Luminous Cuts Away

Luminous Networks Inc., a startup building metro Ethernet equipment, laid off a little over 20 percent of its workforce earlier this month, according to sources close to the company.

The company confirmed the layoffs but would not divulge numbers. Sources say it's somewhere around 50 employees. This is the second layoff for Luminous in the past six months. The company had another small layoff in December. Currently, there are about 175 people working at the company, says John Hamburger, director of marketing communications.

“We’re fully funded," says Hamburger. "We have a product shipping for revenue. But we had to hedge against the continued market softness, which meant that we had to make some headcount reductions.”

To date, Luminous has raised $148 million in venture funding, $80 million of which it received last June (see Luminous Rounds Up $80M). Hamburger says this should be enough to take it through its next “financial event." And it is shipping products to China Netcom Corp. Ltd. (see Chinese Get Luminous). But Luminous may still have a tough road ahead of it.

The company’s whole value proposition is based upon the adoption of a technology called resilient packet ring (RPR). This technology, which is currently working its way through the Institute of Electrical and Electronics Engineers Inc. (IEEE) standards process, is designed to provide Sonet-like features and protection to Ethernet-based rings (see RPR in the Spotlight). With standardization still at least a year away, some argue that RPR is unnecessary for building out new Ethernet metro networks (see MPLS Spurs Metro Ethernet Debate). Companies like Atrica Inc. say that their devices can offer the same sort of Sonet-like protection in a traditional Ethernet mesh architecture.

Even if RPR takes off, there is still the big question of whether or not RPR should simply be a feature on an existing switch or router or if it requires a standalone box. Luminous seems to take the dedicated box approach, while a number of vendors see it as a feature.

At least four edge routing companies, including Cisco Systems Inc. (Nasdaq: CSCO), Crescent Networks Inc., Redback Networks Inc. (Nasdaq: RBAK), and Riverstone Networks Inc. (Nasdaq: RSTN), have already included RPR-like technology in their platforms (see Taking Routing to the Edge). Cisco reports that it has sold over 10,000 ports of Dynamic Protocol Transport (DPT), its proprietary version of an RPR-like technology.

But Luminous argues that its product is already getting traction in the market. It has announced a contract with China Telecom and claims that it has other international accounts that haven’t been announced yet. Regardless, opponents point out that Luminous still lacks the validation of a large U.S. carrier. Rumors had circulated over a year ago that Qwest Communications International Inc. (NYSE: Q) was looking to test the gear (see Luminous Close to Qwest Deal). But hopes of a Qwest contract have faded as the carrier continues to clamp down on its spending, especially with startups (see Is Qwest Shunning Startups?).

— Marguerite Reardon, Senior Editor, Light Reading
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wilecoyote 12/4/2012 | 10:29:53 PM
re: Luminous Cuts Away FYI, they got the Qwest order. It just wasn't $100 m. More like 10, but it's a start.

They also won a couple of cable contracts.

Watch for some customer announcements to follow up this RIF announcement.
wilecoyote 12/4/2012 | 10:29:51 PM
re: Luminous Cuts Away I think you're right: too many VPs especially in engineering.

I think Atrica is a losing proposition. Also, its latest round is a re-capitalization so don't be fooled by the numbers there. I don't know of any customers for Atrica and I'm told their SONET story is bogus (they don't support it). When you talk about hype, this company is all about hype. "All hat, no cattle" comes to mind.

I am not an insider at Luminous, nor am I an employee. I have a old friend on the Board of Directors. I know this much about Luminous: they are selling a lot more equipment than most of the startups out there. Again, watch for customer announcements in the coming weeks.
sudden69 12/4/2012 | 10:29:51 PM
re: Luminous Cuts Away What is the fate of other RPR companies like Force10 Networks and Lantern Communications? Rumor is that Lantern Communications also had a layoff sometime last year...Is RPR doomed in this depressed economy?
asics_r_us 12/4/2012 | 10:29:51 PM
re: Luminous Cuts Away It sounds like the all too common story
of a startup burning through its cash,
with too much hype and too little sales.

It also has a poor ratio of VPs and Executives
to employees judging from their website!

Do they have a VP for every dozen employees?
(175 employees/14 VPs/executives ?)

WileCoyote: You appear to be a Luminous insider,
is this company top heavy?

