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Optical/IP

Photuris & SBC: The Inside Story

The mist is lifting on what's happening at SBC Communications Inc. (NYSE: SBC) regarding its RFP for reconfigurable optical add/drop multiplexers (ROADMs) -- and how those developments triggered the effective closure of startup Photuris Inc. at the end of last week (see Photuris Is Finished).

The closure was triggered by "negative news" from one of the three RBOCs that were evaluating Photuris's metro box, according to Ashish Vengsarkar, founder and VP of product management at Photuris. Vengsarkar declined to name the RBOC in question but Light Reading has confirmed that it was SBC.

It's become clear that the negative news for Photuris wasn't accompanied by positive news, a contract win, for another vendor. Instead, Photuris was told that it hadn't made it onto a shortlist of suppliers whose products will now undergo further extensive evaluation by SBC, in a process that might take several more months.

Word has it that three parties have made it onto this shortlist. One of them is a partnership of Tropic Networks Inc. and Alcatel SA (NYSE: ALA; Paris: CGEP:PA) -- a partnership that Tropic declines to confirm or deny.

The other shortlisted bidders are a still a matter of guesswork. It's known that SBC has asked startups in this field to form partnerships with its existing suppliers -- and that was Photuris's undoing. Sources close to Photuris say the company tried to swing a deal with UTStarcom Inc. (Nasdaq: UTSI), but SBC got tired of waiting and, last Thursday, pulled the plug. Within a few hours, staff at Photuris were told the game was over, the money had run out, and they should go home on unpaid leave.

This would be just another case of a startup failing to make a shortlist with an incumbent carrier if it weren't for one thing: SBC had been testing Photuris's product in its Austin, Texas, labs for the best part of a year, in advance of testing any other vendors' products.

"They truly loved it. The RFP was written exactly to match the features and functionality of the Photuris box. I have never seen anything like it. Photuris was able to answer positively to almost every RFP item," says a source, who requested anonymity. This tallies with other reports of a striking resemblance between SBC's RFP and Photuris's product spec.

The contract, said to be worth at least $50 million a year, was Photuris's for the taking, so long as it could find a partner -- and it failed to do so.

UTStarcom declined to comment on whether it had discussed a partnership with Photuris. Vengsarkar says UTStarcom and Siemens Information and Communications Networks Inc. were leading prospective partners, but refuses to discuss any of the RBOC trials Photuris was involved in, citing non-disclosure agreements. SBC also declines to comment.

All the same, Light Reading has obtained a memo that Vengsarkar sent staff yesterday, March 30, which confirms the version of events given by our anonymous sources. Here's what it says:

    All

    This is a tough email to compose.

    Since UTSI is not interested after the SBC decision, my worst-case scenario has unfolded - we are now talking to companies who will be interested in pieces of the business (some are interested only in the Versicolor, others in the Transponders and Software, only a couple who may consider the whole product but may not be able to act fast enough to make a difference). In any case, we don't expect a whole-scale re-hiring of our talent. I am pained by this outcome.

    We have built a great product - I have not had the pleasure of being surrounded by such a talented and dedicated group of individuals ever before. We excelled in technology innovation, product development and hitting the right features & cost-points. Given SBC's feedback that we nailed the RFP on the technical, economic and operational aspects, I feel good that we had something solid to offer customers. The fact that such a comprehensive piece of work is now being broken down into piece-parts breaks my heart (even as I feel proud of our accomplishments). For a while I truly thought that we had planted a Chinese bamboo tree (no growth for four years, then a tiny shoot appears, and in the fifth year it grows eighty feet). Unfortunately for us, we didn't get a fifth year.

    We made mistakes and I take responsibility for them. In hindsight, we could have done a better job on marketing and sales, partnerships and business deals, maybe more push on generating small revenues (a la TAMU), and more intensity in developing higher-up connections in our customer base. These are lessons learned and we will do better the next time around.

    Most importantly, through this note, I want to thank all of you for sticking with this effort until the end - I know you feel proud of what we have built and we should carry this pride to our next steps in our careers.

    If there is anything I can do for you, please let me know. If the opportunity arises, I would love to work with every one of you again.

    Ashish


[As of this writing, Vengsarkar would neither confirm now deny that he had written the message above.]

As for the other bidders shortlisted for the SBC RFP, it's likely that one pair is Lucent Technologies Inc. (NYSE: LU) and Movaz Networks Inc., although some sources say Movaz's product targets edge applications and isn't really comparable with the ones from Photuris and Tropic.

Among SBC's other suppliers, Fujitsu Network Communications Inc. (FNC) has a product, although it's "somewhat weak in ROADM function," according to a consultant familiar with the SBC RFP, who requested anonymity. Cisco Systems Inc. (Nasdaq: CSCO) and Nortel Networks Corp. (NYSE/Toronto: NT) have products on the drawing board. "They're trying to stall the RFP until their slideware becomes real," the consultant adds.

