Metro DWDM Renaissance?
Neither company has made the all-important customer announcement, though both claim trials and traction with big incumbents worldwide. But there are signs that both are working hard to be first.
Tropic confirmed today that it's enlisted advice from Robert Annunziata, a former CEO of Global Crossing Holdings Ltd., who also serves on the board of ADC Telecommunications Inc. (Nasdaq: ADCT). And Photuris may be only weeks away from a customer announcement -- though it's not clear whether it will be one to stake a future on.
A bit of background: While the cost of adding DWDM to metro networks is still high, Photuris and Tropic offer carriers a way to save by configuring optical metro networks from a remote console. It's a plan shared by incumbent vendors such as Marconi Corp. plc (Nasdaq/London: MONI); but so far, these two startups have gained the most mindshare among new companies (see Tropic: Hot or What?).
These days, startups have a tough row to hoe with leading carriers, which have not only tightened the purse strings more than ever before, but refuse to entertain pitches from vendors they don't know. Hence, the push is on by both Photuris and Tropic to form a partnership with a larger supplier that will get them entré with the right customers (see Photuris Gets New CEO and $40M and Tropic Takes $20M, Looks to Partner).
Tropic may be seeking advice from Annunziata, though it won't say so. It also did not announce its relationship with him, which came to Light Reading's attention via tips from an industry source who wished to remain anonymous.
"We didn't think it was newsworthy, since he's acting in an advisory capacity," says Rob Lane, Tropic's VP of marketing and business development.
Lane won't say how long Annunziata's been advising the company's board, but indicates it's a "recent" development. He's not offering information either on whether a closer relationship's in the works.
In the past, however, Annunziata has made news. He was chairman of the board of Velocita, a startup sold to AT&T Corp. (NYSE: T) last November (see AT&T Acquires Velocita). He'd held that post from May 2000 until September 2002. Before that, he was CEO at Global Crossing from February 1999 to March 2000, where his perks, including a car and big pay, made headlines. He spend September 1998 to February 1999 as president of the Business Services at AT&T. Prior to that, he headed Teleport Communications Group, a CLEC later bought by AT&T.
Annunziata's post on ADC's board raises the question of whether he'd encourage a partnership between Tropic and ADC. But it doesn't seem likely. ADC has sold its optical properties, and even though the company highlighted acquisitions as part of the reason for a recent bond sale (see The Convertible Makes a Comeback), a spokesperson says he's not aware of any plans in the works. Annunziata may use his influence with carriers to pry open doors and ask potential customers whom they'd like to see Tropic partner with.
So -- who's in line? No one seems able to say for sure. "It's easier to say who isn't likely to partner with either Tropic or Photuris," says Brian Van Steen, principal at PointEast Research LLC. Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Ciena Corp. (Nasdaq: CIEN), Lucent Technologies Inc. (NYSE: LU), and Nortel Networks Corp. (NYSE/Toronto: NT) aren't apt to look beyond their own offerings, he says. Fujitsu Ltd. (OTC: FJTSY) has a resale agreement with ADVA AG Optical Networking (Frankfurt: ADV).
Remaining possibilities include Cisco Systems Inc. (Nasdaq: CSCO), whose lack of a solid metro DWDM strategy has been a source of speculation for months (see Cisco Peps Up Its Sonet Muxes).
Cisco did not return calls asking for comment at press time.
What about Photuris? Here, a spokewoman says news of a partnership isn't forthcoming, but an announcement "of another nature" is due within a month.
If Photuris does make a customer announcement, it could beat Tropic, which has stated it plans customer announcements by year end. But industry sources think Photuris isn't likely to boast a really big win without a partner. So even if there is news, it may not set the world on fire.
One industry source, who asked not to be named, indicated partnership talks are serious for Photuris right now -- but wouldn't say with whom. Two others, Mark Lutkowitz and Sam Greenholtz of consultancy Telecom Pragmatics Inc., think Lucent's not out of the picture. Lucent's metro DWDM offering, the Metropolis EON, has gotten mixed reviews. And Photuris has strong ties to Lucent: Its COO, Bill Gartner, was once general manager of Optical Networking Systems at Lucent; its cofounder and VP of product marketing, Ashish Vengsarkar, headed up metro optical product management there.
A Lucent spokeswoman says the company won't comment on rumor and speculation, but plans to partner with other companies as it sees fit to meet customer demand.
One reliable industry source says the race between Photuris and Tropic is worth watching. Existing vendors are putting bandaids on their products, he says, and none has the optical flexibility the two can demonstrate. He looks for one or both of them to land good partnerships within three to six months and would "love" to see both succeed.
— Mary Jander, Senior Editor, Light Reading