The Top Ten Movers and Shakers in Optical Networking

The Top Ten Movers and Shakers in Optical Networking

May 31, 2001

37 Min Read
The Top Ten Movers and Shakers in Optical Networking

Parental Guidance Warning

This article contains language that may be deemed offensive by some people, including – but not limited to – the very young, the very old, those living in Offal, Utah, and people who actually use this language themselves but didn’t expect to be quoted using it in an article on Light Reading. If you’re upset by profanity then you should probably take one click back, now. All celebrity voices are impersonated.

Light Reading Editors

Ah, the Light Reading Top Ten Movers and Shakers list.

A new list is like a fresh cup of joe in the morning – refreshing, perky, a real picker-upper.

What a pity, then, that it took us all of nine months to get around to updating our last list (see The Top Ten Movers and Shakers in Optical Networking). At this rate you should expect the next list sometime in the autumn. Of 2004. (Hey! It’s not as if the industry changes that quickly!)

At any rate, we present here now, for your edification, The List IV – the latest in this very occasional series. We hope you like it; although that’s perhaps a vain hope, judging from the email responses we got to the last list (see Fear and Loathing In the Inbox).

Whatever. It’s been a busy nine months in the optical networking industry. And that’s reflected in the new Top 10 rankings.

They include [drum roll] a brand new Number 1 Mover and Shaker, as well as five new inductees.

So much for the good news. On the debit side of the ledger, three of the players listed last time have dropped down the list, and four others fell off it altogether, ending up in the infamous Has-Been Bin. They include – wait for it, wait for it! – Vinod Khosla, the list’s former Numero Uno.

Eagle-eyed readers (with elephantine memories) will notice that we’ve also added some shiny new features to the Movers and Shakers list since last time.

In addition to Fear and Loathing In the Inbox (which showcases the writing skills of our most incisive and witty correspondents), we’ve added Close But No Cigar (which lists people who just missed the boat), and Where Are They Now? (for folk that have just plumb disappeared, alien-abduction-style, from the optical networking industry).

Table 1: Top 10 Movers and Shakers

NEW TABLE

Position

Name

Last Position on List

Number of Times Listed

1

Carl Russo

3

4

2

Pat Nettles

--

--

3

Greg Mumford

2

4

4

James Wei

--

--

5

Paul Ferri, Ed Anderson

--

--

6

David Huber

5

4

7

Kevin Kalkhoven

5

2

8

Milton Chang

8

2

9

Dan Smith

4

4

10

Wu-Fu Chen

6

4

HAS-BEEN BIN

Name

Last Position on List

Number of Times Listed

1

Vinod Khosla

1

3

2

Matt Bross

10

1

3

Noam Lotan

9

2

4

Rich McGinn

--

--

5

Wendell Weeks

7

1

6

Peter Lothberg

3

1



Let us know what you think of these new features, and the rest of our picks, by sending email to [email protected].

Mr. Frosty

Carl RussoHeard Cisco’s new corporate anthem?

  • We want Carl! He’s our man!
    If he can’t do it… we’re screwed…



Okay, so we made that up. But here are some other words that could have been written specifically for Carl Russo, Cisco’s optical Horatio:

  • If you can keep your head when all about you
    Are losing theirs and blaming it on you…



Fact is, the last eight months have been a Kiplingesque study in character. While many at Cisco Systems Inc. (Nasdaq: CSCO) have reacted to the Nasdaq’s 50 percent haircut by running around in a paranoid, skirt-flapping tizzy, Russo has changed not one jot – emerging as the Arthur Fonzerelli of the Cisco executive team.

Witness his handling of the Monterey closure, which represents the single smartest piece of marketing in the networking industry this year (see Cisco Kills Monterey Router). Instead of covering up the death of its core wavelength router, Russo turned it into a positive by taking the story public and positioning it as part of a strategic refocusing on the metro market. (Remember the metro market? It’s the one where the money is.)

It’s hard to overestimate the importance of Russo to Cisco at this low point in its history. Unlike the enterprise folk at Cisco, Russo understands optical technology and knows how to sell it to service providers. (Note to the rest of Cisco: Nobody appreciates being bitch-slapped by a router vendor telling them what to buy.)

He’s equally adept at handling Wall Street (his Lear jet speaks for itself), and the press (when in doubt, wave arms in air, quote Animal House, shout a lot).

But does he have enough sway to pull the company (and its stock price) back from the abyss? Not on his own. After all, Cisco faces some economy-size problems (see What Cisco Stepped In). The Monterey KIA aside, there’s the little matter of history’s largest inventory write-off (see Cisco's Q3: Ouch!). Plus, Cisco’s sinking stock price means it can’t buy its way into new markets like it used to.

Fortunately, for Cisco, Russo has a kindred spirit and potential in-house ally in Mark Cree, the recently appointed GM for Cisco’s storage networking line of business (for more on the striking similarities between Russo and Cree, see Close But No Cigar).

