Optisphere's Spielvogel Speaks American

Siemens spinoff Optisphere is still unknown in the U.S. market. The new management team hopes to change that

February 28, 2001

3 Min Read
Optisphere's Spielvogel Speaks American

Optisphere Networks Inc., which was spun out of Siemens AG (Frankfurt: SIE) last April, has finally pulled together its management team, as it tries once again to push its way into the U.S. market.

Siemens, which still owns 85 percent of the company, yesterday named Jost Spielvogel, a senior Siemens executive, as the new Optisphere CEO (see Spielvogel Named Optisphere CEO). Thomas Mader, a former Lucent Technologies Inc. (NYSE: LU) exec, who was based in Nuremberg, Germany, was named president and COO. And Roy Koelbl, former vice president and network infrastructure officer at Teleglobe (Toronto: BCE), was named vice president and CTO.

“For us to be one of the leaders in optical networking, we have to create more visibility in the U.S.,” says Spielvogel. “There is much more potential here for the DWDM market, and we need to be on top of it. People may not have heard of us yet here in the U.S., but they will.”

With the appointments, Siemens hopes to jump-start Optisphere's U.S. marketing campaign, which has been almost non-existent since last April, when it was spun off as a subsidiary based in the U.S (see Vendors To Spin Off Optical Assets).

Another U.S.-based Siemens spinoff, Unisphere Networks Inc. (proposed Nasdaq symbol: UNSP), has filed to go public and is expected to make its public debut some time in the next month (see Unisphere Tunes Up for IPO). Despite its low U.S. profile, Optisphere claims that it has still managed to generate $250 million in revenue over the past year. Not bad, considering that the company seems to be overshadowed by players like Ciena Corp. (Nasdaq: CIEN), Corvis Corp. (Nasdaq: CORV), Lucent Technologies Inc. (NYSE: LU), Nortel Networks Corp. (NYSE/Toronto: NT), and Sycamore Networks Inc. (Nasdaq: SCMR).

“Honestly, I don’t see them in the U.S. market at all,” says Gina Sockolow an analyst with Brean Murray & Co. Inc.. “But there is a lot of European infrastructure out there for them to sell into, and I’d have to guess that it's coming more from there.”

Spielvogel cites WorldCom Inc. (Nasdaq: WCOM) as a key U.S. customer, but he admits that the bulk of the company’s current sales are international.

Even though it hasn’t gotten much exposure in the U.S., Optisphere has announced some interesting milestones in its product development. For example, back in September it announced it had completed lab trials of its 40-Gbit/s (OC768) long-haul DWDM system, and it claims that its product scales up to 160 channels (see Siemens Claims Speed Record). And Spielvogel says that the company isn’t stopping with long-haul products; it also has an ultralong-haul system, an all-optical switch, and it plans to add a metro DWDM line.

Unlike Unisphere, which was formed through the acquisitions of three networking companies, Optisphere came from a division already operating within Siemens. These strong connections to Germany make some analysts wary.

“In general, Siemens has had plenty of time to crack the U.S. market,” says Mark Lutkowitz, VP of optical networking research for Communications Industry Researchers Inc. (CIR). “But it’s much harder to stay focused and execute quickly when you’ve got to call Germany for every move. Alcatel SA (NYSE: ALA: Paris: CGEP:PA) is a fine example of a European company with a U.S. subsidiary. They always seem to be half a step behind in the U.S. Let’s just say I don’t see Optisphere becoming a big American powerhouse.”

But Spielvogel sees the Siemens connection as a positive, claiming that the company can leverage the worldwide sales team and deep R&D pockets of its parent.

"We’ll be running the day-to-day operations here,” he says. “But we can still draw from the breadth of expertise of Siemens and still operate like a startup.”

-- Marguerite Reardon, senior editor, Light Reading, http://www.lightreading.com

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