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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ahacket2 12/4/2012 | 10:29:47 PM
re: Luminous Cuts Away I'm not certain things are going all that well at Luminous. Rumor has it that one of Luminous founders was laid off and that the HR Director either quit or was laid off. Also, apparently the VP of Marketing and one of the VPs of Engineering is on the outs and looking for work elsewhere. In addition, supposedly other department heads were put on 60 day notice.

Apparently the board was upset that orders were promised by Luminous management and were not delivered. Because of this, management was allegedly forced to make some difficult decisions and had to layoff 50+ people and will also close a facility in Colorado Springs by the end of May.

Also, some VCs are saying that the $10M Qwest order was never deployed and is sitting in a warehouse.

Isn't it strange that Luminous keeps talking about China and most companies that are in trouble seem to quote some phantom order from China or re-spin stories on old deals that they may have given stock to get in the first place?
GlassyEyed 12/4/2012 | 10:29:46 PM
re: Luminous Cuts Away Distance limitations.
FiberFan 12/4/2012 | 10:29:46 PM
re: Luminous Cuts Away Glassy Eyed is correct. One of the problems in token passing is latency incurred by distance. Early Token Ring Networks had to be partitioned because of this problem and they were usually in the same building! Switched TR and before that, bridges help alleviate that problem.
Your thoughts?
blue_light 12/4/2012 | 10:29:45 PM
re: Luminous Cuts Away RPR Semiconductor is a Leading semiconductor company providing silicon solutions world wide(mostly India & China) for IEEE802.17 Standard RPR Technology.
powertone 12/4/2012 | 10:29:45 PM
re: Luminous Cuts Away The whole RPR hoopla was created to fuel the CLECs hype. Now that most CLECs are dead, the existance of RPR becomes questionable. Even for thoes less developped cities, why would they want to choose a non-proven technology over sonet??
LeCastor71 12/4/2012 | 10:29:45 PM
re: Luminous Cuts Away Thanks, that was quick!

Somebody else told me that once as well, yes FDDI is distance limited from my understanding only by the token timing. Amplification solves one aspect but not the fundamental technology and that's why I'm asking that if you "modified FDDI" surely that would be easier than reworking most of Ethernet?

That makes me think of 2 additional questions:

1. If FDDI over DWDM gets limited by irrespective of amplification and singlemode fiber use, what is the practical limit of an FDDI port on say an OPTera Metro or ONI ONline box?

2. When GigE first came out it was limited to 550m versus 2km for FDDI, why can't the problems be solved in a similar manner for FDDI?

I understand some of the implications of distance on FICON and ESCON over DWDM yet it just seems to me that FDDI would have been a more elegant technology to rework for extra distance while keeping all of the reliability aspects, reducing security fears while retaining predictability.

I know this pointer below refers to singlemode in an Enterprise environment rather than on 1550nm DWDM gear but it seems to mention little difference between GigE and FDDI when it comes to distance.

flanker 12/4/2012 | 10:29:44 PM
re: Luminous Cuts Away The incumbent operators in Europe and Asia are just as fastidious about SDH as the service providers in North America are about SONET.

<font color="#FFFF00" face="Verdana"><font color="#FFCC00" size="6">yep</font><font size="6">
optica 12/4/2012 | 10:29:41 PM
re: Luminous Cuts Away Someone mentioned that Luminous had some cable sales.
Could he/she elaborate on that?
Also borrowing the lack of embedded SONET logic, cable TV should be a natural candidate to use RPR as converged transport vehicle. That is, of course, if the Cable MSO's choose to converge and they may or may not be so eager.

Just my 2 pennies.
Light-bulb 12/4/2012 | 10:29:41 PM
re: Luminous Cuts Away LC,
You know FDDI was probably the most robust (Lan) architecture ever made. Yes, I'm sure i'll get slammed for saying it but seriously it provided a higher data rate then Token ring, Higher survivability than Ethernet (802.1d=Crap) Much more efficient mechanisms for link control (FDDI can run at over 98%) compared to Ethernets 30% on the high end.
Yes I really liked FDDI... However the cost was extremely high. At one point FDDI was migrating to FDDI-2 (sounds like a bad Sequel) and was going to 622mb however the cost was prohibitive, and the needs just didn't justify. Bottom line the standards died before full ratification. Also the last FDDI chip was made some time ago from what I hear all FDDI chips have ceased production. (Still being supported just not produced)

However LC, FDDI is still a Shared topology and as such, its hard to control the bandwidth to a specific user on the Ring.


drone387 12/4/2012 | 10:29:41 PM
re: Luminous Cuts Away Anyone know how Chip Engines (MAN/RPR chips) in San Jose is doing?
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