Light Reading's sources say the Photuris equipment was in trials at Verizon Communications Inc. (NYSE: VZ). Verizon was also insisting that Photuris find a partner, and there was an additional complication -- a long-term contract with Lucent for its EON product.

The same sources say trials with BellSouth Corp. (NYSE: BLS) had started in November or December of last year. Other carriers that have tested Photuris's product include WorldCom Inc. and Time Warner Inc. (NYSE: TWX).

— Peter Heywood, Founding Editor, Light Reading

dodo 12/5/2012 | 1:53:19 AM
re: Photuris & SBC: The Inside Story "I wonder where all those Lucent ex-decision makers now, as well as Nortel's, etc"

Just have to see the appointment section in the technical and engineering literature in print or over the net to see that some are still spreading their "BSes" across the industry.

Just my 2 cents
Balet 12/5/2012 | 1:53:22 AM
re: Photuris & SBC: The Inside Story I believe you answered your own question.

I wonder where all those Lucent ex-decision makers now, as well as Nortel's, etc.
Theyt should've been not only fired but imprisoned.

o-man 12/5/2012 | 1:53:30 AM
re: Photuris & SBC: The Inside Story Was is good selling be Bob, or just very, very bad procurment by Lucent.
Balet 12/5/2012 | 1:54:18 AM
re: Photuris & SBC: The Inside Story Optic_Dude:

All of your examples are pre-bubble and the world is much different now. You could be a company with vaporware products like Chromatis and get bought out for $5.4Billion. Who in their right mind would believe that is possible today?

-----

The Chromatis was sold to Lucent for about $3.75B due to exceptional selling skills of Bob Barron and ComVentures.
It looks like the same model has been working for ComVentures for very long time.
PhillipD 12/5/2012 | 2:04:45 AM
re: Photuris & SBC: The Inside Story Time for a stroll down memory lane.
What were you favorite Photuris memories?
Your favorite moment, meeting, memo, character, screw-up, whatever.
douggreen 12/5/2012 | 2:05:09 AM
re: Photuris & SBC: The Inside Story Peter,

Huaweii does compete on cost. The cost engineering and install is as important as equipment cost and in some cases more significant. I did not say it was their ONLY advantage. If the equipment didn't work and the company didn't have good engineers, people would not buy the product.

You are somewhat missing the point of the post, however. We were discussing how the barriers to a small startup pennetrating a large account. RBOC. Huawei was given as an example contrary to what I was saying. THe point of the post was to say that Huaewei doesn't fit in this category as they are a large established competitor who has a price advantage. The support from the government was not meant as a negative, but a positive. They don't have to overcome the issue of viability that startups have.

Government backing is a matter of perspective and magnitude. THeir government goes well beyond any wester government that I know. THey they also bennefit directly from currency manipulation that keeps their prices artificially low versus the dollar. I don't fault them at all for this.. they are doing what is good for their country. It's our job to do what is right for ours.

stephenpcooke 12/5/2012 | 2:05:14 AM
re: Photuris & SBC: The Inside Story That is the business opportunity...find them! All the carriers have thousands of these things just sitting out there in huts and warehouses. Sign an agreement with Nortel or Lucent or Fujitsu (the main OC12/48 players that had regens) to get their backplane and mechanical specs for those regen shelves. These are no where near state-of-the-art so I don't see why they would be terribly protective of them. Figure out how you can use them in some useful way for the carriers (or even someone else for that matter...you could buy them from the carriers, I am sure they would be more than happy to have someone take them off their hands). The carriers would see this as a cheap solution to whatever problem you solve because they have already paid off the shelves.
unet 12/5/2012 | 2:05:16 AM
re: Photuris & SBC: The Inside Story Stephencooke - can you explain this one for me - thanks

"Now you can also understand my comment in a previous post on someone finding a use for OC48 regen shelves, they are everywhere out there."

what kind of uses?
unet 12/5/2012 | 2:05:17 AM
re: Photuris & SBC: The Inside Story Seven
any reasons why 14454 is not going anywhere with RBOCs? I thought they are in race for the next wave of deployments in 2004- and beyond that I forsee happening as part of an effort to replace 1995'ish Fujitsu/Lucent/Nortel ADMs deployed. I believe they are at leat 8-10 years old by 2005 and would require replacement. Of course it is likely that the old vendors will get the replacement business in RBOC segments - but any chance some strategic alliances might shape up between vendors -
stephenpcooke 12/5/2012 | 2:05:18 AM
re: Photuris & SBC: The Inside Story unet, I can handle this one, it was my product.

Your diagram didn't translate well but I think I get the general idea. There are 2 different aspects to consider: Terminal equipment and wavelengths.

First, Nortel was the only real 1:N protection equipment provider out there. What this means is that you can share a single protection channel between N 'working' channels (in later releases you could also have extra traffic run on the shared protection channel). Incidentally, the maximum number of N in SONET/SDH terms is 14 (not 16, this has to do with the need for a protection channel and support for 1+1 systems. check GR-253).

