans Its Optical Switch For those who weren't at the show last week, Altamar had one of the flashier booths at the show. The Titanium box was far and away the centerpiece, with presentations on it every 30 minutes. The speaker was the only one I saw in costume...all in black (boots, pants, shirt, leather overcoat, shades), like some guy from the future telling us how great this do-everything-in-huge-capacity box was.

Now, seven days later, it's in the crapper. Which of the following three theories do you think is closer to the truth?

1) They figured, "what the hell, let's use our last $50K in a little bit of style".
2) They were waiting on the white knight to save them at the 11th hour at a trade show where only 400 people (according to one show worker) weren't from an equipment vendor.
3) They're really stupid.

These aren't mutually exclusive theories, I suppose. But there's a good chunk of #3 in there if they think that the market for a box this big has only dried up in the last 90 days.
gsenechal 12/4/2012 | 9:42:12 PM
re: Altamar Cans Its Optical Switch

I would guess their participation at NFOEC was more a case of the Marketeers at Altamar not knowing about the plans to can their product line.

These days the big excitement for senior management is announcing some sort of cutback or new strategy.. Wouldn't want to wreck the surprise by telling your own people just to save money.

jamesbond 12/4/2012 | 9:42:09 PM
re: Altamar Cans Its Optical Switch I would guess their participation at NFOEC was more a case of the Marketeers at Altamar not knowing about the plans to can their product line.

These days the big excitement for senior management is announcing some sort of cutback or new strategy.. Wouldn't want to wreck the surprise by telling your own people just to save money.
-------------------------------------

This is another example of why companies
don't need layers of management. If the VCs
were smart they would fire ALL the management
except CTO. Have the engineers report
to CTO. Do away with all the rest of the fluff,
including huge office space etc. Have one
room with tables for engineers and lab equipment.
Divide the work hours in batches, so you
pay each engineer for 3 days of work/week.
Note this is still better than being unemployed.


Ah, I wish somebody had balls...


dietaryfiber 12/4/2012 | 9:42:06 PM
re: Altamar Cans Its Optical Switch Well, at least they pulled the plug. Now if only Sycamore, Ciena and Corvis would admit that the market for their products has disappeared. Maybe they should buy McDonalds franchises with their money.

dietary fiber
straight shooter 12/4/2012 | 9:42:06 PM
re: Altamar Cans Its Optical Switch The handwriting was on the wall on this one for some time now. Evidence points:

1) Outrageous claim of 2 million OC-192 ports by 2003. What carrier would need this? What real architecture could support this? Big gaffe on both the marketing and engineering side.

2) Engineering from Atmosphere. A failed ATM mux team building a switch of this size? Get real!

3) Ditech ownership. Second rate plug/subsystem supplier pulling this systems play off and the carriers believing it? Please!

4) Analyst support. Mark Lutkowitz--like a fat rat following the Pied Piper he touted them at nearly every public conference.

5) Laser lights and trench coats. Their tradeshow shtick was a 3 year old warmed over Matrix knock off.

Actually, in retrospect, Altamar was like the Matrix--encompassed by an altered reality.

Remember, "There is no spoon."
bitsarebits 12/4/2012 | 9:42:03 PM
re: Altamar Cans Its Optical Switch Finally, bubble bursted for this company.

I heard the company had around 100 people before they they start to build Titanic Switch. Then
They bought Atmosphere Networks, U.K.'s Ilotron,
setup a division in Austrilia, etc, which increase headcount to 290. Now, finally, show
is over. Headcount reduce to 200, but, that was
still higher than original 100 people, plus,
market for Echo canceller and subsystem also
shrinked. Still lots of hot air ....
???? 12/4/2012 | 9:41:58 PM
re: Altamar Cans Its Optical Switch Hey, management was trying to create the next digital link
pavlovsdog 12/4/2012 | 9:41:55 PM
re: Altamar Cans Its Optical Switch What exactly is Ditech expecting as far as subsystems to come from Titanium?
MrLight 12/4/2012 | 9:41:46 PM
re: Altamar Cans Its Optical Switch I would agree with :

>1) Outrageous claim of 2 million OC-192 ports by >2003. What carrier would need this? What real >architecture could support this? Big gaffe on >both the marketing and engineering side.


The other points are mute when you look at the port count claim. At say $5K a port price that is a 10 Billion dollar switch. They lost credibility from the moment those claims were came out of the marketeer's mouth. Have people learned anything from the "Silkroad overhang".

Too bad for the people involved though. :-(
BobbyMax 12/4/2012 | 9:41:23 PM
re: Altamar Cans Its Optical Switch It was the right thing to close Altamar. What is most impressive was admission of that the market for optical switches has vanished.

Closure of several optical switches in our country have not broght any dignified response. The statements if they were made were not honest.

A significant number of optical have closed and many others are in the process of being closed. The most unfortunate that happens in our country is that the company management would never voluntarily leave until they have deprived the company of its last penny.

There is simply no market for optical switches and they should gracefully closed.
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