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Cyan Seeks Funding in SDN Squeeze

Dan O'Shea
11/7/2014
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Cyan has gotten a lot of credit for being an early mover in the SDN market, but the company is still waiting for its big SDN payday. It's looking more and more like that payday won't come until next year, so the vendor is seeking financing and cutting costs.

Cyan Inc. officials alluded to both efforts during the company's third-quarter earnings call Thursday. CFO Jeff Ross said the firm is looking at a number of options for raising the sum -- "between $5 million and $10 million" -- that it needs to run its business, while also working on cutting 12% to 15% from its quarterly expense run rate of about $21.5 million.

Company officials said little else on the call about the efforts, and declined to describe the nature of Cyan's financing options when contacted by Light Reading. Analysts have speculated that the additional funding would likely be in the form of debt financing. In an email to Light Reading, a company spokeswoman said the cost reduction efforts included a small headcount reduction.

Cyan saw a sequential revenue uptick in the third quarter, to $26.6 million, but it was still down from $37.7 million for the same quarter last year.

The fourth quarter is not looking good either, as Cyan acknowledged it is being affected by some of the same carrier capex doldrums as several other vendors. Ross said fourth-quarter revenue is expected to be in the range of $24 million to $26 million. (See Cyan Q3 Revenue Falls Year Over Year.)

Cyan CEO Mark Floyd said on the call, "We really thought decisions were going to be made in the back half of 2014. Now it looks like it's the first half of 2015. It is taking a little bit more time [for carriers] to make those decisions." Floyd added that part of the long buildup has to do with the fact that some carriers tried to develop SDN projects internally before deciding to seek help.


Want to know more about SDN? Check out our dedicated SDN content channel here on Light Reading.


Still, Cyan's products continue to be increasingly popular in service provider trials. The company now has 15 trials ongoing, including six evaluations at Tier 1 carriers. It also recently announced the capability for its Blue Planet software to orchestrate routers from Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (NYSE: JNPR). But it needs some of those evaluations and other positive news to start converting into cash. (See Cisco, Juniper Land on Cyan's Blue Planet.)

Floyd -- echoing a tone many vendors have taken, in anticipation that softer spending in the second half of this year will give way to brighter days ahead -- said, "I'm bullish about 2015."

— Dan O'Shea, Managing Editor, Light Reading

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brooks7
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brooks7,
User Rank: Light Sabre
11/12/2014 | 10:51:02 AM
Re: RIP Cyan
My review...http://wp.me/p3XVhG-au

Dan you have a mistake in the article.  The amount of the raise is unspecified on the call.  The answer that came to $5M - $10M was about the amount of working capital required for the firm.

seven

 
DOShea
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DOShea,
User Rank: Blogger
11/10/2014 | 4:33:19 PM
Re: RIP Cyan
I don't know if I'd say just yet that Cyan is doomed--there are a lot of ways to get the money they need, including an investment from another company. Wouldn't be surprised if one or two mega-vendors have been watching Blue Planet's progress and thinking the same thing.
TomNolle
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TomNolle,
User Rank: Light Sabre
11/10/2014 | 1:16:29 PM
Re: RIP Cyan
Joe, I'd be happy to review a presentation deck from you guys.  If you make a major strategic announcement I'd also take a briefing (30 minutes is my max).  I have seen your stuff and talked so some of your people, and I told one of them my concerns--which I stated here.
joe.cumello
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joe.cumello,
User Rank: Lightning
11/10/2014 | 12:57:15 PM
Re: RIP Cyan

Tom, since I've been at Cyan, we've never done a briefing with you, you've never seen our technology live, nor -- as far as I know -- are you involved in any of the 15 SDN/NFV trials with operators in which we're engaged. Since this is the case, we'd like to formally invite you to a one-hour briefing on our technology. Any time this week works for us. 

What do you think? We're looking forward to it. My e-mail is [email protected] 

Joe Cumello, CMO

TomNolle
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0%
TomNolle,
User Rank: Light Sabre
11/10/2014 | 11:22:56 AM
Re: RIP Cyan
Cyan is a demonstration of the difference between working with NFV or SDN, and making NFV or SDN work.  The operators are expecting a business case that's largely driven by major gains in service agility and operations efficiency, and Cyan and others are still taking too narrow a view of what management and orchestration is and does.  As a result, they don't do enough to be compelling.
sowen557
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50%
sowen557,
User Rank: Light Sabre
11/10/2014 | 11:14:21 AM
RIP Cyan
They do have a lovely management tool BluePlanet but sad to see them die.
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