Your diagram is correct on the deployment of regens, however. Every wavelength needed a separate regen (in Nortel's case this was an optimized set of 2 cards. We also had a smaller regen 'rack' that held 4 sets of these cards along with a processor, etc.). The only WDM that Nortel did early on was to combine 1310 and 1550nm streams onto the same fiber. Doug Green mentioned this earlier.

To give you an idea of the scale of these things, the largest 1:N network Nortel deployed was MCI's East-West route which went from San Francisco through to Chicago. I think it was extended later all the way to New York. This was a 1:11 system. There were links with up to 20 regens on each of the 12 streams between terminal sites, if memory serves. Now you can understand how DWDM and opamps made such a big impact. Now you can also understand my comment in a previous post on someone finding a use for OC48 regen shelves, they are everywhere out there.
unet 12/5/2012 | 2:05:19 AM
re: Photuris & SBC: The Inside Story Can you explain as to the Nortel's solution before the advent of WDM? does the following configuration fit what you say about margin's on Regen equipment sold by NT?

CO----OC-N(1)-----Regen1---------CO
----OC-N(2)-----Regen2---------
...
----OC-N(16)----Regen16---------

inauniversefarfaraway 12/5/2012 | 2:05:21 AM
re: Photuris & SBC: The Inside Story This sounds like a good strategy to beat the 400 pound gorilla. Juniper should take a page from their book in battling Cisco. Since Cisco never really got into completely fixing their operating system(s), even between their own platforms, it is a valid weakness that is being exploited.
dljvjbsl 12/5/2012 | 2:05:23 AM
re: Photuris & SBC: The Inside Story
b) customize products for carriers, mainly by piling engineers into software development. A good example of this is Fibernet in the UK. Huawei is supplying the core routers that Fibernet is using to offer Ethernet services. As part of this deal, Huawei has done all the integration work necessary to dovetail its network management systems with Fibernet's existing OSS - and it's done it free of charge.


And now Huawei will be faced with the cost of supporting this and other networks forever. This sounds like a good way to achieve bankruptcy.

It also sounds like selling a five dollar bill for a dollar. There used to be a furniture store who occasionally did that up here for publicity. The owner became teh mayor of Toronto but even he knew that it was only for publicity.
Peter Heywood 12/5/2012 | 2:05:24 AM
re: Photuris & SBC: The Inside Story Doug, I've been crawling all over Huawei and I don't agree with your remarks

1. Although Huawei does indeed have low prices that's not its main competitive advantage. Its main advantage is that it can field 5 Chinese engineers for the cost of 1 Western engineer - and it's using this to..

(a) work with carriers to help them improve their profits. Check out this:
http://www.lightreading.com/do...

(b) customize products for carriers, mainly by piling engineers into software development. A good example of this is Fibernet in the UK. Huawei is supplying the core routers that Fibernet is using to offer Ethernet services. As part of this deal, Huawei has done all the integration work necessary to dovetail its network management systems with Fibernet's existing OSS - and it's done it free of charge.

2. Saying that Huawei is "government backed" open to misinterpretation. Huawei is privately owned. It's actually owned by its staff, according to the company. It's "government backed" in as much as the government is supporting its international expansion efforts and has granted it $600m in export credit guarantees - ie, a way of offering very attractive financing packages to customers. I haven't checked this, but I suspect Western governments do the same thing for their indiginous telecom equipment vendors.

I'm about to go off on holiday for a week so don't expect me to be on this thread for a week or so.

Peter
douggreen 12/5/2012 | 2:05:29 AM
re: Photuris & SBC: The Inside Story Stephencooke,

At Worldcom (pre-MCI), Ciena and Nortel basicly shared the account. Worldcom ran a business and technical analysis for virtually every route, and Ciena and Nortel would compete like dogs for each route. For the most part, where there was newer fiber (NZDSF), they would deploy Nortel OC-192 and 4 channel DWDM. For most other routes that contained older fiber (which thankfully was most of them), they would use Ciena 16 channels systems. In some cases where PMD on newer fiber was an issue, they would also use Ciena. As it turns out, the Ciena systems were extremely good at handling tough PMD situations.

After the MCI merger, some of the best and brightest optical minds in the industry, from an operational and qualification perspective (IMO) from the Tulsa lab left Worldcom, which was MCIs loss.

I recall vividly the difficulty in many cases of competing against virtually "free" WDM systems from Nortel, with the margins being made up in the SONET systems. Interestingly, Ciena seems to be interested now in doing a similar thing their Optical cross-connect. It would be a good strategy, if anybody was buying any long haul equipment.
lollapalooka 12/5/2012 | 2:05:35 AM
re: Photuris & SBC: The Inside Story I seem to recall that Bush Sr. bombed some bridge in Baghdad in the first Gulf War to take out the fibers.
lollapalooka
technonerd 12/5/2012 | 2:05:38 AM
re: Photuris & SBC: The Inside Story It just occurred to me that maybe the CIA told Bush that Saddamn possessed WDM. Add a touch of dylexia, and the rest is history ...
stephenpcooke 12/5/2012 | 2:05:39 AM
re: Photuris & SBC: The Inside Story Doug,

Great post!!! You wrote:

When Ciena started, Pirelli had the lions share of the market with 4 channel systems. Lucent came out with a 16 channel system not too long after Ciena (I'm not saying that all 16 channels always worked, but the slots were there). Nortel marketed a 4 channel X OC-192 system, which competed with Cienas 16 channel X OC-48 system (same bandwidth for those who are bad at math).

If the customers were not desperate for the full 16 channels, they would have waited. If they didn't have CRITIAL issues running OC-192 on older fiber, they would have waited. AT&T waited on Lucent anyway (and then had to buy network capacity from Qwest). Sprint and Worldcom had no choice, and so they went with a startup.


I was on Nortel's MCI account team at this time. We also had to deal with the Pirelli 'footprint' in that account. This became another story of once installed, never removed. The Pirelli opamps had been pushed for by MCI and were only used as post-amps to Nortel's OC48 equipment (regens or terminals). They had no supervisory channel and pitiful monitoring capabilities to the point where, when they went down (which was frequent at that time) the only indication that the MCI operations people would see was the SONET Line & Section BIP-8's increasing downstream.

With Nortel's introduction of OC-192 and the MOR opamp with Optical Supervisory Channel (OSC, an out-of-band supervisory channel) we had the 192 terminals, OC-48 terminals and regens, and the MOR's all monitorable and controllable from Nortel's Netman platform. It sounded great, to us. MCI adamantly refused to pull out any Pirelli's for MORs even though the opex reductions were substantial (not to mention that the MOR was much more reliable and had better optical specs as well).

What finally got the MORs into MCI was a 'commercial solution' cooked up by the sales director on the account. It involved proposing to MCI that, if they bought certain levels of OC-192 equipment, we gave them 'free' MORs. As they were already planning to buy the 192 systems they didn't refuse those MORs. From that point onwards their purchasing department had a harder time justifying Pirelli purchases because of the opex savings that they were realizing with the MORs. The MCI system engineering team (more accurately referred to as the vendor managers) never admitted this of course but we saw the increase in MOR purchases anyway.

Incidentally, I don't recall Worldcom going with a startup at that time. At that time MCI and Worldcom were competing entities. Nortel had a large account team facing both carriers. As I was on the MCI account I had to fight for everything that I could get from the factory because they were always busy with Worldcom orders. It turned out that Worldcom was Nortel's biggest OC-192 account for quite some time.
PO 12/5/2012 | 2:05:42 AM
re: Photuris & SBC: The Inside Story How much of DWDM/SONET gear is configured using flow-through systems? ... [Isn't] vendor equipment provisioned using vendor's own EMS/GUI systems?

My understanding of this (and those who have the insights from having worked for the carriers will know better) is that yes, there are currently many interruptions to the flow-through process. And that this is a significant concern for the carriers.

And that the relationships between vendors and carriers are critical to success here. (Success, of course, is not just a NEP's goal. Carriers aren't a charity.) Demonstrating an ability to address the gaps in a timely manner would always be a consideration.
mordecai 12/5/2012 | 2:05:44 AM
re: Photuris & SBC: The Inside Story try searching for IBM 9729.

sgan201 12/5/2012 | 2:05:44 AM
re: Photuris & SBC: The Inside Story Hi,
In order for a startup to succeed, a lot of things have to be done right or good enough. It only take one aspect/facet of the company goes badly for it to fail..

Dreamer
Optic_Dude 12/5/2012 | 2:05:48 AM
re: Photuris & SBC: The Inside Story Absolutely wrong. Huawei tells you that price is very, very important when it comes to making a product purchase decision in 2004, not pre-bubble years.

Lacking on "cool/next-gen" features is not a big deal. Having enough features to become competitive is a given. The moment you buy your equipment it will be outdated anyway so, why get hung up on a feature geeks want you to have but customers are not willing to pay for. Expensive R&D products remain in R&D. Commercial products are widely adopted at a much lower cost paid for customers who value the features they offer.

OK
unet 12/5/2012 | 2:05:50 AM
re: Photuris & SBC: The Inside Story What is the new in NG OSS from telcordia ?
Isn't unfair to blame Telcordia if RBOCs are not willing to move to NG OSS - be it from Telcordia or from some one else.
You make an interesting point - NEP can't get past RFR without OSMINE. But assuming vendor does get entry into RBOC , are vendors obliged to complete TEMS /flow-through compliance - How much of DWDM/SONET gear is configured using flow-through systems?

Is n't that each vendor equipment provisioned using vendor's own EMS/GUI systems? How does TIRKS work ? and how does NMA pull informatoin about services/circuits and their assignment to NEs/equipemnt?
thanks
douggreen 12/5/2012 | 2:05:53 AM
re: Photuris & SBC: The Inside Story Huawei is winning becuase they are a large government-backed vendor who sells at a very low price. Observing Huawei tells you nothing about the success or failure of a startup company.
douggreen 12/5/2012 | 2:05:53 AM
re: Photuris & SBC: The Inside Story Sevenbrooks. I ran product marketing for Cienas long haud DWDM products for a while (1997-1998). I only WISHED that there were no competing products.

When Ciena started, Pirelli had the lions share of the market with 4 channel systems. Lucent came out with a 16 channel system not too long after Ciena (I'm not saying that all 16 channels always worked, but the slots were there). Nortel marketed a 4 channel X OC-192 system, which competed with Cienas 16 channel X OC-48 system (same bandwidth for those who are bad at math).

If the customers were not desperate for the full 16 channels, they would have waited. If they didn't have CRITIAL issues running OC-192 on older fiber, they would have waited. AT&T waited on Lucent anyway (and then had to buy network capacity from Qwest). Sprint and Worldcom had no choice, and so they went with a startup.

It wasn't superior technology that won. It was the fact that there was no choice at all. In fact, we later had real issues selling 16 and 40 channel systems to customers in Europe, in spite of the fact that our products were better (IMO) in almost every way (hardware, software, management). Why? Because the European carriers didn't have the same critical problems. At the time, they would rather buy from an incumbent than get a far superior product.

(NOTE: These arguements concern Ciena's early market. Both the market and competition have evolved significantly, as has Ciena.)

IMO, solving a customers critical problem is the ONLY thing that works for startups. Legacy players often ignore their customers problems because they get lazy and complacent, or because they don't think it is worth it for the potential of $50M a year. Finding that niche, where the problem is real but not on the incumbents radar is like finding gold.

I accept your point about anticipating tommorows problems to some extent. However, just as many startups fail because they solved "tommorows" problems as those who didn't solve any problems.

Actually, I get excited when everyone focuses on the future and leaves todays nagging problems alone. That's when I smell opportunity.
opticalwatcher 12/5/2012 | 2:05:53 AM
re: Photuris & SBC: The Inside Story Did a search on MuxMaster, and I see a Lightreading interview mention of it (Protiva of ADVA):

http://www.lightreading.com/do...
5514DD 12/5/2012 | 2:05:54 AM
re: Photuris & SBC: The Inside Story I believe there was a Muxmaster sold prior to the Pirelli deployment for a SAN application, connecting NJ with Manhattan. Wish I had a link to post.

But I'm splitting hairs now.
dljvjbsl 12/5/2012 | 2:05:54 AM
re: Photuris & SBC: The Inside Story

Nortel began development of DMS around 1971. DMS 10 was introduced in 1976 to wild aclaim by the independents. AT&T only entered the digital swotching market in response to the demonstrated success of Nortel (Northern Telecom then).


I buried my lead.

AT&T in its arrogance had decided that they could postpone the introduction of digital switches to the 90s even though other less important companies were developing them in the early 70s. Nortel was a quite small company then. AT&T only began development of its digital switch in the late 70s because of the earlier success of Nortel.
stephenpcooke 12/5/2012 | 2:05:55 AM
re: Photuris & SBC: The Inside Story bigpicture, Thank you, you are right (in both your posts on this topic).
romeo-foxtrot 12/5/2012 | 2:05:56 AM
re: Photuris & SBC: The Inside Story Most of the posters on this thread talking about the advent of WDM are making claims they know nothing about! Including (the?) Doug Green.

The first deployment of WDM occurred in October 1995 by Pirelli on the Sprint network. It was a disaster because Pirelli had done a poor job of building a robust manufacturable product, or a manufacturing company.

Ciena followed very soon after in January 1996, and suceeded where Pirelli failed.

Nortel didn't have a WDM product, with the MOR, until 1997. I don't count their 2-wavelength solution that they had until then, as that was not real WDM.

Lucent Bell labs did do WDM R&D prior to Pirelli & Ciena deployments, but like everything from Bell Labs there is a difference between R&D and productization, and Lucent has always been slow at the latter. Lucent WDM systems started being installed in AT&T's network in late 1996, but real in-service operation didn't start until 1997.

The IBM MuxMaster was neat box, great R&D (kudos to Rajiv!) and was actually designed for data center applications. It never really sold.

And WDM by Ciena/Pirelli did solve a major network problem, namely fibre exhaust and capacity growth, with the added benefit that it was way cheaper than the regen-based solutions being sold at huge margins by Nortel. Wide-spread WDM implementation had everything to do with introduing a disruptive new technology with major economic benefits.
bigpicture 12/5/2012 | 2:05:57 AM
re: Photuris & SBC: The Inside Story One more thing - be humble or be humbled.

BP
bigpicture 12/5/2012 | 2:05:57 AM
re: Photuris & SBC: The Inside Story Seems to me you are all in violent agreement. You are basically quibbling over pecking order. For two days you have been describing success factors:

stephenpcook - get a good account manager with good leadership skills and customer relationships. Manage the account top to bottom.

sevenbrooks - it is best to hit an untapped market with legitimate demand.

