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Optical/IP

2004 Leading Lights: Where Are They Now?

Tonight, Light Reading will present the second annual Leading Lights Awards, doling out very cool glass statue-thingies to 11 distinguished winners.

This year's finalists can be found here: Leading Lights Finalists. The names of the winners, after being revealed at our invitation-only dinner, will be released to the public Thursday morning.

Before we hand out this year's gongs, let's jump back 12 months to remind ourselves who picked up last year's accolades, and ask the critical question: Is a Leading Lights Award the leading indicator of future riches? Or does it come gift-wrapped with the telecoms equivalent of the Sports Illustrated cover curse?

So let's stroll through 2004's lucky winners and see how the past year has treated them:

  • Industry Statesman, Public Company: The winner in 2004 was Scott Kriens, CEO, Juniper Networks.

    Kriens is still a prolific speaker and his company still has street-cred in the carrier-class routing market. But (Nasdaq: JNPR) had something of a rocky year trying to integrate all those shotgun-style acquisitions with many executive comings and goings. (See Juniper to Acquire Kagoor, Juniper Takes Two: Peribit & Redline, Peribit Deal: More to Come, Juniper Gets Into $122M Funk, VP Jumps From Juniper, and Kittu Keeps the Kitty.)

    The company seems to have adopted a curious marketing and PR approach that allows it to say things like: "Juniper doesn't have an acquisition strategy." (See Juniper's Secret.)

    Bottom line? If Kriens wants to keep his golden rep in place, he'd better work on his marketing and his share price. Speaking of which...

  • Best Investment Potential, Public Company: Ah yes, Juniper Networks again!

    This chart says it all:

    We had our reasons to be optimistic. Juniper gained 44 percent in 2004, compared with a 20 percent loss for (Nasdaq: CSCO) shares. But this year? Zzzzz.

  • Best New Product, Public Company: Cisco's CRS-1.

    You can't underestimate how important this product was to Cisco. Even though the CRS-1's financial impact has been hard to determine, it's been successful on the marketing front, establishing that Cisco can at least keep up with -- and maybe even edge ahead of -- its rivals in the core. (See Cisco, Nortel Score Comcast Wins, China Telecom Selects Cisco, Cisco's CRS-1 Charms C&W, and Cisco's CRS-1 Gets Edgy.)

  • Best New Service, Public Company: Vodafone's 3G Service won last year.

    OK, so we were excited about 3G, and Vodafone Group plc's (NYSE: VOD) relatively high-speed mobile data service seemed to work, so the award was earned and deserved. But things have moved on, and the acronyms are getting longer -- HSDPA, anyone? (See Voodoo Cranks Up 3G.)

  • Best Marketing, Public Company: Motorola took the honors in 2004.

    Motorola Inc. (NYSE: MOT) has always been out there as a mobility powerhouse, but this year the company stepped up and began aggressively marketing its telecom infrastructure capabilities. It has since quickly made a name for itself with some high-profile wins with major carriers. (See Moto Gets a Piece of Verizon FTTP.)

    And the company's work around the Advanced Telecom Computing Architecture, or AdvancedTCA , has yielded more than 50 customer seminars, more than 15 conference and Webinar presentations, and a whole pile of press releases and white papers all hammering home the company's early market leadership in this very important area of the telecom equipment market. (See ATCA Needs Platform Thinking and ATCA Starts to Rumble.)

  • Best M&A Strategy, Public Company: Alcatel.

    It looks like Alcatel's (NYSE: ALA; Paris: CGEP:PA) acquisition of TiMetra in 2003 was perhaps one of the most successful networking acquisitions ever. Alcatel now has a real edge in new services deployments, particularly for IPTV; Cisco even alluded to the product's success as one reason for the acquisition of Scientific-Atlanta Inc. (NYSE: SFA). (See Alcatel & TiMetra Seal the Deal, Routers Answer IPTV Call, Alcatel Router Revenues Surge, and Sci-Atlanta: Cisco's IPTV Lifeline?.)

    So, top marks in the IP router market. But not every acquisition is smelling of roses yet. The strategy behind the Spatial Wireless softswitch acquisition looked solid, but there are signs that all's not well in the field. (See Tekelec Takes a Hit on Cingular.)

