Appian Closes With No Cigar

Appian Communications Inc., a tenacious five-year-old metro optical networking startup that almost pulled through at the last minute, is closing its doors today, say sources close to the company.

Today, eyewitnesses said, boxes were being carted out of the company's headquarters after it came within a whisker of landing a $12 million funding round as it closed in on a deal with France Telecom SA (NYSE: FTE) -- and then lost it all at the last minute.

Just a week ago, the company had a party in its Acton, Mass., headquarters, to celebrate the coming infusion of capital, sources say.

Then things went into reverse about as fast as a Howard Dean political campaign. At the last minute, the contract with France Telecom fell through, and then apparently the venture capitalists who were prepared to deliver Appian the twelve mil got cold feet. As of today, boxes were being packed, the creamer in the kitchen was being thrown out, and the desks cleared, say two sources working in the same building where Appian was located.

Light Reading was not able to confirm the news with company officials, but at least three anonymous sources said the story checked out. There was no answer at the corporate switchboard, and messages left for Appian Communications executives and investors were not returned.

Earlier today, in the U.K., Mark Weeks, Appian's VP of EMEA, denied that the company was closing. "I'm the European VP, and I would know if it was," he told Light Reading. [Ed. note: Yeeaaaaaaagh!] Appian had recently keyed on the potential France Telecom deal by marketing its Resilient Packet Ring Technology features, which France Telecom wanted. Appian’s box supports RPR, but so do many others (Incumbents Grab RPR Mantle). It’s not exactly clear who else is in the running for the deal, but Alcatel SA (NYSE: ALA; Paris: CGEP:PA) is a big supplier to France Telecom and has recently been beefing up its packet ring story through a partnership with Native Networks Ltd. Atrica Inc. also lays claim to trials at the carrier.

Appian came from the startup boom of 1999 and 2000, when a whole truckload of other startups looking to market a multiservice provisioning platform (MSPP) that combined the transport capabilities of Sonet (Synchronous Optical NETwork) and SDH (Synchronous Digital Hierarchy) with the data services features of Ethernet, Asynchronous Transfer Mode (ATM), and Frame Relay.

To give Appian credit, it got much further than a lot of startups in the space. For a while it had some promising business in Asia, including a deal with Japanese carrier NTT Communications Corp. (see Appian Scores Deal With NTT). It also dabbled in the MSO space (see MSOs Eye Triple-Play Gear). But the number of small deals it had struck were apparently not enough to support the company, and in late 2002 it trimmed down to a bare-bones staff to squeeze the most out of its remaining capital (see Headcount: Workplace Weirdness).

Appian raised more than $80 million in capital over its lifetime. Early lead investors who sank big change into the startup included Matrix Partners, North Bridge Venture Partners, and Venrock Associates.

Coming just after the demise of Coriolis networks (see Coriolis Shuts Down), Appian's shutdown shows that the shakeout in the once-hot MSPP space is accelerating. Some competitors that remain in the game include Turin Networks Inc. and Native.

— R. Scott Raynovich, US Editor, Light Reading

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right_leading 12/5/2012 | 2:37:05 AM
re: Appian Closes With No Cigar .
truelight 12/5/2012 | 2:37:03 AM
re: Appian Closes With No Cigar These two companies look like winners in this space.

BobbyMax 12/5/2012 | 2:37:00 AM
re: Appian Closes With No Cigar
The Appiam MSPP platform was from perfect. An ideal MSPP should be able to provide a multiple serviceprovisioning platform including: Optical ethernet provisioning, optical components, controllers, routers, soho routers, set-top boxes, switches, bridges. T1/E1 multiplexer, video servers. It also combines combines multiple TDM elements. They provide SONET hierarchy by combining OC-3 to OC-192 ADMs with cross-connect functionality in a single, compact, flexible chassis. Some versions also combine leased line (DS1, DS3), MPLS, Ethernet, and ATM.

Considering the competition, it is doubtful that Appian woold have survived the market place. It's closure at some point was predictable.

now_more_than_ever 12/5/2012 | 2:36:59 AM
re: Appian Closes With No Cigar It won't be long .. all the 1999 startups ... so much excitement, so much hope, so much fun, so much comraderie, so much, so much , so much ...

The startup experience is such a rush, at least it was for me. You start out with a blank slate, nothing but you, a pen, and a blank piece of paper. Scary? Hell yes! Exciting? Nothing like it!