Optic_Dude - you must have a plan and compete... including price.

douggreen - clairvoyance is good.

technonerd - big ships don't notice small boats (this guy is funny!)

You can each have your opinions about what is most important. But you've shown why it is hard to be a successful start-up. You need all of them. Around here we call it "getting the planets to align".

BP

dljvjbsl 12/5/2012 | 2:05:59 AM
re: Photuris & SBC: The Inside Story
Your recollection of history is a little different than mine. The 5ESS development started in the late G«ˇ70s (not G«ˇ90s).


Nortel began development of DMS around 1971. DMS 10 was introduced in 1976 to wild aclaim by the independents. AT&T only entered the digital swotching market in response to the demonstrated success of Nortel (Northern Telecom then).

Whether or not the feature set of the AT&T competition to DMS was superior, AT&T's arrogance and miscalculations allowed Nortel to grow to be a major company.

Anyway superiority of feature sets is determined by sales not arguments.
stephenpcooke 12/5/2012 | 2:06:00 AM
re: Photuris & SBC: The Inside Story Seven said:

You can not beat a company that talks every day to its customers about solving today's problem.

Now we agree!
Optic_Dude 12/5/2012 | 2:06:00 AM
re: Photuris & SBC: The Inside Story And what problem is Huawei solving for customers that no one in the entire telecom industry can solve? And why are they winning if their products are just basic knock-offs of Cisco/others? According to your theory, they should be losing and the best product will always win. Quite the contrary here.

OD
sevenbrooks 12/5/2012 | 2:06:01 AM
re: Photuris & SBC: The Inside Story
It doesn't matter where it was invented, it matters where it was productized. Ciena was the only WDM product on the market.

Here is the next problem. Go to a customer and solve their problem. Sorry, won't work. Thats what legacy players do.

Startup have to project where problems will occur 2 - 3 years from now. And develop solutions based on trends. If they are lucky, the problem develops and they win. Else, they fold.

You can not beat a company that talks every day to its customers about solving today's problem. You have to anticipate tomorrow's problem. The reason that there is lots of risk is the weatherman problem. People predicting the future are generally wrong. On occasion they are right. Thats when a startup wins.

seven
5514DD 12/5/2012 | 2:06:02 AM
re: Photuris & SBC: The Inside Story Next time I see him I'll pass that along.

Besides, the Muxmaster was one of the cooler product names I've ever seen.
PO 12/5/2012 | 2:06:04 AM
re: Photuris & SBC: The Inside Story Regarding the rollout of the 5ESS & 1AESS & DMS-100 & DMS-250, there were three other little letters which also played a pretty important role at the time: MFJ.
Optic_Dude 12/5/2012 | 2:06:05 AM
re: Photuris & SBC: The Inside Story Then I guess Paul Green can sue Lucent for false claims. This is taken right from a Lucent press release:
"The DWDM technique, invented at Bell Labs, makes it possible to send multiple streams of information down the same optical fiber. "

OD


Ciena did not invent DWDM, it was invented back in 1995 by Bell Labs.

I think Paul Green and the folks at IBM would take offense to that...
5514DD 12/5/2012 | 2:06:06 AM
re: Photuris & SBC: The Inside Story Ciena did not invent DWDM, it was invented back in 1995 by Bell Labs.


I think Paul Green and the folks at IBM would take offense to that...
technonerd 12/5/2012 | 2:06:07 AM
re: Photuris & SBC: The Inside Story RBOCS are suffering from mismanagement. The slow down in the network will take years to burn off. Executives are frozen out of change. New technology and solutions are a no no for fear of failure.
This reminds me of a conversation I had with a guy who was on the board of one of the leading data CLEC frauds. He told me that the RBOCs would never know what hit 'em. He was right, but not in the way he meant it.
jim_smith 12/5/2012 | 2:06:08 AM
re: Photuris & SBC: The Inside Story One more thing. Make sure you find a problem that the service provider already has. If he or she is already laying awake at night worrying about how they will solve the problem you solve, you've got it right. If you have to explain the problem to them before you can explain your solution, then R.I.P. along with the majority of other startups that fail.

That is a good strategy, but since developing a good product can take a few years, an even better one is to anticipate problems. Anticipating problems that arise due to "scaling up" are not that hard.

Find a new service that is selling rapidly and solve the "scaling up" problem for that. That way you will have a solution exactly when the service provider figures out that there is a problem.
stephenpcooke 12/5/2012 | 2:06:09 AM
re: Photuris & SBC: The Inside Story Well said Douggreen!!!
douggreen 12/5/2012 | 2:06:11 AM
re: Photuris & SBC: The Inside Story Ciena did not win Sprint and Worldcom because they had a better technology, or because nobody else had a DWDM productat (they did). THey won because their solution as a whole sovled a burning issue that nobody else solved.

