x
Optical/IP

OMM: The End Is Near

The once glamorous market for all-optical switching components appears to be winding down like a coke-addled disco party.

OMM Inc., which was arguably one of the leading players in all-optical component technology, announced today that it will shut down on Friday, laying off all 85 of its remaining employees.

The subsystems vendor had been trying to secure extra financing. The idea didn't seem like such a long shot, considering the company had a shipping product and paying customers.

The company builds all-optical switching devices based on micro-electro-mechanical systems (MEMS), tiny switches based on tilting mirrors. Its devices are based on 2-D MEMS -- that is, they've got mirrors that can sit in two positions, "on" or "off." A grid of these mirrors forms a crossconnect, with connections created by popping the mirror into the "on" position.

"They had traction -- not just minor second-tier companies, but companies like Ciena Corp. [Nasdaq: CIEN], Alcatel SA [NYSE: ALA; Paris: CGEP:PA], and Siemens AG [NYSE: SI; Frankfurt: SIE]," says Lawrence Gasman, president of research firm Communications Industry Researchers Inc. (CIR). "If you'd asked me to bet a couple of weeks ago, I would have said they'd get some money."

But most of OMM's work was still going into lab trials rather than live networks, Gasman says. In the end, that wasn't enough for the company to overcome its overhead.

"This business is not a shoe-string operation. It was scaled quite large at the request of our customers," says Phil Chapman, OMM's CEO. "We scaled down as much as we felt we could. There was some venture interest, but basically we were running out of time. Rather than run into a wall, we decided to stop at a point when we had some cash reserves.”

OMM's last hope would be an 11th-hour reprieve à la NeoPhotonics Corp.'s rescue of Lightwave Microsystems (see NeoPhotonics Acquires Lightwave Micro). "There are a lot of people that know what we've created here, so we'll see," Chapman says.

Initially named Optical Micro Machines Inc., OMM was one of the last survivors in the market for MEMS-based switching subsystems. Onix shut its doors last year (see Components Casualty Count Climbing), and Integrated Micromachines Inc. (IMMI) shelved its optical switching product in favor of becoming a contract manufacturer for MEMS in general.

OMM also took a stab at the more elaborate 3-D MEMS technology, where mirrors can pivot to divert light to any output port. In 1999 and 2000, several startups dreamed of using 3-D MEMS to craft 1,000 x 1,000 switching elements. The poster child for the idea was Xros, acquired by Nortel Networks Corp. (NYSE/Toronto: NT) in a stock deal then worth $3 billion (for some Bubble nostalgia, see Xros Launches First 1000-Port All Optical Cross Connect and Nortel Spells Out Its Cross-Connect Strategy).

Chapman describes the 3-D MEMS foray as a "hurry-up effort" funded by potential customers, and he says it was always considered to be separate from OMM's bread-and-butter business in 2-D MEMS.

In any event, the market for 3-D MEMS never emerged. By mid-2001, potential customers such as Luxcore Networks Inc. and Ilotron Ltd. were leaving the market, and OMM downshifted to concentrate on smaller switching devices (see OMM-inous News).

Unfortunately, OMM had been beefed up by then, in hopes of going public. In the end, it wasn't able to slim down enough to withstand the downturn.

The only question now is: Can a new generation of all-optical technology stage a revival?

The vision of the all-optical switch lives on. Continuum Photonics Inc. moved into a new 24,000-square-foot facility in October and will unveil its optical-switching subsystem during the first half of 2003, according to the company's Website (see Fresh Money for New Materials). Non-MEMS efforts continue as well, from folks such as Richard Laughlin, founder of Optical Switch Corp. (see Who's Gonna Have the Last Laughlin?).

Subsystems maker Network Photonics Inc. is still in the game, too. "They're sort of higher up the food chain. [Their products] have more intelligence," says CIR's Gasman.

On the systems level, Calient Networks Inc. and Movaz Networks Inc. continue to carry the torch, both of them claiming inroads with Taiwanese carrier Chunghwa Telecom Co. Ltd. (see Calient Touts Government Test and Chungwa to Test Calient Switch).

Despite the ongoing activity, Gasman says it's clear that optical switching won't be a motherlode for components makers any time soon.