Overall, as Cisco’s woes have gotten worse, so Russo’s power within the company has increased [insert maniacal laugh]. For this reason, and the fact that the performance of most of the stock portfolios in the Western World will depend on his actions, we’ve bumped Russo up to the No. 1 position on our Movers and Shakers list – a jump of two places.

As the anonymous lisping poet hath it: Cometh the hour, cometh the man. And should Russo ever get bored and “goeth” Cisco will be in real trouble.

5414.gifNot the Least Bit Nettled

Pat NettlesMichael Genovese, a market analyst at Ciena Corp. (Nasdaq: CIEN), sent us a request after our last Movers and Shakers list came out:

  • While Ciena is clearly a, if not the, world leader in intelligent optical networking, please never include anyone from our company on your list of movers and shakers. Not only are the has-beens trashed, but the top 10 are as well. (I guess we don't acquire enough start-ups without products and/or put out enough exaggerated, gratuitous press releases to make it anyhow).



Sorry to disappoint you, Mike, but Pat Nettles’s performance over the last eight months makes him a shoo-in for the No. 2 spot (see Pat Nettles, Ciena).

Under his steady hand, Ciena has developed a product line that combines long-haul and ultra-long-haul transport features with the ability to groom small units of bandwidth. This unique feature set has allowed it to win contracts (see How Ciena Won TyCom ), raise fresh capital (see Ciena's War Chest and Ciena Tests Capital Markets), and close the biggest M&A deal of the year (buying Cyras – see Ciena Completes Cyras Purchase and JDSU, SDL Delay Merger).

[Ed: Insert trash-talk.]

What does it all add up to? A stock price that has ridden out the Nasdaq annihilation a lot better than any of its competitors:5414_ciena.gifNow if Ciena can just crank up production of those gratuitous press releases...

Flying Solo

Greg MumfordOn our last Top 10 list Greg Mumford shared the No. 2 spot with DonSmith – another Nortel mover and shaker.

Since then, Smith has left Nortel Networks Corp. (NYSE/Toronto: NT) for a career [sic] at Mitel Networks (see Don Smith's Mitel Shocker) – which is abit like a race-horse putting itself out to pasture (minus the stud fees, we presume).

Mumford isn’t showing many signs of post-partum depression, however. Judgingfrom his recent interviews with Light Reading he seems to beflourishing under the pressure, giving Nortel’s PR folk conniptions bytalking openly about both Nortel’s product plans and the hunt for asuccessor to John Roth (see Nortel's Got a Plan).

This time out, Mumford has dropped a spot on the list, to No. 3, partlybecause of Nortel’s lackluster performance of late. He would have droppedfarther, other than the fact that Smith’s departure makes him “da man” –actually increasing his sphere of influence within Nortel and the opticalindustry as a whole.

Can Mumford lead Nortel out of the desert? It’s too soon to say, and thecompany certainly has some serious problems (see Nortel Drags Down Market and Nortel Warns of Shortfall, More Layoffs).

Still, a lot of Nortel’s financial success over the last few years wasderived from Mumford’s decision to invest heavily in 10-gig before itscompetitors. That’s quite a track record. It will be interesting to see ifhe can successfully find and develop new technologies that can once more putNortel ahead of the curve.

Wei to Go!

wei.gifNow that we’ve bumped Vinod, it’s time for some fresh West Coast VC blood. (You’ll hear about the East Coast martini-sipping set later on in the list.)So who’s our selection from the cappuccino crowd? James Wei ofWorldView Technology Partners.

“Who?” you ask. True, Wei keeps a low profile, but he seems to have the fortunatecombination of technical know-how and management skills that allows him towork closely on deals – and with an impact. We gotthis note from a member of the Wei fan club:

He’s one of the real "engaged" VCs. He doesn't just write checks butworksvery closely with his companies to build complete businesses. He understandstechnology as well as any of his peers and takes real risks in building abusiness around innovations.

That’s our kind of VC.

In the past, Wei was involved with Ciena Corp. (Nasdaq: CIEN)and Advanced Fibre Communications Inc.(Nasdaq: AFCI), but so were a lot of people. (Aside: Is there a VC out therewho doesn’t claim the discovery of Ciena?) His most impressiveIPO was outside the networking business: NVDIA, a risingsemiconductor player with a $6.5 billion market cap.

What’s more important hereare the optical deals Wei’s working on now. These include Solinet Systems Inc.and Force10 NetworksInc., both in the Worldview portfolio. He’s on the boards of 3ParData, Cogent Communications Inc.,and Movaz Networks Inc., allcompanies with big ideas. Wei’s also said to have some key connections withAsia’s top carriers – and that’s where a lot of the optical networkingbusiness is going.

