Optical/IP Networks

Mayan Ruins?

Mayan Networks Inc. may be going the same way as its namesake civilization.

The startup, which is developing a next-generation Sonet switch for metro area networks, is the latest in a line of startups feeling the effects of an ongoing optical networking shakeout. Today, the company announced to employees that it would be downsizing its workforce in an effort to cut costs and asked for volunteers to take the lead in falling on their swords for the company.

One source anonymously sent Light Reading an email purportedly issued internally by Andrew White, VP of corporate resources at Mayan:

    In order to conserve our cash to be able to complete future development we must reduce our expenses now and focus only those resources we need on the essential work that has to be done. Consequently, we have determined that we must reduce our workforce commensurate with those needs and the capital we have available.

    As we consider the necessary steps to be taken, we want to offer our employees the opportunity to volunteer for separation before we proceed with any involuntary reduction in our workforce. Some individuals who have key skills that we have identified as essential for the achievement of our goals will not be eligible for this separation package.

Mayan raised its initial $8 million round of funding in November 1999. Since that time it has grown to nearly 200 employees and has added over $90 million of funding to its coffers but still hasn’t been able to announce a customer.

Mayan's problems could stem in part from the fact that it had been targeting competitive local exchange carriers (CLECs) as customers. Shorter sales cycles and greater interest in partnering with startup equipment companies originally made these service providers good customers for startups, says Dennis Barsema who was CEO of Redback Networks Inc. (Nasdaq: RBAK) until last July and has recently emerged as CEO of component startup Onetta Inc.

But now, with the capital markets drying up, numbers of CLECs are running out of money and shutting down operations. AduroNet Ltd., Digital Broadband Communications, and FiberStreet are just a few of the most recent casualties (see AduroNet Goes Bustand Digital Broadband Fades Away).

Equipment startups are often the hardest hit by these closings. For example, Zaffire Inc., a metro DWDM player, announced a $20 million contract with FiberStreet a month before the company closed its doors (see Zaffire Gets Zapped). Ironically, Mayan and Zaffire, which both appear to be struggling, are co-sponsoring a seminar on the future of optical networking in the metro area network. It's set to begin on March 6.

And since the company is competing in an already crowded market, a reduction in potential customers is not a good sign. Especially, when some of its competitors are large players like Cisco Systems Inc. (Nasdaq: CSCO), through its Cerent acquisition; Redback, via its Siara deal; Lucent Technologies Inc. (NYSE: LU), through its Chromatis buyout; Fujitsu Ltd. (KLS: FUJI.KL); and now Ciena Corp. (Nasdaq: CIEN), through its acquisition of Cyras.

The scene is also crowded with other startups that haven’t been bought yet, like Astral Point Communications Inc., Geyser Networks Inc., and Ocular Networks Inc.

Mayan did not return phone calls by press time. But in previous interviews Dan Gatti, the company’s CEO, has acknowledged that the onslaught of CLEC closings was having an impact on the company (see Zaffire Gets Zapped).

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

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Lightlight 12/4/2012 | 8:50:53 PM
re: Mayan Ruins? "No man is an island entire of itself. Every man is a part of the main, a piece of the whole. Every man's death diminishes me as I am involved in mankind. Therefore, never ask for whom the bell tolls, it tolls for thee..."

John Dunn
birdieking 12/4/2012 | 8:50:53 PM
re: Mayan Ruins? Marge fires another torpedo into the side of a listing ship!
allidia 12/4/2012 | 8:50:50 PM
re: Mayan Ruins? 95% of startups will fail. 5% will not only make it but will prosper at enormous valuations. Unfortunately, Mayan and Ironbridge don't seem to have made the cut. So Ms. Darkreading why don't you tell me who will make it as you seem to knock every startup that is named.
fiberfrk 12/4/2012 | 8:50:49 PM
re: Mayan Ruins? Why is Zaffire mentioned in every Light Reading
firepig 12/4/2012 | 8:50:48 PM
re: Mayan Ruins? Thanks, from your points, the long-haul gaints have already extended their hands to metro-access. Do you think there is still a space for start-up which has not been acquired right now to make its live?
Also, like you mentioned, most the players you brought out are SONET fans, yeah, SONET is the thing on haul and there is no reason to blow them away from meto. Do you think whether there is any other solution from access? ( like you mentioned GE)

Thanks again
firepig 12/4/2012 | 8:50:48 PM
re: Mayan Ruins? Your comments sound interesting. One question: people say metro-access is hot. Is the market Mayan addressed to or they might pick up a old tech.
fk 12/4/2012 | 8:50:45 PM
re: Mayan Ruins? How do you figure that DWDM is more efficient than next-generation SONET? In what commodity is it more efficient?

It seems to me that on the edge, there isn't enough aggregation going on to justify the expense, size and power of a DWDM box. At the metro core, sure, but not at the access level. A next-gen SONET access box can be small, relatively low power, densely packed (three or four to a rack), and offer dozens of customer interfaces for a lot less cost than a comparable DWDM system. For DWDM to be cost effective, you need a very substantial degree of aggregation (many hundreds of gigabits); whom do you see in the near term providing such bandwidth demands from your neighborhood CO? Even though its obvious that only businesses could possibly afford the sorts of raw bandwidth that would make a metro-access DWDM box useful, there are still very, very few businesses (if any) willing to pay for those levels of bandwidth, even at steep discounts to the current tariff levels. I think that ultimately the access side is better served by new services than oceans of dumb bandwidth at the edge. Bandwidth is on the path of commoditization. High value differentiated services provide a chance to charge for value, an opportunity to increase margins that will be seen as very attractive by service providers. Commoditization makes cost king; differentiation makes value king. I know where I'd prefer to get MY revenue stream.
DWDM_Man 12/4/2012 | 8:50:42 PM
re: Mayan Ruins? Don't really know why Zaffire is targeted for collateral damage so often - it remains a great example that distratcing personal vendettas play a much more significant role in LR's reporting than focused journalism.

I don't think it is Maggie Reardon with an axe to grind - my hunch is that she takes directives from someone else. I think it is either LightReading leadership or an "Invisible Hand" behind them.

...in any event, there's currently no sign that it will abate any time soon.
another boring post 12/4/2012 | 8:50:42 PM
re: Mayan Ruins? DWDM_Man (and Zaffire employee?)

Here, in reverse chronological order is a list of the screw ups at Zafire in the last twelve months.

* announced customer, goes bust
* fires VP marketing
* fires 20 percent of sales team
* fires CEO
* changes product strategy (not once -- TWICE!)

I don't work for Zaffire. Neither does the lightreading reporter, obviously. So stating these facts is not a personal vendetta, is it?

Do you get it now??? It's called reporting.

mirrorman 12/4/2012 | 8:50:42 PM
re: Mayan Ruins? Where do you think RPR will fit in?
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