    Still, the vendor's ebullient CEO Serge Tchuruk is talking up Spatial as a 2006 go-getter, so we'll keep an eye on how that turns out. (See Alcatel Serges on Triple Play .)

  • Industry Statesman, Private Company: Jeffrey Citron, CEO, Vonage

    Well, Citron's still loud, ubiquitous, and talking up Vonage Holdings Corp.'s success and prospects to anyone or anything that will sit still long enough to listen. But there's still no sign of an IPO or mind-boggling acquisition, and with the major carriers and online world's big hitters muscling in on the IP telephony market, time's running out... (See Vonage Hearing Buy-Out Bids.)

  • Top M&A or IPO Candidate, Private Company: BigBand Networks took the award last year.

    BigBand Networks Inc. also appears as a finalist this year, in the one category you don't really want to repeat. The company didn't implode or anything, but frankly, we expected bigger things. Like an IPO. Or an acquisition.

  • Best New Product, Private Company: Acopia's Adaptive Resource Switch (ARX) From what we've heard, Acopia's doing well, and has even sold some stuff to big wigs such as Yahoo Inc. (Nasdaq: YHOO). In the past year, it updated the ARX, pumped out a "baby brother" version, and expanded its reach to Europe. File under "Good Call." (See Acopia Unveils New ARX Products, Acopia Goes Remote, and Acopia Goes to Europe .)

  • Best New Service, Private Company: Skype Technologies' Skype 1.0 got the judges's nod in 2004.

    EBay. Billions of dollars. 'Nuff said. (See EBay Buys Skype for $2.6B.)

  • Best Marketing, Private Company: Atrica won in 2004.

    Yeah, Atrica Inc. is all about carrier-class Ethernet, and that's good stuff. Repeated wins with (NYSE: FTE), not bad. (See FT Heralds Ethernet Breakthrough.)

    But everybody seems to be talking carrier-class Ethernet nowadays -- Cisco in particular -- and there's also the potential for Ethernet-centric multiservice provisioning platforms (MSPPs) to become a competitor. (See Carrier Ethernet Makes Its Move, MEF Rubber Stamps Ethernet Gear, and Ethernet Stalks the MSPP.) At least Atrica got its message out while the getting was good, but whether it can maintain the same sort of marketing momentum without fast-talking evangelist Nan Chen remains to be seen. (See Chen's Outta Atrica.)

    — The Staff, Light Reading




  • For more information on the Leading Lights Awards, click here.

  • For more information on The Light Reading Telecom Investment Conference, click here.

  • matahari 12/5/2012 | 2:49:47 AM
    re: 2004 Leading Lights: Where Are They Now? The T-series is definitely not a repackaged
    M-series. Different ASICS, higher forwarding
    and fabric bandwidth, no more reordering ;-)

    However, rereading dwdm's post, he was making
    the point that Juniper has been lacking
    innovation lately. The T-series was
    introduced over 2 years ago and all that has
    come out since were repackaged M-series, J-series
    (essentially PCs running JUNOS), and service
    PICs which do not scale well and have
    questionable quality.

    The company is working on a metro ethernet
    switch, but its been delayed by at least 6-9
    months due to lack of expertise and talent,
    not only in engineering but also in their
    product definition groups; unlike the earlier
    days of Juniper when there were a lot of
    talent working on multiple products at the same
    time. If there is one area that has improved,
    it is definitely in marketing and PR. The
    company no longer waits for actual deployments
    before product announcements and product specs
    are now on the 'optimistic' end.
    ragho 12/5/2012 | 2:50:01 AM
    re: 2004 Leading Lights: Where Are They Now? Re 4x growth. CSCO grew revenues about 9.7% in their October quarter versus about 38% as I recall in the September quarter at JNPR. 4x9.7=38.8.

    You need to get your facts straight :-). According to the 10-Qs filed:

    Quarter ending 30-Jun-05: $493,028K
    Quarter ending 30-Sep-05: $546,353K

    That computes to 10.8% QoQ growth for JNPR. Not bad, definitely not 40%.

    I agreed with you earlier for YoY growth, which is close to the 40% you cite.
    tsat 12/5/2012 | 2:50:02 AM
    re: 2004 Leading Lights: Where Are They Now? "Just repackaged the M-series"??