"The optical crossconnect is looking like a specialized market where there could be very few players -- or perhaps, for the next couple of years, zero," Gasman says. "MEMS is part of the optical crossconnect story, but it's going to evolve slowly."

— Craig Matsumoto, Senior Editor, Light Reading



For up-to-date information about the coming OFC Conference, please visit Light Reading’s Unauthorized OFC Preview Site

.

Page 1 / 5   >   >>
netskeptic 12/5/2012 | 12:30:47 AM
re: OMM: The End Is Near
Does it look like sycamore will have both the last laugh and the whole market (whatever the size it will be enough for a single company) when there will be no more OOO vendors out there?

Just wondering, I am working far from this field, but I always felt compelled by arguments of OEO crowd.


Thanks,

Netskeptic
Fortunecookie 12/5/2012 | 12:30:45 AM
re: OMM: The End Is Near Its name spells its destiny. SICKMORE.
BobbyMax 12/5/2012 | 12:30:44 AM
re: OMM: The End Is Near OMM got funding at the height of optical networking propoganda and enormous amount of money that VCs had. There is no really no need to have all optical switching. It was of time, money, and resources. The Unfortunate fact is that optical switching and optical crossconnects
were not needed to keep the network functioning. These optical companies had no idea about cross connects, Digital Loop Carrier, #5 ESS; yet these guys were able to receive funding. The last 4-5 years has been the era of terror, corruption, stealing, and unfair richment. About eight trillion dollars have been stolen by Wall Street from foreign investments.
CogswellCogs 12/5/2012 | 12:30:40 AM
re: OMM: The End Is Near netskeptic - How many OOO switches has Sycamore successfully deployed (carrying live customer traffic)?
netskeptic 12/5/2012 | 12:30:37 AM
re: OMM: The End Is Near > netskeptic - How many OOO switches has Sycamore
> successfully deployed (carrying live customer
> traffic)?

(Correct me if I am wrong) I suppose the answer is none, because it is OEO company.



ThouShaltNotJudge 12/5/2012 | 12:30:36 AM
re: OMM: The End Is Near GǣThere is no really no need to have all optical switching. It was of time, money, and resources.Gǥ.

This sentence is meaningless.

IGve resisted jumping on the BoobyMax bandwagon, but this guy (assuming that Bobby is a male) is truly a moron. Bobby, you have no sensibilities but are you also absent shame? If you are (or were) employed in Telecom, perhaps you should try introspection to help explain the malaise of the industry.

LR G Your ID Block feature is ineffectual. I (and I assume the complement of your readers) implore you to take immediate action and remove BobbyMax from your account database.
CogswellCogs 12/5/2012 | 12:30:35 AM
re: OMM: The End Is Near OK, I misunderstood - I thought you meant Sycamore would rule with OOO. Sorry about that.

Cogs
lilgatsby 12/5/2012 | 12:30:34 AM
re: OMM: The End Is Near Gentlemen,

Syc is not the only OEO Core Switch company in this market, it is one of many...including one that dominates the market with about 60% market-share ala the CoreDirector. Sycamore's challenge is not to overtake the OEO switch market, it is to prove they can sell to substantial customers that do not have an equity stake in the company.

BTW - Can you name this distinguished list of OOO core switch companies, and for fun how about including buying customers (if you can find 1).

lg
trixie 12/5/2012 | 12:30:34 AM
re: OMM: The End Is Near Again, what do you think about my speculation that once all OOO companies will die out, Sycamore with its OEO switch would be the only game in town?

==================================================
Um,

What town are you living in? If I recall correctly, Ciena has the top spot in OEO grooming switches in terms of market share. SCMR had good lideware, but missed the boat on availability due to HW requirements VCSELs, ASICs. I think it's all straight now, but they are not the last chance in town for OEO switching.

Marconi, Alcatel, Tellabs, Tellium also come to mind...

netskeptic 12/5/2012 | 12:30:34 AM
re: OMM: The End Is Near > OK, I misunderstood

Sorry, I did not ask clear enough.

Again, what do you think about my speculation that once all OOO companies will die out, Sycamore with its OEO switch would be the only game in town?

Thanks,

Netskeptic
Page 1 / 5   >   >>
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE