MRV Gets Another Margalit

Near Margalit, the Zaffire founder who was most recently chief technology officer at Centerpoint Broadband Technologies Inc., has gone back to his roots at MRV Communications Inc. (Nasdaq: MRVC), taking the job of VP of marketing and business development, the company confirmed on Wednesday.

Margalit's father, Shlomo Margalit, is MRV's chairman and founder. MRV started as holding company for several networking and components startups it invested in, as well as a few homegrown, wholly-owned subsidiaries. Zaffire, which was later bought by Centerpoint, was among those startups funded by MRV (see Centerpoint Scoops Up Zaffire).

Now, apparently, Margalit (the Lesser) is part of big changes underway at MRV. The company is in the process of moving away from the incubator and investment model to become an operating company focused on a couple of key networking and components markets. It also wants to make the company, which is public, easier for investors to understand.

"MRV is a company I know really well and, though they have gone through a pretty severe downturn, they have some products that I think are going to grow in the future," says Margalit.

MRV's wholly owned or majority owned divisions include Luminent Inc., which sells singlemode active and passive components; Optical Access Inc., which makes fixed wireless gear; CES Communications Ltd. (see 50 Worst Company Names), which makes 3G networking equipment for wireless operators; iTouch Communications Inc., which makes remote network management products; and NBase-Xyplex, which makes access switches and CWDM boxes.

The company also owns pieces of several startups, including All Optical Networks Inc. (AON), BHI, Charlotte’s Web Networks Ltd., Cimi, Optical Crossing Inc., Phone Do Networks (see 50 Worst Company Names), Red C Optical Networks, and Zuma Networks Inc. Since earlier this year, MRV's managers have been in the process of changing MRV from a holding company with several separately run divisions to a centralized company with five product groups. The product groups are: active and passive components; network infrastructure; switches and routers; remote device management; and services and other.

Margalit says to make things even simpler, the company will rebrand its Ethernet-based access networking gear as "MRV" and all components as "Luminent."

Though the restructuring is far from over, analysts are bullish on MRV's ability to operate more efficiently. "We believe that a successful consolidation and leveraging of the sales, marketing and distribution efforts remains a key component to MRV's future," writes CIBC World Markets analyst Shaul Eyal, in a May 2 note to clients.

Young Margalit says the new plan will also make MRV a more accountable company at every level, something that's sure to please investors (see MRV: Wait 'Til Next Year...). "It clearly hasn't been a company that's very easy to understand," he says. "But we're working on that."

At the upcoming Supercomm trade show, MRV plans to display its entire basket of networking products. One portfolio member, Charlotte's Networks, is also planning a "major announcement," according to an MRV spokesperson.

— Phil Harvey, Senior Editor, Light Reading
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