There are a lot of really sharp VCs (and some real shabby ones), so it washard to narrow the field. We were tempted to pick our own VC, Chris Schaepe of Lightspeed Venture Partners,just to stoke the message-board paranoia. Too obvious. We received an intriguing nomination for Charlie Kramlich and PeterMorris of New Enterprise Associates (NEA). Kramlich and Morris have an impressive optical portfolio, butword on the Street is that they place bets on every horse in therace. Too easy. They get a mention in the Close But No Chocolate Sprinkles section.

Message to Mr. Wei: We’re expecting big things, so it’s time to step it up anotch. Message to the spurned: Ditto. If Wei doesn’t land a couple monsterIPOs, the spot’s yours for the picking.

Ferri Talks Only to Anderson...

5414_ferri_notanderson.gifWait, what’s this? Two VCs from different firms? Yes. Ferri and camera-shy Anderson work for Matrix Partnersand North Bridge VenturePartners, respectively. But in the tightly knit circle of Boston-area communicationsstartups, they travel as a pair.

In fact, they have similar styles (stoicand tough, with a penchant for entrepreneurs with track records). It’s allpart of that clubby, Noreast thing. They’re likely to swing some clubs downat the Andover Country Club, then do a deal with a former Lucent Technologies Inc. (NYSE: LU) engineerover some chowdah. They’re both well connected to most of the topBoston-area startup legends, including Sycamore Networks Inc.'s (Nasdaq: SCMR) Desh Deshpande and formerWellfleet CEO Paul Severino. And they tend to be attached at the hip on thesame deals. Been doing this for years.

For example, Matrix and North Bridge were the two largest investors (after founder Deshpande and CEO Dan Smith) inSycamore Networks. Most oftheir deals start with talent coming out of the Massachusetts startuplegends Cascade Communications and Wellfleet, both of which were funded byMatrix and North Bridge. A more recent crop of communications companies theyhave in common includes Argon (acquired by Siemens AG [NYSE: SI; Frankfurt: SIE]), Arrowpoint (acquired byCisco Systems Inc. [Nasdaq: CSCO]), NetCore (sold to Tellabs Inc. [Nasdaq: TLAB; Frankfurt: BTLA]), Sycamore (IPO), Redstone (acquired bySiemens), Prominet (sold to Lucent) and Spring Tide (acquired by Lucent).

Last big hit: Sonus Networks Inc. (Nasdaq: SONS), the voice-over-IP switching specialist thatwent public in 2000 and whose stock has risen 269 percent from its IPOprice. Sycamore, a Matrix and North Bridge investment, was a giant hit atthe time of the IPO in 1999, but its stock is now down 20 percent from itsIPO price. Of course, Ferri and Matrix pocketed millions for themselves and their clients, selling most of their Sycamore shares when they were still in thetriple digits.

What’s going on now? Matrix and North Bridge have generated a small cottageindustry of optical startups. There’s Appian Communications, Équipe Communications Corp., and Tenor Networks Inc., all touchedby the Ferri/Anderson tag team. Recently, they’ve moved into more cutting-edge optics by funding PhotonEx Corp., a startup promising 40-Gbit/s DWDM systems bythe end of the year (see PhotonEx Set to Demo 40 Gig).

So why are Ferri and Anderson suddenly making the list? While many VCs havegone gun shy in these taxing times (see Vinod Khosla), Ferri and Andersonare still active, making more recent investments in such companies as PhotonEx, kSaria Corp. (North Bridge), and Onetta (Matrix). They’re extendingtheir optical portfolio into the next generation, when thetelecommunications market should be headed toward a recovery [knock wood here]. PhotonEx,staffed with a braintrust out of MIT’s Lincoln Labs (the breedingground of Sycamore’s talent), looks to be a leading future IPO candidate.They say their first product will be out by the end of the year. Onetta, ledby former Redback Networks Inc. (Nasdaq: RBAK) CEO Dennis Barsema, is targeting the amplifiermarket.

Is this a World Series team of optical companies, or will this just beanother Beantown disappointment? The West Coast VC world – most notablyKhosla – had a leg up in the last generation of networking IPOs withblockbusters such as Juniper Networks Inc. (Nasdaq: JNPR) and ONI Systems Inc. (Nasdaq: ONIS). Matrix and North Bridge will at leastmake it to the playoffs, but they haven’t yet developed a long-termchampionship dynasty. The next six months will likely tell whether theseguys have the staying power for the list.

Mad Hatter

Last time we reviewed Huber’s performance, his company, Corvis Corp. (Nasdaq: CORV), was basking – exultant, like – in the glow of one of the most successful IPOs of all time. When the smoke on the trading floor cleared Corvis had a mind-boggling market cap of $30 billion (yes, that’s billion).

It couldn’t last, of course. And it didn’t.

Since its IPO, Corvis’s stock has been spanked 'til its buttocks are numb. Or something. Its share price has dropped farther and faster than that of Ciena Corp. (Nasdaq: CIEN), Nortel Networks Corp. (NYSE/Toronto: NT), Sycamore Networks Inc. (Nasdaq: SCMR) – even Lucent Technologies Inc. (NYSE: LU).

Why did investors give Corvis’s share a harder whacking than that of its competitors? Mostly, it had to do with the way in which Huber pitched the company. Corvis basically commandeered the “all optical” message as its own – enveloping it with an air of mystery by never actually revealing how its products worked (see Corvis: Time to Come Clean?).

While the Bulls were running Nasdaq, investors ate this shtick up (All Optical – ooh! Mysterious – aah!). But as the market boomeranged, this ovine enthusiasm turned out to be Corvis’s worst problem (see Corvis Stock Tanks). Investors were suddenly leery of anything optical – let alone all optical. And they wanted companies with proven fundamentals – not a mystery play.

Today, Corvis’s market cap is a modest $2.6 billion – down more than 90 percent from its high. Still, that’s not bad, given that it has yet to announce any new customers. Its revenues are still derived exclusively from the same two service providers it gently encouraged to buy its products by issuing them large amounts of Corvis stock (see Corvis: No New Customers).

Given all these problems, “Why,” you may well ask, “has Huber only dropped one spot on the list, to the No. 6 position?”

Several reasons. The first is the stock itself. The price of CORV shares was way too high; now – hey presto! – it’s too low. As the market corrects, so will the share price – ending up somewhere between the two poles and providing a nice uptick for anyone with money left to go along for the ride.

Corvis’s numbers are starting to pick up, a fact noted by various Light Reading correspondents). And, equity incentives notwithstanding, its products also are getting expansive reviews – especially from Broadwing Communications Inc. (NYSE: BRW). Ironically, given his mantra, Huber has been quietly expanding Corvis’s product line beyond all-optical, all-the-time (Ommmm...), to encompass copper-core OEO equipment (see Corvis Offers Grooming Tips). A smart move, since that’s where the money is today.

There’s another reason for keeping Huber high on the list – Corvis is not his only play. Huber’s now wearing many hats via his work with a venture capital outfit called Optical Capital Group (see Huber Extends His Reach). The VC fund numbers among its investments Iolon Inc. (which makes optical switch components), Hyperchip Inc. (which is working on a so-called “petabit” router), and Yotta Yotta (an optical storage play) – all of which are generating strong word in the industry.

5414_alice.gifThe Comeback Kid

Kevin KalkhovenKevin Kalkhoven is the first to extricate himself from the dreaded Has-Been Bin and get a second term as a Mover and Shaker. (Noam Lotan take note: It can be done.)

Kalkhoven was binned after he quit his job as CEO of JDS Uniphase Inc. (Nasdaq: JDSU;Toronto: JDU) last May and disappeared into the sunset, talking aboutrestarting his motor-racing career and doing more flying, skiing, and scubadiving.

He ended doing all of those energetic-sounding things and taking another crack at beinga big gun. And although it’s way too early to say whether Kalkhoven isgoing to succeed, you've got to wonder at his pendulous spheroids.

Kalkhoven’s first crack at being a big gun proved astoundingly successful.He and his pals at Uniphase, a boring gas laser maker, recognized the needfor an independent manufacturer of optical components and set out on aworldwide acquisition binge to achieve that goal.

As we all now know, Kalkhoven succeeded in a very big way. He alsomanaged to engineer his departure from JDSU at a choice moment – afew months before everything optical started going sour (a developmentthat he says he also saw coming).

Now, Kalkhoven’s back on a positive track, saying that telecom accessnetworks are going to undergo a revolution in the next five years. And he’sputting his money where his mouth is, by founding and investing in startupsdeveloping technologies in this field (see Kalkhoven's Five-Year Plan).

So far, his investments include Blaze Network Products Inc. (which is already OEMing components to Cisco Systems Inc. (Nasdaq: CSCO) in an unannounced deal), Iolon Inc.,Innovance Networks, and WaveSplitter TechnologiesInc. Others are in the pipeline.

When Kalkhoven told Light Reading about his plans in April, he drew apretty skeptical response from users of this site. One of them noted thatJDSU is now having to "amputate" some of Kalhoven’s "mistakes" (see yea huh). Another charged Kalkhoven with indulging in "a big egoplay" that failed to recognize today’s totally different business climate(seedreaming away).

"I wish I’d kept my mouth shut now," Kalkhoven said recently (by chance,he phoned Light Reading as this was being written). Au contraire, we say.Let it all hang out.

Tunable Tuna

Milton ChangOn the face of it, things are going clang! for Chang right now.

New Focus Inc. (Nasdaq: NUFO), one of his companies, is getting kicked around in the public market. It just announced a big loss and is promising more of the same to come (like, thanks, Milt).

Curiously, NUFO has also been slapped with a suit alleging that it used a Jan. 30 press release to inflate its stock price (see New Focus Faces Stock Suit). Looking at its share value today it’s pretty obvious that the alleged helium has long since evaporated (see New Focus Dials Back).

