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Luminous Thinks Small

Light Reading
Supercomm News Analysis
Light Reading
5/27/2003

Luminous Networks Inc. -- which over the years has become a smaller company -- now has a smaller product.

The company is now looking to take its Resilient Packet Ring Technology concept out to end-user sites, producing boxes designed to put the customer premises directly onto a metro or access ring (see Luminous Targets MTUs). The PacketWave E500 series of boxes, announced today, is an extension of Luminous's sales into metro networks. "We were looking at two directions -- going back into the core and doing 10-Gig, or going further out into the edge," says Brian Noel, VP of marketing. Given the lackluster core market, the decision couldn't have been hard.

The move hints at the company's new survival strategy. Luminous is among that class of systems companies founded during the bubble with an eye toward high-end metro installations. Like its peers, the company has been swimming in losses and layoffs (see Headcount: Mississippi Spurning) and is trying to stay afloat by adapting its technology to suit access and edge networks -- in this case, going all the way out to individual buildings.

The idea is to take advantage of RPR and virtual concatenation, both of which help pack bandwidth more efficiently, to let smaller business sites hop onto the ring. Noel says some customers are running as many as 25 nodes on a ring, as opposed to the four or six nodes typical of vanilla Sonet.

"Carriers are looking for places to extend Sonet/SDH," says Michael Howard, president of research firm Infonetics Research Inc. One way to do that is to use virtual concatenation, but "an alternative is to use RPR as Layer 2 over Sonet or SDH. That's viable."

Luminous has yet to crack any North American ILEC accounts, but it has won contracts with cable providers and Chinese operators, Noel says. He also says RPR is getting more attention from service providers: "In the last six months I've seen RFPs coming out written exclusively for RPR."

At the same time, though, Luminous is struggling with the "RPR guys" label. Not that there's anything wrong with that, but the company has always thought of itself as more of a multiservice player than an RPR vendor, Noel says. For example, different cards for the E500 can support various T1/E1, Ethernet, or Sonet interfaces.

In fact, Noel says the primary competition for the E500 comes not from RPR rivals Corrigent Systems Inc. or Lantern Communications Inc., but from multiservice metro gear such as the ONS 15327 from Cisco Systems Inc. (Nasdaq: CSCO) or the OptiX Metro 3000 boxes from Huawei Technologies Co. Ltd..

Luminous is also hoping the E500 can help it finally crack the ranks of North American ILECs. Since its early days, the company has had the ear of cable MSOs (see Scientific-Atlanta Invests $10M in Luminous), and -- like 'most everyone -- it's been putting heavy emphasis on China (see Keybridge Orders Luminous Gear and Luminous Gets China VP).

The E500 is a lot like the Luminous E200, which targets secondary cable hubs. But the E500 is more modular. It starts out smaller than the E200 but can add more customer-facing interfaces than the E200.

Two E500 boxes are due to ship in June: the E510 and E520, priced at $15,000 and $19,000, respectively. The E510 connects to 1-Gbit/s networks, while the E520 has 2.5-Gbit/s interfaces.

— Craig Matsumoto, Senior Editor, Light Reading

For extensive and up-to-date coverage of Supercomm – before, during, and after the show – visit Light Reading's Supercomm Preview Site.

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