Everyone got caught with their pants down when data hit the fiber network that was built for voice. The earlist deployers of fiber got hit the worst..Sprint and Worldcom. These guys didn't neccesarily WANT to buy from a startup. Lucent's product didn't work very well at the time, and Nortel's only worked well with their own ADMs. Even so, if the IXCs could have waited for others to catch up, they very well might have, but they couldn't.

The message is this: Forget technology for a minute. Find a burning issue that the service provider has that is being ignored. Pick a problem that is hard to solve, and one that requires real innovation so the big guys can't quickly copy it. Make it a niche, and focus very hard. Then apply the best technology you can to solve that problem (yes, technology is important).

One more thing. Make sure you find a problem that the service provider already has. If he or she is already laying awake at night worrying about how they will solve the problem you solve, you've got it right. If you have to explain the problem to them before you can explain your solution, then R.I.P. along with the majority of other startups that fail.
sevenbrooks 12/5/2012 | 2:06:11 AM
re: Photuris & SBC: The Inside Story
Stephen,

Sheesh, get over it. You asked me whether I thought Ciena was unique. Lets see was it 100% different than everything else out there? Yes, it was.

But the point is, why fund something thats a me too. Oh well, the CUSTOMER could consider it unique. Well guess what they are not stupid. They can tell unique from not unique. Lets apply a simple test.

Question - Does this product have competition?

Answer 1 - Yes, there are 5 other products that do similar things (not unique).

Answer 2 - No, I will have to solve this problem a different way (unique).

Now the customer can determine if there is VALUE to the uniqueness. In the past (and is continuing today) only a few unique items have value. Those that do succeed. Those that don't fail.

Now if you go back to the not unique answer, then its a much harder proposition. You have to be able to match the entire offer of an incumbent player. Thus, you are asked to "partner" because as a standalone a startup can't match these non-product capabilities.

Finally relationships, they open doors and get hearings. But thats about it. Show up with a better product and you get somewhere. Show up with a way of saving LOTS of money, you get a whole lot further.

The problem with the Metro WDM and SONET startups is that they fall in the not unique category. So, they are asked to partner. What's the next unique technology? I don't know, and if I did know I sure wouldn't tell you guys. But here is a rule of thumb, if its obvious everybody will do it.

seven
Optic_Dude 12/5/2012 | 2:06:12 AM
re: Photuris & SBC: The Inside Story I guess the tremendous success of Huawei is just a figment of my imagination? Reason they are crushing their competition is PRICE, get a clue and maybe you will not design a science project no one wants to buy. Basic competitive features are a given but PRICE is paramount.

OD
stephenpcooke 12/5/2012 | 2:06:13 AM
re: Photuris & SBC: The Inside Story Seven, you wrote:

If you can't tell the difference between the truly novel and not truly novel, then I suggest you don't do startups.

I guess you have missed the point once again. I'll try one last time. It doesn't matter what you think or I think is novel. It only matters what customers think and what they are willing to pay for. If everyone on these boards, other than those in carriers with purchasing power (who probably aren't on these boards), agreed that some new product was novel or unique or innovative or (put your adjective here), it has no bearing on whether any given customer will buy it or not. In our society we generally consider having customers buy your product as success. If they don't you are bankrupt. What customers will pay for is king, not fancy technology, however it is described.
truelight 12/5/2012 | 2:06:14 AM
re: Photuris & SBC: The Inside Story RBOCS are suffering from mismanagement. The slow down in the network will take years to burn off. Executives are frozen out of change. New technology and solutions are a no no for fear of failure.
Stevery 12/5/2012 | 2:06:16 AM
re: Photuris & SBC: The Inside Story Nope, it helps but only works if you have a unique product. Look at Cerent. Ron Martin is there and they can't sell the 14454 to an RBOC. Right relationships? They don't hurt anything but don't make anything really change. The product does.

Guys, it's both. If you have Jesus himself doing your sales, but he's selling 1ESS, its a no sale.

If you have some Average Plain Joe selling the best technology on the planet, it's a no sale.

If you have both great relationships & great technology, then you stand a chance. But luck is still in the picture.
sevenbrooks 12/5/2012 | 2:06:17 AM
re: Photuris & SBC: The Inside Story
Nope, it helps but only works if you have a unique product. Look at Cerent. Ron Martin is there and they can't sell the 14454 to an RBOC. Right relationships? They don't hurt anything but don't make anything really change. The product does.

seven
Optic_Dude 12/5/2012 | 2:06:18 AM
re: Photuris & SBC: The Inside Story If I was an RBOC/large carrier, I am interested in buying equipment for 2 purposes:
1) To grow my existing network and/or update old, outdated equipment
2) Offer services/features I did not have before

For #1, I want to use my existing supplier base because of installation ease, existing pricing leverage, accounting hassle, etc. Adding another supplier does nothing but complicate and drive someone insane.
For #2, I want to pressure my existing supplier to develop these features they do not currently offer. I do this by leveraging outside suppliers based on price and or features. If I have a horrible relationship with my current supplier, and I want my existing supplier out, then there is an opportunity for another startup. Political issues are also serious here because removing another supplier’s equipment is a no-no for someone’s career. Adelphia did this by removing Corvis and eventually threatening to remove Lucent and I’m sure someone at Adelphia got into trouble.