It seems like companies like Atrica appear to be
getting more traction with their recent $80M

Disclaimer: I am not an employee of Atrica (nor

wilecoyote 12/4/2012 | 10:29:50 PM
re: Luminous Cuts Away RPR will do well in international markets where there's no SONET. Places like China, India, some parts of Europe. To do well in North America, Luminous has to get its SONET act together and fast. And it will. You can run RPR over SONET...

Force10 Networks is not an RPR company in any way.

Lantern Communications still has not delivered a working product to the market and are running out of money.

BTW, Cisco, Nortel and Alcatel have all formally announced programs for RPR based largely on the Luminous proposals. So, does that make them "RPR companies?"
green 12/4/2012 | 10:29:49 PM
re: Luminous Cuts Away >>Regardless, opponents point out that Luminous >>still lacks the validation of a large U.S. >

look at the list of cisco DPT customer profiles

I don't see a U.S customer for cisco either. the fact is that U.S carriers don't exactly trample each other in trying to deploy new technologies..
case in point DSL a while ago..

also I heard rumours that Cisco 10,000 port count
includes the now defunct [email protected] network ports. what is the actual "active" DPT port count that cisco has right now ?
Litewave 12/4/2012 | 10:29:48 PM
re: Luminous Cuts Away Author: wilecoyote

RPR will do well in international markets where there's no SONET. Places like China, India, some parts of Europe.

Pure conjecture.

The incumbent operators in Europe and Asia are just as fastidious about SDH as the service providers in North America are about SONET.

Luminous' gains in Europe/Asia is miniscule and definitely not gaining traction. I'm sorry to say they most definitely will not survive on their own.

Disclaimer: I consult for Carriers and don't work for any RPR competitor.
LeCastor71 12/4/2012 | 10:29:47 PM
re: Luminous Cuts Away So to me, and no-one has given me a solid answer on this yet:

RPR (802.17) provides a survivable Ethernet ring infrastructure with monitoring and protection capabilities comparable to SONET while reducing costs.

Ok, this sounds great, but why then hasn't anyone just improved the clocking and signaling of FDDI to accomplish this?

I mean FDDI has DAS/SAS connections, dual homing, ring support etc. and seems to fit perfectly. There is already a wide array of Metro DWDM gear out there that supports FDDI, so why not just crack the 100M/sec (125Mb) barrier and up it to support 1.25Gb/sec connections with migration to 10G on either SONET or a 10G TBD style of FDDI.

And while we're at it, at the risk of sounding like a dinosaur here, why would anyone go RPR when FDDI is deterministic by nature being token based and much more in step with the predicatability of circuit management that carriers expect?

Don't get me wrong, I like Ethernet in a LAN environment and 10GE sounds great for point to point router meshing and the like but a survivable ring network and even ring switching was developed in FDDI long before to yield survivable data-centric rings and it's reliable. Ask any Bank or Air Traffic control network admin.
So what gives, aside from making Ethernet behave like SONET because we like the word?

Much thanks and all insights, points of view would be great.
- LC
Luminous Guy 12/4/2012 | 10:29:47 PM
re: Luminous Cuts Away ahacket2,
Somebody needs a hug.......
FiberFan 12/4/2012 | 10:29:47 PM
re: Luminous Cuts Away Litewave,
I appreciate your comments but I think you missed a key part of what wilecoyote said.

"RPR will do well in international markets where there's no SONET. Places like China, India, some parts of Europe"
The key phrase being "some parts of Europe"

"The incumbent operators in Europe and Asia are just as fastidious about SDH as the service providers in North America are about SONET."

There's a good portion of Europe (Eastern) that is mostly underdeveloped network wise. A good percentage of Asia and China presents a tremendous greenfield opportunity as well. It's interesting that Cisco/Nortel/Lucent and the rest are recently pounding their chests over deals they have won in Asia. There's not much to brag about in the US or western Europe these days.

I'd be interested to hear what kind of consulting you are involved in. You seem to have a very negative opinion of RPR, Luminous or both. Not to be cheeky, but your opinion sounds like conjecture. I do like your use of the word "fastidious". Not a word that you see used on bulletin boards very often.

BTW- The obilitory disclaimer:
I'm also a consultant for emerging technologies. IMHO, I think RPR is going to be big.

Your thoughts?
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