Cyras Systems Inc. http://www.cyras.com thinks that small is beautiful.

Its K2 platform, which will not be officially announced until next week, appears to be the tiniest, most cost-efficient Sonet platform announced to date.

The emphasis, for now, is on appears to be. The product won’t ship until Q3. It’s not even in beta yet.

Here’s the elevator pitch: The K2 allows service providers to support any Sonet speed, from 1.544 Mbit/s T1 up to 10 Gbit/s OC-192, in a single platform only 19" wide, occupying one third of a 7’ telco rack. It also supports a bagful of features designed to improve Sonet’s ability to carry data traffic.

Analysts like what they’ve seen. “[The] product is awesome. It has incredible density [and] carrier-class Sonet,” says Scott Clavenna, principal analyst at Pioneer Consulting LLC, http://www.pioneerconsulting.com.

In Cyras’s case, who works there is as important as what the company sells.

A little history is useful in understanding why: Cyras’ core team all comes from Fiberlane Communications -- a company that self-destructed in 1998 after inter-departmental skirmishes broke out.

Former employees say that the current Cyras team was at the heart of the arguments, and was asked to leave. “All I’ll say is that a situation arose where it was convenient to sever our relationship. It’s true we didn’t agree with what they were doing,” comments Rafat Pirzada, vice president of marketing, and one of Cyras’ founders.

Three companies arose, phoenix-like, from the ashes of Fiberlane: Cerent, Siara, and Cyras. Cerent was subsequently sold to Cisco Systems Inc. http://www.cisco.com for $7 billion. Siara was snapped up by Redback Networks http://www.redback.com for $4.3 billion (see Sonet Goes POP).

With precedents like that, it’s no wonder that the announcement of the first product from the third Fiberlane sibling has been eagerly anticipated. Or, perhaps, that the K2 is opening to the sort of rave reviews that are more typically associated with Broadway billboards than optical networking announcements.

“It sounds like Cerent-plus. Actually, it sounds like Cerent-plus-plus,” says Mark Lutkowitz, president of consultancy and analyst house Trans-Formation Inc. http://www.trans-formation.com. “They’re talking about an order of magnitude more data functionality than Cerent – which in itself was a revolutionary product. I thought Cerent was worth every penny of what Cisco spent to buy it. You can only imagine what this company is worth,” he adds.

Which raises the question of what will happen to the established Sonet competition – companies like Nortel Networks http://www.nortelnetworks.comand Lucent http://www.lucent.com-- when the product ships.

“Together Cerent [now part of Cisco] and Cyras may just take over the Sonet market, and squeeze Nortel and Lucent badly,” Clavenna says. “Nortel is already dropping prices significantly to compete,” he adds.

Right now, the two biggest threats to such a Cisco/Cyras duopoly come from Redback Networks, the company that bought Siara, and Fujitsu http://www.fujitsu.com.

Redback is due to announce the first Sonet product to evolve from its Siara acquisition next Tuesday [Editor’s note: Light Reading’s analysis of the announcement will be available at 12:01 am EST on Tuesday].

Fujitsu will announce a product, called the 2400, at the Supercomm trade show in Atlanta next month with capabilities similar to the K2’s, according to Clavenna.The Cyras announcement will also put heavy pressure on the slew of new-age Sonet startups – including Mayan Networks Inc. http://www.mayannetworks.com -- trying to make a mark in this market (see Sonet: Prêt-A-Porter). That’s especially true now that Nasdaq gyrations have taken a big bite out of said startups’ valuations see Optical Valuations Take a Hit).

So other than the employees’ history, and the product’s tiny form factor, what else makes the Cyras box so hot? A few things.

First, it’s based on high-performance ASICs (application specific integrated circuits), rather than slower FPGAs (field programmable gate arrays) or “switch-on-a-chip” silicon.

Cyras claims the ASICs are done, baked, good to go. Off the record, some of its competitors claim that’s not the case. Given that the product is not shipping, there’s no way to tell for sure one way or the other. But observers say that Cyras’ staff lends credence to their case. “You have to take what they claim with a pinch of salt, because it’s in pre-production. But I see no reason to believe they can’t do what they are saying,” says Lutkowitz.

“Sunil Tomar [Cyras’ vice president of hardware] is considered one of the greatest ASIC designers ever. I think the ASICs are real,” says Clavenna.

A second differentiator is a set of data optimization features that improve Sonet’s ability to carrier data traffic. These include built in ATM switching (used to stat mux data traffic onto Sonet circuits) and “arbitrary concatenation” (a technique that Cyras claims allows the K2 to create customized Sonet channels to meet the bandwidth requirements of different data streams).

At some point, the K2 platform also will support frame relay, DSLAM, MPLS and WDM capabilities, Cyras says.

Price is also part of the picture. Cyras claims its product will cost less than one third as much as the traditional Sonet solutions to buy – savings that ramp up over time in reduced maintenance and management costs.

-- Stephen Saunders, US Editor, Light Reading http://www.lightreading.com