Agility Communications Inc., another of Chang’s companies, faces the opposite problem: It can’t go public, owing to the arctic state of the public market. OMM Inc., another super hot investment of Chang’s, is in the same boat (see OMM).

These are serious snafus – but they are also short-term problems (relatively). Some day the sun will come out, the little birds will go “cheep-cheep-cheep,” and Nasdaq will crawl back up above, say, the 3500 mark. At that point, Chang’s decision to dive in early to tunable laser companies like New Focus and Agility is likely to look very prescient indeed.

Here’s why: Simply, tunable lasers are starting to look like they could be a vital ingredient in next-generation networks (see Tunable Lasers). They can be reconfigured on the fly to provide wavelengths wherever and whenever they’re needed – including switching traffic over the network core. Over time, as prices come down, they could even replace standard transmitters, simplifying network support by acting as one-size-fits-all spare parts.

In other words, tunable lasers could have a multibillion-dollar future. And Chang? He’s the big tuna of the tunable laser market.

Turnaround Time

Dan Smith2001 is turning into a crap year for Dan Smith.

It’s a far cry from 1999, when Smith and longtime cohort, Sycamore Networks Inc. (Nasdaq: SCMR) founderand chairman Desh Deshpande, launched one of that year’s – actually, thatdecade’s – most astounding IPOs. In contrast, Sycamore’s year thus far hasbrought a sales shortfall, layoffs, and a monster pileup of unusedinventory, all capped with horrendous second-quarter results (see Sycamore Drops a Bomb). This has prompted investors to take a chainsaw to Sycamore’s stockprice. Now, all that’s left of this once magnificent tree is an awkwardly prunedshrub. Can Sycamore sprout new growth?

The recent turmoil at Sycamore has raised the level of skepticism on WallStreet. One fund manager (and a large holder of Sycamore stock) recentlyremarked that several elements of the recent debacle reminded him of acertain quarter at Cascade Communications. That bad quarter blewout Cascade's stock price and eventually contributed to the decision to sell thecompany to Ascend Communications Inc.The price that Ascend paid for Cascade? $3.7 billion. Sycamore’s market capas of 5/29? $2.8 billion. Hmmm...

Smith and Deshpande have said they are steadfastly against sellingSycamore – and regret the sale of Cascade. They also have more control inSycamore, owning more shares in the company between the two of them than anyother single investor.

This sets the stage for Dan Smith’s career evolution: Can he develop thechops of a turnaround artist at a large public company? If not, he maycement a reputation as a CEO who has mastered the art of an IPO butstruggles with handling the difficulties facing large, maturing companies.

Smith stays on the list because he has a lot to prove and a record ofgetting particularly tenacious when the times require. His publicdeclarations indicate he’s committed to the turnaround. He also has thetools at his disposal. Sycamore still has a promising technology roadmap,technical talent, and a interesting software platform – and $800 million incash and short-term marketable securities in the bank. With loyalists on the board, it’s not likely Dan’sgoing anywhere soon.

Wanted: Green Thumb

Wu-Fu ChenAs any home-grower knows, getting those damn seeds to germinate is one thing; gettingthe little sprouts through the next few stages is quite another.

That sums up Wu-Fu Chen’s problem. He’s great at seeding startups. Infact, he’s seeded so many that he’s lost count of them all (there were 23last time we counted). But he’s yet to bring one to the point where itreally starts blooming.

In other words, he’s a skilled botanist: But can he garden?

Right now, he’s got a whole bunch of recently germinated startups in hisincubator, Acorn Campus.They include LuxNet, Audia Technology, Peak XV, Plato Design, PinePhotonics, Micro Pixels, Photonport, iCrossTrade, IntPax, WebQA, and OnChip,according to Acorn’s Website.

Then he’s got his older progeny out in the field. There’s Anda Networks, Cinta Corp., and Geyser Networks Inc.And there’s OptiMightCommunications Inc., Santera Systems Inc., and ZettaCom Inc..

None of them, however, has actually made it into the big time. Anda has come closest, filing for a $100 million IPO last August and thenquietly withdrawing just before Christmas (see Anda Networks Withdraws IPO Filing).

Others appear to be struggling along. Geyser’s “platform to maximizebandwidth efficiency in the metro space” is too much of a me-too product andhas suffered (mis)management problems (see Geyser Reduces Staff, Geyser: Third Time Lucky?, and Geyser Out of Steam). And Cinta has stayed in stealth mode for so longthat it’s raising suspicions (see Cinta's Strange Story).

Wu-Fu Chen’s prettiest plants are Optimight and Zettacom, which isn’t sayingmuch. Optimight has a Raman-less way of doing ultra-long haul (see OptiMight Details Long-Haul Box and Raman Risks Emerge ), and Zettacom is touting its next-gen switchingsilicon (see ZettaCom Advances With ZEST (& ZEN). Both of them, however, face heavyweightcompetition, and the jury’s still out on their technology.