    C'mon... The T-series is not a repackaged M-series. It put Juniper about 2.5 years ahead of Cisco's core technology.
    lucifer 12/5/2012 | 2:50:03 AM
    re: 2004 Leading Lights: Where Are They Now? Yes, I have heard the same thing from friends at Chiaro, now looking for work. Word is that ECI pushed for winding down the business

    So far nothing on the PR/AR front.

    Lucifer
    materialgirl 12/5/2012 | 2:50:03 AM
    re: 2004 Leading Lights: Where Are They Now? Dear Russ,
    Your math is correct. So is your outlook. However, it remains that 40% is sector-leading growth. The Street expects CSCO to crush JNPR any quarter, just like the expect INTC to crush AMD.

    In other words, LR cannot be faulted for picking JNPR, IMHO. The company has indeed performed better than the stock price, and better than any other router vendor. If JNPR penetrates the enterprise space, as I suspect they well for the reason stated, their stock will some day change, just as AMD is changing today. That Wall St. timing is not LR's fault.
    blueshoes 12/5/2012 | 2:50:08 AM
    re: 2004 Leading Lights: Where Are They Now? they've had some wins - Turk Telecom and Limelight recently I think. Limelight should be good for them.
    zher 12/5/2012 | 2:50:09 AM
    re: 2004 Leading Lights: Where Are They Now? have not heard anything about Avici for long time.
    null0 12/5/2012 | 2:50:09 AM
    re: 2004 Leading Lights: Where Are They Now? What happened to release v6.x ?

    When Wellfleet developed the BackBone series of routers they also developed a new operating system and software architecture. They skipped v6.x numbering to place emphasis on the level of change. v5.x software was based on Vrtx32 OS while v7.x (GAME) was developed in house.

    There was also the move from a telnet/vt100 based config to a windows/unix based GUI where confiuration changes were made via SNMP (sitemanager) made at the same time.

    Oh such sweet memories.

    russ4br 12/5/2012 | 2:50:16 AM
    re: 2004 Leading Lights: Where Are They Now? Re 4x growth. CSCO grew revenues about 9.7% in their October quarter versus about 38% as I recall in the September quarter at JNPR. 4x9.7=38.8.

    Juniper growth was already built-in in the share price.

    Take a look at JNPR vs. AAPL ...

    JNPR grew 45% revenue y/y, and now has a P/E of 41, for a share price performance of -20% y/y.

    AAPL grew 56% revenue y/y, and now has a P/E of 46 (similar story to Juniper's). However, the share price is up 150%.

    The market had already included the ~40% y/y growth for Juniper in the share price. Actually, for Juniper to grow anything less than that, the share price will drop right away.

    -russ

    DocGonzo 12/5/2012 | 2:50:19 AM
    re: 2004 Leading Lights: Where Are They Now? "It wasn't IGP/BGP that got Cisco where they are. It wasn't technology at all. (although certainly a bigger feature list helped a lot, BGP/IGP was not it) And the BFR became the failed Versalar which was on the list already mentioned."

    As I recall, technology had a lot to do with it. Cisco actually became the defacto internet core router because their engineering teams were engaged with the ISP's. The massive sales and marketing campaign came later. Then as today, functional and full-featured (at the time) releases of BGP and IS-IS (OSPF later), were required or your router was never really considered. As the feature set has grown so has the height of the entry bar.

    Wellfleet/Bay made some headway, but as others have pointed out their software was their undoing. Ascend bought Netstar and made a lot of progress with some key ISP's, but also fell short with their GRF. Of the others listed, only Avici and perhaps Procket had any measurable success in getting out of the lab and into the core.

    Doc
    fgoldstein 12/5/2012 | 2:50:19 AM
    re: 2004 Leading Lights: Where Are They Now? If I recall Wellfleet's problem, it got to the point where they skipped a major release of the software (5->7 or 6->8) because it just didn't work... so they had to go back to the drawing board and clean things up. Then they started a project to rewrite the whole mass of code (I think Ross Callon was in charge) because by then it was really a mess. (Think of how Netscape 4.7 was replaced by Mozilla 1.0, a five-year total rewrite.) And then it was too late; they were too far behind the curve (well, a five-letter word beginning with C).
    materialgirl 12/5/2012 | 2:50:20 AM
    re: 2004 Leading Lights: Where Are They Now? Re 4x growth. CSCO grew revenues about 9.7% in their October quarter versus about 38% as I recall in the September quarter at JNPR. 4x9.7=38.8.
    paolo.franzoi 12/5/2012 | 2:50:26 AM
    re: 2004 Leading Lights: Where Are They Now?
    What I remember of Wellfleet is that they had a lot higher performance than the equivalent Cisco routers. Problem was you could walk up to a craft port of two routers, configure them identically, and get two different sets of behavior.

