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Chatter's New Box

Light Reading
News Analysis
Light Reading
5/12/2000

LAS VEGAS, NV--Last week, it emerged that Mukesh Chatter, the founder of Nexabit Networks and subseqently vice president and general manager of Lucent Technology Inc.'s http://www.lucent.com core routing technologies, was potentially lighting out of Lucent for his next venture. Now, several sources have confirmed that Chatter has definitely packed his bags and is launching a company known as AxioWave, which purportedly will pursue some angle on optical networking.

The www.axiowave.com domain name was registered in March at Register.com Inc. http://www.register.com under the name of Chatter's wife, Priti Chatter.

A source within Lucent said Chatter will be joined at the new venture by his former founding partner at Nexabit, Ray Stata, who is also a founder and Chairman of Analog Devices Inc. http://www.analogdevices.com, adding weight to the deal. A separate source outside of Lucent said that Mukesh Chatter had funded the company's first round of financing with his own money and that the new company is headquartered across the street from Nexabit offices in Marlborough, Mass.

Chatter was responsible for Lucent’s terabit router product line. He was formerly CEO and founder of Nexabit Networks, a company bought by Lucent last year for $750 million.

The transition closes the books on Chatter's controversial and less-than-spectacular career at Lucent. According to a senior-level source within Lucent, a "communication barrier" had developed between the Lucent staff and Nexabit staff following the merger, and the two companies struggled with integrating their marketing and sales staff. "We might as well have not been bought," said the source, who requested anonymity. "We were on our own, and that was because Mukesh wanted it that way."

Industry observers have not been impressed with the reception of the Lucent terabit routers by customers. Lucent has yet to convert trial customers into a significant revenue stream, according to analysts.

"We knew the Nexabit product was going nowhere anyway," says Truc Do, a senior analyst with Wit Soundview http://www.witsoundview.com . "It's not a good box. "

In the coming months, Chatter may have the ability to recruit more Lucent employees from the Nexabit group. On July 20th, an accelerated vesting clause kicks in, giving former Nexabit employees forward vesting of two years on the Lucent options they received in the acquisition.

-- R. Scott Raynovich, Executive Editor, Light Reading http://www.lightreading.com

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