Photonex Has a 40-Gbit/s Idea
Meet Photonex, a venture-backed company formed from a core of Massachusetts Institute of Technology Lincoln Labs scientists and ex Nortel Networks Corp. (NYSE/Toronto: NT) executives, which today is announcing $80 million in funding and its official launch. The company is promising a set of optical systems that will combine the bandwidth and reach of long-haul optics with the service intelligence of Internet Protocol-based edge devices.
Comparisons to Sycamore Networks Inc. (Nasdaq: SCMR) are inevitable. Two of the company's founders come from Lincoln Labs' Advanced Networking Group, where Sycamore founders Eric Swanson and and Rick Barry once worked. Two of Photonex's investors, Matrix Partners and North Bridge Venture Partners, were also early stage investors in Sycamore. And the company is aiming big -- just as Sycamore did.
In the the $80 million second round, which brings the company's total funding to $88 million, a number of other investors joined North Bridge and Matrix, including Oak Investment Partners, Essex Investment Managment, Intel Capital, and the Photonics Fund.
Photonex CEO Kristin Rauschenbach was the founder of the Advanced Networking Group at Lincoln Labs, and CTO Katherine Hall was a senior member of that group, which was formed in 1997. They both hold PhDs and were involved in numerous experiments that pushed the envelope of long-haul optics. They describe Photonex as a next-generation optical systems company focused on tying in software services to core optical technology, though the product roadmap is still relatively vague at this point.
Rauschenbach and Hall will be joined by an impressive team of networking veterans, including executive vice president and founder Nanying Yin, formerly of Nortel and Wellfleet (a routing startup that was eventually acquired by Bay Networks, which in turn was gobbled up by Nortel); vice president of marketing Phillip Francisco, formerly of Lucent Technologies Inc. (NYSE: LU); and vice president of business development Ronald Murphy, also formerly of Wellfleet and Nortel. CFO Patrick Scannel, formerly of Silknet and Applix, will manage the books.
The Wellfleet connection doesn't stop there. Paul Severino, the chairman of Netcentric and the former CEO of Wellfleet, will sit on Photonex's board. Jeff McCarthy, another board member, is a North Bridge venture partner who spent eight years at Wellfleet and Bay and then became CEO of New Oak, which in turn was sold to Bay.
But as this cozy little industry has demonstrated over and over again, an impressive executive lineup does not necessarily equate to a blockbuster IPO. Egos must come into balance, the money people must be minded, and employees must be managed (see Another Cyras Exec Quits ).
"It's an impressive company. The next step is getting a Dan and Desh to take it to the next level," says Scott Clavenna, president of PointEast Research and director of research at Light Reading, referring to Dan Smith and Desh Despande, the experienced executives who flawlessly managed Sycamore from startup to IPO in less than two years.
"Since there is already Ciena Corp. (Nasdaq: CIEN), Corvis Corp. (Nasdaq: CORV), and Sycamore establishing today's optical network, they [Photonex] have to think about what's required in two to three years," says Clavenna. "They need leap-frog technology that isn't too esoteric to scare off carriers."
That means combining control of edge services with the long-haul optical core, according to Rauschenbach.
Rauschenbach sketches an avante garde, William Gibsonesque vision of the optical core. Service-aware software will push a high-bandwidth optical layer further out to the edge -- so far out that end users will be able to plug directly into optical Internet backbones. Eventually, this will result in dynamic bandwidth provisioning on the fly.
"You'll have guys with mohawks plugging their workstations directly into the core of the network," says Rauschenbach. "We're pushing the optical layer in new and novel ways. We're building software intelligence that allows provisioning within lambdas. And we're not going to be gasping for breath to get to 40 gigabits per second [OC768] -- we'll start at 40 gigabits."
The company already owns a portfolio of intellectual property, resulting from a deal with MIT that allows them to take a total of 12 patents in optical networking technology, which they both helped develop, to Photonex.
That leaves some questions about Lincoln Labs' Advanced Networking Group. Namely, who's left to mind the shop? Photonex will reportedly be taking dozens of Lincoln Labs employees with them, although the company declined to say how many it has hired.
-- R. Scott Raynovich, executive editor, Light Reading http://www.lightreading.com