    seven
    turing 12/5/2012 | 2:50:28 AM
    re: 2004 Leading Lights: Where Are They Now? Wellfleet/Bay Networks - if only they had gotten their minds (and talent) around IGP and BGP development in those crucial times in 1996

    You're kidding, right? It wasn't IGP/BGP that got Cisco where they are. It wasn't technology at all. (although certainly a bigger feature list helped a lot, BGP/IGP was not it) And the BFR became the failed Versalar which was on the list already mentioned.

    I don't recall Ascend being close to any router gold ring except in their mind. Fore Systems thought they had one too. Heck, Foundry was even thinking it.
    DocGonzo 12/5/2012 | 2:50:32 AM
    re: 2004 Leading Lights: Where Are They Now? But let us not forget two pioneering contenders that perhaps held their destiny in their very own hands:

    Wellfleet/Bay Networks - if only they had gotten their minds (and talent) around IGP and BGP development in those crucial times in 1996

    Ascend/Netstar - the GRF was on a trajectory to be certified as a true Internet backbone contender, but they fell short in 1997

    These two came closer to the gold ring than any of the others listed.

    Ah, the memories...

    Doc
    grayhairedgeek 12/5/2012 | 2:50:33 AM
    re: 2004 Leading Lights: Where Are They Now? 4x the growth rate of Cisco? Care to share your source for that statistic?

    turing 12/5/2012 | 2:50:33 AM
    re: 2004 Leading Lights: Where Are They Now? I have to admit I was surprised Chiaro made it this far. I thought the writing was on the wall for them 3 years ago.

    Quick, how many dead core routers can you name: Ironbridge, Procket, Pluris, Packetstar, Nexabit, Versalar, Optera, Argonne, Axiowave... and Chiaro. Ten little Indians...

    Others: Hyperchip, Springtide (or was that Nexabit?), Crescent, Charlotte's Web.
    And really Caspian too since they once targeted and then later gave up on core routers i think.
    reoptic 12/5/2012 | 2:50:34 AM
    re: 2004 Leading Lights: Where Are They Now? Core router market littered with dead companies. Comcast for example spends mostly on the edge not core. Content needs to be close to the customer and cached for on demand vs. routed nationwide for videoconferencing.

    Quick, how many dead core routers can you name: Ironbridge, Procket, Pluris, Packetstar, Nexabit, Versalar, Optera, Argonne, Axiowave... and Chiaro. Ten little Indians...
    dwdm 12/5/2012 | 2:50:34 AM
    re: 2004 Leading Lights: Where Are They Now? IOS, much like JUNOS is not in the forwarding path in the midrange to high end. From what I know about the CRS-1, that it is a very powerful router with many capabilities that are truely amazing. I believe that it is as close to a carrier class router as you can get. On the other hand, Juniper released the best router at the time when it introduced the M-series few years ago. So far, Juniper hasn't produced much innovation. They simply purchased few companies, repackaged the M-series into different sizes, and tried to offload functionality to 'serivces' modules which usually are bottlenecks. What happened to Juniper? I know they still have talented engineers, but where is the innovation in hardware?
    test head 12/5/2012 | 2:50:35 AM
    re: 2004 Leading Lights: Where Are They Now? I headr that Chiaro was shutting down today. Can anyone confirm?

    Test Head.
    materialgirl 12/5/2012 | 2:50:36 AM
    re: 2004 Leading Lights: Where Are They Now? What about the proposition that as corporations add voice to their routed networks, they need an upgrade because IOS cannot handle the load. If you then add features like load balancing and security, IOS really supposedly tanks. If corporations have to upgrade, why not do it to a carrier-class product downsized for your needs, that also has all the security, WAN acceleration and balancing features already included. This does not sound far fetched to me.
    turing 12/5/2012 | 2:50:38 AM
    re: 2004 Leading Lights: Where Are They Now? You can't underestimate how important this product was to Cisco. Even though the CRS-1's financial impact has been hard to determine, it's been successful on the marketing front, establishing that Cisco can at least keep up with -- and maybe even edge ahead of -- its rivals in the core.