The big question, really, isn’t which Wu-Fu Chen startup will blossom first; it’s which will be the first to wither on the vine.

Wait 'til next year?

Vinod KhoslaOh, Vinod! What have you done for us lately? (Other than chew us out for our coverage of BroadBand Office Inc.)

Well, sadly, you were recently on the covers of Forbes and Red Herring (disclosure: several of Light Reading’s editors used to work at Ded Herring) — more than an entire year after you debuted as number one on Light Reading’s Top Ten Movers and Shakers. Is this akin to the Sports Illustrated jinx? The slow uptake in the mainstream press may be a sign that the Vinodian Era is winding down.

Times have changed, and 2001 does not look nearly as Khosla-friendly. Just as the market has shifted, so have your fortunes.

In 2000, you scored huge IPOs for ONI Systems Inc. (Nasdaq: ONIS)and Corvis Corp. (Nasdaq: CORV). Juniper Networks Inc. (Nasdaq: JNPR), another one of your companies that had its IPO in 1999, continued its ascent in the high-speed router market. But we don’t see much follow-up in 2001.

Your portfolio appears to have sprung some leaks. Redback Networks Inc. (Nasdaq: RBAK), where you sit on the board, completed its acquisition of Siara, another one of your deals, but that merger has ended up shooting holes in Redback’s earnings statements, and the merged entity is now struggling.

Then there’s the once-mighty Corvis, now a single-digit midget. The company now has more than 1,200 employees but only three customers — only two of which have actually paid it any money. If this were 1992, Corvis would be one of the optical market’s most interesting private companies. Instead, its premature IPO makes it an unprofitable public money pit that’s frantically trying to rationalize its existence to shareholders.

Well, it doesn’t matter anymore, because late last year you quietly withdrew from the Corvis board. ONI Systems, on which you still have a board seat, looks to be firing on all cylinders, but they don’t seem eager to share the wealth with any of the other companies in your portfolio. Meanwhile, Broadband Office met a grim death and has been shuttered, and Zaffire Inc. is fading into the undergrowth.

But here’s the real clincher: You’ve gone on sabbatical!

That leaves us wondering: What’s left in the basket for the next generation of Kleiner Perkins Caufield & Byers optical companies?

The leftovers: Cenix Inc.? Iolon Inc.? One of these might make a tasty treat for another player — but it's hard to imagine another gargantuan Corvis-like IPO. True, we’ve put Iolon on our Top Ten Private Companies list. But that means you’ve got only one hot iron in the fire — whereas last year you had several.

Meanwhile, other VC players — such as Accel Partners, Bessemer Venture Partners, Lightspeed Venture Partners (disclosure: LightSpeed is an investor in Light Reading), Matrix Partners, North Bridge Venture Partners, Morgenthaler Ventures, and WorldView Technology Partners — are still active in the optical field and are now bridging the gap into related areas, such as storage area networks (SANs), while you’ve split town. Your answer to the changing winds of the market? Repeating your oft-stated prediction of a brutal shakeout in the optical market in which most companies will fail. Thanks!

We can’t blame you for wanting to take a breather (it must be hard to spend all that money). But given your decision to scarper off during the tough times, we’re forced to place you in the Bin.

5414_bross.jpgIf the optical networking IPO in 2000 was the equivalent of the 1980s’ A Flock of Seagulls, Matt Bross was the industry’s Mike Score.

Stay with us here.

He led the party, pioneering such nifty hits as the “we’ll prop up your IPO if you can prop up our quarter” equity-for-customer-contract deal. Neato!

Only problem was, the funny money deals that were cut between carriers such as Williams Communications Group (NYSE: WCG) – where Bross works – and equipment providers such as Corvis Corp. (Nasdaq: CORV) and ONI Systems Inc. (Nasdaq: ONIS, set a dangerous trend. Others equipment providers followed suit in granting shares of their company to customers, including Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7) and CoSine Communications Inc. (Nasdaq: COSN). These deals have lost their allure now that the share prices of all these companies have fallen out of the stratosphere.

As the shares started collapsing, carriers such as Broadwing Communications Inc. (NYSE: BRW) and Williams started dumping their telecom equipment gear holdings – but not before their value had crashed worse than a crack-addled concertgoer.

In short, the whole thing turned into a sort of technology pyramid scheme: Witness the current share price of CoSine Communications, which was the last and most extreme case of the equity-for-customer-contract players. CoSine had the audacity to “incent” four out of five of its customers with pre-IPO shares. Now it’s got a $257 million market cap to show for it.

The go-go days of the year 2000 are now long gone. Who wants to trade pre-IPO equity now? It’s got about as much value as the single “I Ran.”

By most accounts, Bross is a smart guy. And he played a canny game along the way – just look at those ONI Systems Inc. (Nasdaq: ONIS) shares in his bank account (see Williams' CTO Profits From His Position ). But the party’s over; and now that investors have rumbled his game, it will be hard for him to make it back onto the list of Movers and Shakers.

5414_score.gifNo Noam

Noam LotanIf, like the amplifier in the movie Spinal Tap, the Light Reading Top Ten list went up to eleven, then Noam Lotan would still be on it. But, it doesn’t. Hence Lotan’s first trip to the Bin after three consecutive Top Ten listings.

It wouldn’t take much for Noam to make it back onto the list, however. In theory, MRV Communications Inc. (Nasdaq: MRVC) has invested in so many companies that only a few have to pay off for MRVC’s shareholders to see a return on their investment – a point made with endearing doggedness by this correspondent:

Re: Where were MRV shares trading at that time?

Not everyone agrees, however:

The Yahoo's hypsters rule LR board!!!!

Where’s Waldo?

Rich McGinnIn our last Top Ten list, we predicted that Dick McGinn would be fired. (See Rich McGinn).

And then, lo and behold, he was. Not to say, “we told you so” – but we told you so.

The story didn’t stop there. Since Lucent Technologies Inc. (NYSE: LU) canned McGinn, revelations about what a gawdawful job he did have continued to trickle out. There was his investment in a direct competitor, for example (see McGinn Backed Lucent Competitor). Not to mention the fact that he allegedly spent $40 million of Lucent’s money on an exclusive golf club in New Jersey (the idea of spending $40 million on anything in New Jersey certainly sounds like Dick to us).

The question of the hour is: What’s Rich up to now?

We’ve put out a Light Reading APB, but so far no confirmed sightings. (See Where Are They Now?)

5414_waldo.gifWeeks in, Weeks out

Wendell WeeksA short and not particularly illustrious stay on the Top Ten list for Weeks, before being bumped by more active players.

We still think he would have kept us out of World War II.

5414_wilkie.gif Permanent Resident Alien

Peter LothbergWe think this email from Donell Short, assistant editor at Broadband Publishing, sums Peter’s current position up succinctly:

The caption for Lothberg's picture in the has been bin should have read "Slothberg", but then again you probably thought of that and concluded –
"Nah, too easy."

[Note to Donell: Good one. "Too easy" is not in our vocabulary. Call us when you want a real job.]

Actually, we're beginning to think that Lothberg is our kinda guy after all, following recent email exchanges.

In one message, Lothberg told us that his wife, Ulla, has had a CiscoGSR12008 in her living room in Stockholm since 1998. She's now looking toupgrade it to a GSR12406 "so she can terminate OC192s." Yumpin' Yuniper!

When asked whether he was working on Cisco's HFR (Huge Fast Router)project, Lothberg replied: "I'm not on anything. I'm just someone who istrying to continue to scale our network while being bombarded by ATM peoplethat have changed the name to MPLS, but are still trying to sell the samelemonade."

The volume of messages that came in after our last list was published prompted Light Reading to develop a new scale for measuring the tone of the email in our inbox.

We call it Saunders’ Light Reading PE Ratio (SLuRPER, for short) – although in the present case “PE” stands for “paranoia/expletive” rather than “price/earnings.”

Basically, we’ve set up a filter to measure the number of expletives and paranoid usages in our incoming mail (see chart).

5414_slurpee.gifFor some fairly obvious reasons, we’ve found that the PE ratio of the messages increases, roughly, in inverse proportion to the level of the Nasdaq (note the big spike in October, when we launched the last list).

When everyone was making money the SLuRPER was down. Consonant with the sunny national mood, correspondents tended to view Light Reading editors as merry pranksters, naughty monkeys, etc. But as the Nasdaq tanked, so the PE ratio climbed, as reflected in our Web director's daily log, pardon the expression:

March 7th:

Market down 100 points. Lucent warns.

PE ratio: three “bastards,” one “wanker” (UK address), and someone questioning Peter Heywood’s parenthood

Of course, our correspondents' writing styles vary widely, from the pithy Noel-Cowardesque:

“Fuck you assholes.”

To the erudite Shavian:

“Why are you biased idots [sic] reporting information that is untrue? I am disgusted with your editorials and misrepresention [sic] of facts. Why are you mother f#$kers bashing Lucent. What kind of 3rd grade education did your staff receive? Your crap ladened [sic] site is despicable.”

Pretty sic, eh?

[Note: The above correspondent was upset about our prediction on August 16, 2000, that Lucent CEO Rich McGinn would be fired (see: Rich McGinn). On October 21st, McGinn was fired (see McGinn: McGone).]

This “upper case” message also amused us; one of several that we have received from the reader we like to call “Shouting Man”:

“WHEN ARE GOING TO STOP YOUR LIES ABOUT JDSU....I'M PRINTING YOUR ARTICLE AND IF AT 11.AM NO BAD NEWS COME OUT .....I WILL SUE YOU FOR DIFAMATION...”

DIFAMATION is probably a serious charge. It sounds serious. WE'VE ALERTED OUR LOYERS.

* * * * *

We hate to leave the matter on such a contentious note, so herewith, a recent, complete, unedited epistle from a satisfied – we think – customer:

it may if you smaller sales as need be!

couldn't have better it ourself!

For every Top-Tenner that makes the cut there are at least another twenty that were snipped. Honorable mentions this time ’round go to:

Mark Cree, General Manager, Storage Router Business Unit, Cisco Systems

Cree didn’t make the Top Ten this time, but he‘s one to watch. His handling of his new job – basically, to lead Cisco’s charge into the IP-based storage networking market – is absolutely critical to the company’s chances of resuscitating its fortunes.

This is do or die stuff. Storage networking is to Cisco Systems Inc. (Nasdaq: CSCO) what Peru was to Spain in 1530: a golden opportunity. And Cree is basically Cisco’s Francisco Pizarro, though perhaps a bit less bloodthirsty (see Cisco’s Secret SAN Strategies Revealed).

5414_pizarro_cree.jpgBut why is Cisco’s storage networking grand poobah being considered for a spot on a list of the Top Ten Movers and Shakers in optical networking?

Because the future of storage networking is optical (this also explains why Light Reading is launching a new publication on June 15, focused exclusively on this area: Byte and Switch. You can subscribe to the Byte and Switch newsletter by clicking here).

End of shameless self-promotion.

Note that Cree bears more than a passing resemblance to Cisco’s Carl Russo (the new No. 1 Mover and Shaker) – something that should do Cree’s prospects no harm at all within the Cisco hierarchy.

Both came to Cisco as the result of an acquisition (Russo came from Cerent. Cree, from NuSpeed Internet Systems, a storage networking company purchased by Cisco in July for $450 million – see Cisco to Acquire NuSpeed Internet). Both are smart. Both, spiffy dressers. And, most importantly of all, both sport trademark moustaches.

[Note: In an attempt to emulate Russo and Cree’s financial successes some members of the Light Reading staff have taken to growing “lucky” moustaches – a move known as Going Russo. (Viz: “Did you see Scott’s moustache? He’s gone completely Russo.”) See about us.

The similarities are so striking, in fact, as to have prompted speculation in some quarters that Cisco actually cloned Cree from Russo – Dolly style – or even that Russo and Cree are actually the same person! [Cue theme from Dragnet.]

5414_cree_russo.gifJerry Parrick, CEO and Founder, Yipes Communications Inc.. We considered Jerry – but mainly because he named his company after the sort of thing Shaggy used to say on Scooby Doo.

Close, then, but no Scooby snack.

5414_parrick_shaggy.gif We were also tempted to include Larry Roberts (see Dr. Lawrence Roberts) – primarily because it would have annoyed so many people. But we hate to annoy people.

Other names that were considered and then discarded (brutally) include: Intel’s Mike Ricci (no relation to Christina), and The Photonics Fund’s Catherine Lego (no relation to the Danish children’s toy).

Then there’s Henry Hung, President and CEO of Micro Photonix Integration Corp. (MPI), because… Well, we just like the name.

Lost, stolen, or strayed

David St. Hubbins, Nigel Tufnel, and Derek Smalls aren’t the only ones now residing in a “Where Are They Now?” file.

In fact, it’s one of the remarkable things about the optical networking industry that some of its most famous faces can be here one day, gone the same day.

It’s as if they’ve accidentally leaned on the secret handle over the mantelpiece and suddenly vanished – eek! – through the revolving panel into the secret passageway [ed. note: get on with it!].

Okay. Here, then, we present a list of former A-list players who have gone... no one knows where.

Rich McGinn

Is it possible for McGinn to get another job in networking? Don’t bet against it. He’s hotly tipped to become a VC. We want to know where.

Joe Furgerson

Joe was formerly vice president of marketing at Juniper Networks Inc. (Nasdaq: JNPR), and saw the company through from its formative days as a startup (when people kept calling it Jupiter), through its IPO, to infinity and beyond. Then, one day, he just disappeared.

Enquiries as to his whereabouts are met by Juniper with a shrug, a wink, or a wry smile and a shake of the head. Rumor has it he was ousted (gasp!) following an outside audit by a New York image consultancy (which seems churlish if so), but no one knows for sure [cue theme from Twilight Zone].

It’s a mystery: one that we want to unravel.

Bob Barron

He was the president of Lucent Technologies Inc.'s (NYSE: LU) now-defunct Metropolitan Optical Networking division. Now, not. (See Lucent Metro Boss Leaves.)

He never calls... he never writes...

* * * * *

If you have information on the whereabouts of any of these individuals, contact us at [email protected]. Solid leads will be rewarded with a Light Reading limited edition T-shirt.

Alternatively, if you know someone who you think should be listed on this page, let us know. Heck, it’s cheaper than putting their photo on a milk carton.

5414_grave.jpg

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