Calient Touts Government Test
A big deal? Not in the short term.
To review, Calient was founded in March 1999 and has raised $256 million in venture funding to date. Its DiamondWave 256 switch, which occupies about three quarters of a seven-foot telco rack, boasts the ability to switch the bandwidth from any of the 256 fibers entering the switch to any of the 256 fibers leaving the switch.
Though optical switch startups were once a dime a dozen, the recession has killed off many of Calient's would-be competitors, leaving it to duke it out with the likes of Corvis Corp. (Nasdaq: CORV), Ciena Corp. (Nasdaq: CIEN), and Tellium Inc. (Nasdaq: TELM). Calient counts KDDI Corp., Japan Telecom Co. Ltd., and two other carriers as customers. The company plans to announce its fifth customer, a U.S. carrier, next week.
The lab that will test Calient's switch is the Joint Interoperability Test Command (JITC) laboratory, a government-owned facility run by the U.S. Defense Information Systems Agency (DISA). The JITC's job, among other things, is to make sure new technologies, such as optical switches, interoperate with the Defense Department's communication systems.
Calient is proud of the upcoming tests, claiming to have the first optical switch to be given the once-over by the JITC. "We've been told that Corvis is in the pipeline behind us," boasts Calient president and CEO Charles Corbalis.
But the testing event itself doesn't really mean anything in the short term. As Calient explains it, there are three ways to get certified by the JITC: The government can request the tests and pay for them; the vendor can request the tests and foot the bill; or both parties can sign a Cooperative Research and Development Agreement (CRADA) and share the expense.
In Calient's case, a CRADA was signed. So Calient must install a DiamondWave 256 switch (its largest capacity switch) in a government lab. It also must loan the government a DiamondWave 128 switch (the one meant for ILEC regional and metro core networks) for six months and pay the government $60,000.
The Defense Department, in the next few weeks, is expected to release a new request for proposal (RFP) for its Global Information Grid Bandwidth Expansion (GIG-BE), a $500 million project that will increase bandwidth and communications to key military U.S. installations around the world. The trade journal Government Computer News describes Global Information Grid as the Defense Department's "centerpiece: a network of networks that will connect everything from sensors and satellites to deployed soldiers, sailors and Marines." Calient's hope is that this JITC CRADA will put it in a cherry spot when the government begins evaluating RFP responses for GIG-BE.
"This [interoperability testing with JITC] is certainly one of the steps that needs to be done to qualify the product for [consideration in GIG-BE]," says Corbalis. "Obviously, the RFP hasn't come out yet, so we'll be responding to it with all the other players."
To be clear, Calient won't be getting any revenue from these tests it is announcing, nor is it at all saying that the Defense Department will consider its switch for GIG-BE. The four-week JITC certification might score Calient some political points, but it will still have to prove itself more worthy than its competitors, including Corvis.
"We know we'll give Corvis a good run for their money in the GIG-BE Network," says Corbalis.
"Of course Corvis is focused on government opportunities," says Andrew Backman, VP of investor relations at Corvis. "And while other companies are focused on delivering a box, Corvis is focused on providing an end-to-end, all-optical solution."
— Phil Harvey, Senior Editor, Light Reading