    Where do you guys get this spin? In a year and a half of "availability" it's been nowhere. I give em credit for finally announcing Comcast as the first real customer for this box, but that's hardly a surprise. Comcast is basically Cisco's beach. (replace 'ea' with 'it') Cisco could make them deploy a Linksys for their core router if they wanted to.

    Even with Comcast, Avici's router has more deployments and market share, and that's a sad statement. And the Juniper T640 just crushes it in those same categories.

    If the goal of the CRS was just to allay fears that Cisco had no roadmap or strategy for bigger and better things, then it's done that. But they do that with PowerPoint every day anyway. As a revenue-generating, actually meant-to-be-used router I don't see how you can call it a success. It should be under a category of "Best Marketing Strategy", not "Best New Product".
    matahari 12/5/2012 | 2:50:38 AM
    re: 2004 Leading Lights: Where Are They Now? Agreed. The bottom line is earnings growth. Revenue increases are nice, but if the margins
    decline as a net result, the long term strategy
    and health is questionable.. unless, the end
    result is to gain so much market share that
    the competitor gives up. In this case, the
    main competitor is Cisco. It's unlikely
    Juniper can gain so much market share that
    Cisco gives up and walks away from a
    certain market.

    Also, look at the space Juniper is expanding
    into. They are moving from the carrier space to
    enterprise. That will increase revenue, but
    keeping the same margin will not be easy. One
    way is to cut cost by reducing overhead.
    Besides trying to sqeeze component providers to
    lower prices, redesigning to be cost effective
    which by itself will increase R&D expenses,
    other options are headcount reductions and
    forced holidays. See those trends coming soon
    to Juniper, if not already.
    russ4br 12/5/2012 | 2:50:38 AM
    re: 2004 Leading Lights: Where Are They Now? You looking to Wall St. for guidance is like the tail wagging the dog. Look at results instead.

    Analysts have already figured out that JNPR/CSCO story is more like AMD/INTC. JNPR strategy so far has proven it ... JNPR follows CSCO lead, or more appropriately, CSCO is their sole reference. No wonder JNPR stock rise/fall in tandem with CSCO's. Sure, once in a blue moon they come up with a point product advantage ... does it really matter (valuation-wise)? The only card left to JNPR is trying to come up with a good Ethernet Switch, and they have so far been late to the game.

    -russ
    ragho 12/5/2012 | 2:50:39 AM
    re: 2004 Leading Lights: Where Are They Now?
    I like your enthusiasm about JNPR but as much as I dislike CSCO, they have: STRONG balance sheet, STRONG income statement, STRONG cash flow.

    The only "4x rate" that you are talking about for JNPR (and that I know of) is revenue. But that alone isn't enough, nor the true story.

    JNPRs gross margin and operating income have been flat, relative to revenue (for the past 6 quarters). That means despite revenue growth, they are not improving any margins nor have their recent acquisitions been accretive to earnings after the first year. Plus, there is 4B+ of goodwill in the balance sheet of the 6B+ net equity. Doesn't take an idiot to figure out that could be written off in a single day.

    In the long term, the only true thing that drives a stock price is earnings (and earnings growth). Regardless of how stupid someone in Wall Street is to turn a quick buck, this remains true.

    -ragho
    materialgirl 12/5/2012 | 2:50:40 AM
    re: 2004 Leading Lights: Where Are They Now? I would not dis JNPR just because the stock has not moved. They have beat forecasts and upped estimates every quarter. They continue to grow at about 4x the rate of CSCO while holding margins. They continue to get new wins of their own, like that Chinese Internet-2 like deal.

    JNPR has the Wall Street "up and comer" disease. Investors cannot believe CSCO has a problem until their noses really get ground into it. If CSCO sneezes (which they have done alot lately), they assume JNPR has the flu. However, JNPR numbers do not reflect a flu-like condition. One day they will wake up and JNPR will pop.

    You looking to Wall St. for guidance is like the tail wagging the dog. Look at results instead.
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