Is the Bloom off Jasmine?

Jasmine Networks could be wilting as fast as it blossomed. The company has already lost its CEO and laid off about 25 percent of its workers; now it's about to lose a key vice president. It's put out a press release to clarify some of the changes (see Jasmine Retrenches).

Light Reading confirmed earlier this week that Venkata V. Chalam, vice president of engineering, is leaving his post as of April 1st. Before going to Jasmine, Chalam had been vice president of engineering at Inrange Technologies Corp., and he also held positions at DSC Communications Corp. and Texas Instruments Inc..

Srinivasarao Neelamraju (also known as N.S. Rao), the current CTO, will now wear two hats as he takes over as acting VP of engineering, replacing Chalam, according to the release.

But Chalam isn’t the only one bailing out on Jasmine. Sources close to the company told Light Reading that Jasmine had laid off about 40 percent of its work force last Friday. In the press release, the company said the figure is closer to 25 percent. The Richardson, Texas, office was hit the hardest, as the company reduced the workforce there to “only critical job functions." After the restructuring and consolidation, Jasmine now has approximately 180 employees, according to the release.

Ravi Dattatreya, Jasmine’s chief executive officer, was asked to step down from his position about two weeks ago, say sources. Allan Tessler, chairman and CEO of JNet Enterprises, a venture investor in Jasmine, has been named interim CEO. Dattatreya, who is a founder of the company, is now the vice chairman of the board of directors, according to the release.

Officials at Jasmine say the reduction in staffing is a response to the overall market slowdown in capital expenditures from prospective customers.

“While we believe that the ultimate demand for our products remains strong, we expect that the sales cycles may be pushed out into the first half of 2002,” said Chandra Mouli Ramani, vice president of business development, in the prepared statement.

But a source close to the company says that Chalam’s departure, the firing of Dattatreya, and the massive layoff are all the result of an OEM deal the company cut with Nortel Networks Corp. (NYSE/Toronto: NT) back in July 2000.

According to the source, Jasmine put aside its initial plan to build a next-generation Sonet and IP switch to rival those from Cyras (now Ciena Corp. [Nasdaq: CIEN]), Cisco Systems Inc. (Nasdaq: CSCO), and Redback Networks Inc. (Nasdaq: RBAK), when it was approached by Nortel to build an OC48/OC192 multiplexer to fit into the optical transport product portfolio that Nortel had acquired from Qtera.

The $90 million in venture money, which was originally raised for the development of a next-generation Sonet product, was instead used to develop the Nortel multiplexer.

“The product that has been developed is simply a dumb OC48/OC192 multiplexer,” says the source. “It has nothing to do with the original product plan. There’s no add-drop muxing capability, no production schemes. It takes OC48 in and it comes out at OC192, that’s it."

The multiplexer, which is expected to begin shipping under the Nortel label by the end of next month, was supposed to provide Jasmine with a lucrative revenue stream that could be used to help fund the development of other, more cutting-edge projects. But back in late November, Nortel first reported that it was experiencing a slowdown in its optical business (see Nortel's Fright Night). With each Nortel warning since then, it became apparent to Jasmine’s investors that Nortel would not be buying as many products as Jasmine had initially hoped for, says the source.

“They spent too much money building this product,” he explains. “And the board was unhappy that the revenue expectation wouldn’t be fulfilled, so they asked Dattatreya to leave. Someone had to take the blame, I guess.”

Investors are reluctant to finance another round, and the company is being forced to cut back, hence the reduction in workforce. As for Chalam’s departure, the source says that he has become disillusioned by Jasmine’s lack of focus and is currently looking for another job.

A Jasmine spokesperson said that the company could not comment on the reseller aggreement with Nortel, because it has signed non-disclosure agreements with all of its potential customers. But he did say that the company has not changed its product vision.

At first, Jasmine seemed to have the right mix of technical expertise and Wall Street ties (see Jasmine: Wall Street's Way to San Jose). Before founding the startup, Jasmine’s chairman and director of the board, E.S.P. Das, was vice-chairman of investment banking at Merrill Lynch & Co. Inc. (NYSE: MER). Dattatreya had previous stints as senior vice president at Sumitomo Bank Capital Markets, as well as with Prudential Securities and Goldman Sachs & Co. (NYSE: GS). On the technical side, N. S. Rao worked at Cerent (now Cisco) and Cyras (now Ciena). And Mouli Ramani worked at Nortel for eight years, where he rose through the ranks to VP of strategic marketing for optical Internet products.

The common criticism of Jasmine was that it was a financing play coming late to the market to capitalize on the success of startups such as Cerent, Siara, and Cyras, all of which were sold to larger companies for multiple billions of dollars. Now that the stock market has cooled, the prospects for a quick sale -- or IPO -- have evaporated.

