Len Bosack, one of the founders of Cisco Systems Inc. (Nasdaq: CSCO), is back in networking, this time with a way to let enterprises control their own optical networks.

Word of the company's appliance, the DXM, leaked in July when Bosack's XKL LLC subtly put a bunch of information up on its Website. But today is the formal launch and the first time Bosack is willing to explain the product and the rationale behind it. (See XKL Tackles Metro Optical.)



XKL isn't a startup -- it's 16 years old. Which suggests an obvious question: What the heck have they been doing all this time?

Not burning up venture funding, for one thing. In fact, Bosack says he's footed the entire bill for XKL himself. He won't offer an estimate of what it's cost, saying only that it hasn't been a lot.

"This is not Procket. We can tell the difference between getting the job done at a reasonable price and not," Bosack says. (Ouch. See Procket Reaches 'End of Life'.)

Just north of 30 employees now, XKL started out researching computer I/O and selling a clone version of some obsolete Digital Equipment hardware. "It wasn't a big market, but it did give us some field experience in what we do now," Bosack says.

To find a bigger market, Bosack changed course around 2001 to optical networking, targeting businesses that would otherwise need dark fiber. "What we're trying to convince them of is: We allow you to light your own fiber and not have the phone company involved," says Robert Michaels, XKL's chief engineer.

The DXM is a 10-port optical system, pizza-box sized and stackable in groups of four. Port speeds go up to 2.5 Gbit/s or 10 Gbit/s, depending on which model you've got.

What makes the box enterprise-friendly is that it's also got a user interface built to resemble the command-line interface used with Cisco routers. That way, the box is familiar to the operators and technicians who are accustomed to routers. (Telecom optical equipment typically uses a different type of interface, called TL1.)

XKL says this removes one major barrier to businesses owning their own fiber. "We want it to be deployed by people who aren't optical engineers," Bosack says.

Remote sites for disaster recovery are becoming popular -- and mandated by law, in some industries -- and the distances involved call for fiber networks. XKL argues that enterprises and data centers can save money on leasing this fiber and gain more freedom. Data backups could be scheduled at the company's whim and without having to pay an outside service, for example.

Thing is, you need access to fiber, which not every building has yet. That, and the user interface issue, create a "Fear of Fiber" that XKL has to overcome, Michaels says."For those who are willing to run the backhoe across the parking lot to get to metro fiber, it does change the way you handle your data. It does change the way you run your organization," Bosack says.

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Sizing up
Enterprise business is about 15 percent of the optical market -- about $2 billion a year -- and could be 17 to 20 percent by the end of the year, according to Eve Griliches, an analyst with IDC .

Optical companies like Cisco, Ciena Corp. (NYSE: CIEN), and Nortel Networks Ltd. have been selling equipment to enterprises, but XKL is targeting smaller types of business that might not make a bigger vendor's hit list. "There's probably not enough money there for them to do this," says Michaels.

So, competition from XKL is more likely to come from more specialized companies like BTI Systems Inc. , MRV Communications Inc. (Nasdaq: MRVC), Overture Networks Inc. , or Transmode Systems AB , Griliches says.

She adds, though, that XKL's would be a low-end box, for simple, direct, high-bandwidth connectivity -- as opposed to a more complex optical mesh. That might be just right for some businesses, but competitors see some flaws in that plan.

For instance, BTI contends its microWDM box is a better fit if an enterprise has to share a fiber with others. "XKL has a specialized pizza box, and that's great if you own the fiber, have no traffic on that fiber, and have to use a fixed-wavelength plan," says Glenn Thurston, vice president of marketing for BTI.

Thurston also has his doubts about the command-line interface: "As you start getting into bigger networks, it gets cumbersome," he says, noting that bigger optical networks rely on SNMP-based provisioning equipment.

There's also the fact that ease of use comes with a price. "Our box will probably range in price from the upper $50,000 range to $120,000, depending on how you have the box configured," XKL's Michaels says. "A Transmode box is going to be around 10 percent cheaper or more."

Old school
Of course, we couldn't talk to Bosack without at least asking what he thinks of his old company, which he famously left in 1990, selling his stock in the process. Bosack says he wishes Cisco well and still occasionally sees John Morgridge, the president (now chairman) that Bosack and Sandy Lerner recruited in Cisco's infancy. But with its focus on consumer branding, Cisco has become (brace yourself for massive understatement) a different place from the one he left.

"Cisco as it grows has to be all things to all people, and that means that to a certain extent, they have to look like a global marketing organization," Bosack says. "I don't find that business challenge interesting, to me personally, but it is a challenge."

As for XKL, Bosack promises the company is nowhere near the consumer-brand stage.

"Let's face it, folks, this is industrial-grade we're selling here. This is not going to be in anybody's living room any time soon."

— Craig Matsumoto, West Coast Editor, Light Reading