April 9, 2001
Dennis Rainville, CEO of Équipe Communications Corp., has one piece of advice that he lives by: Listen to your customers.
It’s been almost two years since he sat at his kitchen table making calls to old friends at incumbent carriers asking them what they wanted in a new core switch. He soon realized that while Internet protocol (IP) was winning the public relations war, asynchronous transfer mode (ATM) still ruled in the network. And so he began putting together a team to build a next-generation ATM switch.
“We knew we weren’t going to be the sexiest company out there,” he says. “But the incumbents are like battleships in a harbor; it takes a long time to turn them. And we knew we needed to give them something they could use now.”
Today the startup revealed plans for its first product, the E3200, a multiservice core switch that handles both native ATM and IP multiprotocol label switching (MPLS) traffic. This new platform supposedly will allow carriers to migrate from one transport technology to the other without a big network upgrade. The product also offers carrier-class software and a denser platform than competing switches, says the company (see Équipe Unveils ATM-to-IP Switch).
“The ILECs won’t throw away a paper clip,” says Rainville. “They’ll displace equipment further to the edge, but they won’t rip out infrastructure. I think everyone knows IP is coming, but it’s just taking longer than people expected.”
The new E3200 employs an independent switch fabric that can handle both packets and cells. This means that unlike core MPLS switches from startups like Tenor Networks Inc., the E3200 can actually handle ATM cells without converting them to packets. In addition, the E3200 incorporates a Sonet STS1 (51.8 Mbit/s) crossconnect allowing it to handle voice and private line traffic in its native state(E3200 Specification Sheet).
The reasoning behind Équipe’s approach is simple, explains Rainville. Large carriers are still deriving much of their revenue from ATM-based services like frame relay and from Sonet-based voice traffic. At the same time, these carriers are also looking to implement IP services like virtual private networks (VPNs). The dilemma they face is that they need to preserve the old-money-making services, while finding a smooth way to move toward offering newer services.
It’s no coincidence that Équipe has focused on ATM. Three of the company’s four founders, Rainville, Joe Whitehouse, director of product management, and Chris Noel, director of technology, had worked at Cascade Communicaitons, which was bought by Lucent Technologies Inc. (NYSE: LU). After the acquisition, they helped develop Lucent’s ATM product line, making it one of the most widely sold ATM systems in the industry. The three have joined forces with former Wellfleet and Nortel Networks Corp. (NYSE/Toronto: NT) software engineer Terry Pearson, director of software engineering, to develop the E3200. The old-world connections have paid off for the startup, which says it will enter beta trials this summer and most likely announce a big customer by the end of the year.
“I knew we’d take advantage of our Cascade heritage,” says Rainville. “But I didn’t realize how much it would pan out for us.”
But building just another ATM switch that could handle IP would not have been enough, adds Rainville. The founders had learned from their experiences at Cascade/Lucent and Nortel that carrier class software was needed to differentiate their product from other ATM players like Cisco Systems Inc. (Nasdaq: CSCO), Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA), Lucent, Nortel, and Alcatel SA (NYSE: ALA; Paris: CGEP:PA).
“Software has been the Achilles heel for these big players,” says Rainville. “Most of the big outages can be directly traced to software problems. It’s cost AT&T over $800 million in service-level agreement kickbacks.”
The latest example of this occurred last week, when Qwest Communications International Corp. (NYSE: Q) suffered a major outage of its national ATM network. Software problems appear to be the cause (see In Qwest Outage, ATM Takes Some Heat).
Analysts agree that software is a crucial element in the core. “There doesn’t seem to be a commitment from the big ATM vendors to build a next-generation product,” says Christine Heckart, president of TeleChoice Inc., a strategic consulting firm. “It’s not just about hardware. Équipe has the advantage of building the product from scratch and really making the software carrier-class.”
While more reliable software is certainly an important differentiator, the smaller/cheaper/faster mantra is also important when selling against big incumbent vendors. Rainville claims the E3200 has got that covered, too. According to Équipe’s marketing literature, the E3200 offers five times the port density of its competitors, an 80 percent reduction in price per bit, and a 60 percent reduction in power consumption.
Alpha testing of the E3200 was completed in March and beta testing is scheduled for June 2001. The company expects to ship the E3200 for revenue by the end of the year.
-- Marguerite Reardon, Senior Editor, Light Reading http://www.lightreading.com
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