-- Marguerite Reardon, senior editor, Light Reading http://www.lightreading.com

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LED 12/4/2012 | 8:40:31 PM
re: Is the Bloom off Jasmine? Just look at this sentence...

"From the start they seemed to be Wall Street money trying to jump on the photonics bandwagon,"
said one observer. "I'd have to say if they were having trouble that it doesn't surprise me.?"

come on... such childish reporting... who or what is the observer... is he a person who you picked
from the streets like Jay Leno and ask him
for a "Jay Walking" comment...

please improve your reporting...

I like your site...
I know it is difficult for you guys to come
up with interesting titbits of information
daily...and I give you guys the credit
for transforming arcane news items related
to networking and making them as interesting
as national enquirer gossip...

and whether we like it or not, your articles have
become a staple food for many of us in
the networking field daily... but sometimes
we happen to choke on what you feed...and
lately that has kind of increased...

Please improve your reporting... And I hope
that you guys are reading the articles
at least ONCE before you publish it
on your website...

e_bengal 12/4/2012 | 8:40:28 PM
re: Is the Bloom off Jasmine? Talked to a friend of mine, who works in
the ASIC group. He said nothing got changed
in the group. Not a single engineer left the
company !!!

lightsource 12/4/2012 | 8:40:28 PM
re: Is the Bloom off Jasmine? it's true !! people have been laid off !!
but may not be 100 as LR as mentioned.
Well, can't blame LR for it, it's become it's habit to blow numbers out of propertions !!
YankeeLondon 12/4/2012 | 8:40:28 PM
re: Is the Bloom off Jasmine? talked to my friend too.

i expect jasmine to make a press release

meanwhile, lighreading continues to indulge
in crass reporting based on rumours.

waveform 12/4/2012 | 8:40:23 PM
re: Is the Bloom off Jasmine? Lemme see.....I used to work at Jasmine yesterday and today I am at home...I wonder if I am experiencing a rumour? Let me get back to you on this one.....
sandra 12/4/2012 | 8:40:17 PM
re: Is the Bloom off Jasmine? Hi Waveform,

It's too bad about your situation, if your looking for work contact me, I might be able to help you out.

[email protected]
[email protected] 12/4/2012 | 8:40:11 PM
re: Is the Bloom off Jasmine? A great many engineers have had their hopes dashed by what is happenning at Jasmine. However the truth is Jasmine was a Wall Street play. It was Dumb money that was focused on riding the wave rather than building a business. As long as they could get to IPO then the 'Dumb" money folks would be XX zillions of $$ richer. Now that they cant they are licking their cuts (the Engineers at Jasmine are the ones that have big gaping wounds) and moving onto the next "sure" thing.

Now I fully expect to be lambasted by those folks still at Jasmine so I have included a post from the very start of the new year when Jasmine was still considered HOT HOT HOT (NOT NOT NEVER)

Author: [email protected] Number: 15
Subject: Re: Glaring Omissions from Top 10 List Date: 1/9/2001 7:25:09 AM

One of the most obvious was Calient which has since been rectified. (By the way why did it go in at 6 when it could not make the Top 10 a couple of weeks before. Was it because it appeared on your radar when they announced the latest round of funding?)

Xtera is a company that can win an account without someone else having to loose. That would seem to me to be a very powerful proposition. Increase your bandwidth without having to replace, (accelerated depreciation / write off) your current vendors equipment.

Contrast that to Jasmine. They are going to have their ASIC's working and all the supporting software written and have the sales / service infrastructre in place all within 15 months. I think not. They are / were very late to the market and the only way they can make a "splash" is through press releases. The bottom line is that unless you have true innovation the window closed a while ago at the System Level.

In the component space there are very exciting companies / innovation. Thats were I think a great deal of sustainable value will be created in 2001 and beyond.

At the end of the day you put them up and well (try and) shoot them down. That way we all may learn something
takeitlightly 12/4/2012 | 8:40:07 PM
re: Is the Bloom off Jasmine? The lights have gone out now for the sound :-)
Is this the new venture mentioned in the article??

Check out www.ravalex.com.
dietaryfiber 12/4/2012 | 8:40:04 PM
re: Is the Bloom off Jasmine? I have know VV Chalam for about 13 years. I have worked with him on several occasions and I would say that his exit is a gain for Jasmine networks. While not inherently evil or malicious, he is one of the most incompetent senior managers I have ever met. If you find him in your company, it is certainly not good news. Ask people at Racal or Ungermann-Bass about him, oh thats right you can't they are all gone.

haley 12/4/2012 | 8:40:03 PM
re: Is the Bloom off Jasmine? Hey guys, any suggestions on where to find names of engineering directors at Juniper and/or Sycamore??
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