You build a core team ... and you call your old friends. The excitement, and the adrenaline, are building. You can't believe how fortunate you are to be with such an outstanding group of engineers. Why wouldn't anyone want to be part of it? It's intoxicating ... it's exilarating ... you can't wait to get to work, and you can't believe it's time to go home, but it's 9:30, and your kids want you to tell them a story before they go to sleep, but you're not home yet. So, you have to leave ... you rush home, you tell the kids good night, and you log on through that VPN switch you lobbied hard to get, so you could work anywhere, anytime, for any reason, because you are not done yet, and besides, Ken is counting on me, and I'm counting on Corey, and Corey is counting on Paul, and Paul knows that Mike is working, so there's no way that he won't be logged on, because he told Mark that he would be ready to debug tomorrow.

You are pulled, and you pull yourself, because you are part of something that is beyond you. You have attached yourself to something else, so in a way, you cannot determine, or dictate, the manner in which the larger cause will sway you.

You are committed, and it is not work. Work is a way to get a paycheck, but you are blinded to the details. It's a higher cause, and you feel as though you are beyond the normal, mundane notions of the 9-5 stiffs in your neighborhood. You are special, the startup is unique, and there's nothing but blue sky in the front, side, and rear view windows.

Then it happens.

You don't want to acknowledge it, but you feel it. The hopes, the promises, the what-ifs, and the could-be-any-day-now-deals fade. "If" replaces "when" as the operative word. It "was a good meeting" becomes a cliche. 3 people show up for dinner. You are home for dinner more than you're not. When you wake up in the morning, there's no rush, there's no particular reason that this day is going to any more demanding than the previous day. In fact, you are wondering if it ever is going to be demanding, since there is no demand, no urgency, and no particular goals. Lunch becomes a reason to leave the building, because the building itself takes on a different form.

I can go on, but if you have read this far, then you know the rest of the story.

truelight 12/5/2012 | 2:36:58 AM
re: Appian Closes With No Cigar better to have done it than to have dreamed it.
You are better for it even in these difficult times

harpoon 12/5/2012 | 2:36:50 AM
re: Appian Closes With No Cigar Nobody said Appian was creating a "perfect" or "ideal" MSPP. That would be an absurd goal for a startup; it simply requires much too much time, money and resources to achieve. Appian's problem wasn't the competition; it came to market with a working product at a most unfortunate time. Only now is the market beginning to open up again. They've had a working product for a year and a half. Too bad that corresponded with the biggest downturn in telecom equipment market history.

Do you think that Sonus had a perfect box? What about Sycamore? Corvis? Startups are not about perfection, they're about innovation. There's so much luck involved it isn't even funny. In the end, you pay your money and take your chances and put yourself on the line for a chance to make it. Just because your ship never comes in doesn't mean you didn't do everything you could have done.
harpoon 12/5/2012 | 2:36:50 AM
re: Appian Closes With No Cigar Looking on the bright side, we got great experience that made us better engineers. We executed where other failed. We achieved where others fell short. The asked us to build things, and we delivered quality. What else can an engineer do? We weren't the lucky ones. We didn't get an Arrowpoint-style buyout, nor did we get a Sonus-like IPO. In the end, the big payoff depends more on things you cannot control than things you can.

Nonetheless, even with a beautifully printed piece of scrap paper (for thousands of shares), there are things to be thankful for. We met and worked with a fine group of people. We were asked to create, and we did. The experiences we had are memorable. There's still time to make more. We will cross paths again.
waverunner 12/5/2012 | 2:36:50 AM
re: Appian Closes With No Cigar Right behind you. I bow before the fallen; you have fought well, heal your injured and bury your dead make distance from this place, tomorrow anew!

godfather 12/5/2012 | 2:36:49 AM
re: Appian Closes With No Cigar LR should get their story right.

Appian got out of the RPR game two years ago. That was their fatal mistake. Instead, they decided to do something completely proprietary.

How could they have known, of course, that the bubble would burst and there would be no space for their proprietary solutions...

And obviously, they were not talking to France Telecom about RPR - they didn't HAVE an RPR product to begin with.

Someone correct me if I am wrong, but I thought France Telecom was only looking for a Metro Ethernet solution - not necessarily RPR based. Otherwise, Atrica wouldn't have had a chance. And the word on the street is that Atrica was always going to get the France Telecom contract anyway.
AIS 12/5/2012 | 2:36:48 AM
re: Appian Closes With No Cigar BobbyMin,

You are still a moron. Lern to spell.

All your base is belong to us.
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