WHY CAN RBOC’S DO THIS, BECAUSE IT IS A BUYER’S MARKET!

It’s fun to get excited about new features, but at the end of the day it comes down to price. You can make the same argument about software companies in telecom just offering different product versions of each other. And telecom is saturated everywhere with competition, why would 300,000 lose their jobs and leave the industry if this was not true?

All of your examples are pre-bubble and the world is much different now. You could be a company with vaporware products like Chromatis and get bought out for $5.4Billion. Who in their right mind would believe that is possible today?

There has been very little innovation in this industry for 10 years so, stop thinking there are novel products out there because I have yet to see any of them. But read any startups (hardware or software) business plan and they will tell you that they are unique and novel for several reasons.

Ciena did not invent DWDM, it was invented back in 1995 by Bell Labs.

And no, I do not work for Lucent or any other transport product maker.

OD
bigpicture 12/5/2012 | 2:06:19 AM
re: Photuris & SBC: The Inside Story >SBC picked Redback without Nortel. There were ex-Pac Bell folks in Redback.

Seven - you are proving Stephen's point. You don't get into the RBOC without a relationship and good account management.

For what it is worth, I agree with you that start-ups who find new (legitimate) product segments have a better chance of success, rather than incremental improvement. But with RBOCs, relationships rule the day.

BP
sevenbrooks 12/5/2012 | 2:06:21 AM
re: Photuris & SBC: The Inside Story
SBC picked Redback without Nortel. There were ex-Pac Bell folks in Redback.

But thats the point. It can be done. Not with me too startups. How many times can we put the PMC or Broadcomm chipsets on a PCB and call the products new and unique?

For Redback it was off the shelf Hardware with a unique SW idea.

For Pairgain it was DSP coding for a specific type of copper loop.

For Ciena it was Physics in the Optical Domain.

There are others, but they are actually few and far between. Lets use Cerent as an example. Cisco got this product into all the major bubble buildouts because they were Cisco. But, what does everybody think of the 14454 revenue today? $20M/Q, $50M/Q (my guess), or $100M/Q? What would they have done in this business without the bubble?

seven
NoKoolAid 12/5/2012 | 2:06:21 AM
re: Photuris & SBC: The Inside Story The Telcordia OSSes you mentioned are a mesh (polite word) of O$$es for legacy TDM equipment with some enhancements for "new" technologies like Ethernet but the enhancements only go so far. Telcordia has "next gen" OSSes but they aren't widley accepted by the RBOCs.

What's a RBOC-targeted NEP to do since they can't get past the RFP process without stating OSMINE compliance? They go for the least common demoninator: TIRKS and NMA and rely on time to sort out the issues of flow through (i.e. Telcordia Next Gen or home grown or other).

It's not waisted money. When you go through OSMINE, TIRKS is used to develop a model. Other Telcordia OSSes like NMA use this model. NMA is similar to SMARTS or NetCool alarm collection. It's flexible like NetCool in that it support multiple interface types.
wilecoyote 12/5/2012 | 2:06:22 AM
re: Photuris & SBC: The Inside Story As for Pairgain, it didn't hurt that they had MIke Pascoe, who was gracious enough not to lie on his resume (or even inflate it--he's too classy to do bother). Mike was an ALA guy and the carriers respected him, knew he was for real and wouldn't try and sell them a POS, unlike 90% of the startup CEOs of the 90s, who were a bunch of BS artists and posers.

bigpicture 12/5/2012 | 2:06:24 AM
re: Photuris & SBC: The Inside Story >You are both so wrong its unbelievable.
>
>How about the following two startups: Pairgain >and Redback.
>
>Both got deployments without partners, as >startups with RBOCs.

Seven - did you know that the only way Redback got into Verizon was through Nortel? My understanding is that in 1998&9 a large portion of Redback's revenue came through Nortel prior to Nortel's acquisition of Shasta.

In my opinion getting into Qwest in 1999 as a start-up wasn't that hard. Especially if you had KP as a VC.

You might want to pick a different example.
BP
sevenbrooks 12/5/2012 | 2:06:25 AM
re: Photuris & SBC: The Inside Story
Stephen,

Ciena had a unique technology. Wave Division Multiplexing. This technology was not used as a transport technology but an enhancer of fiber usage without construction. Nortel, Siemens, ya da ya da ya da did not have WDM technology. So, Ciena found a place and a customer (backbone at Sprint first then MCI) that needed this technology. There was competition only from different technologies.

So, lets roll forward. Photuris builds a mixed SONET and WDM product. Many people make those. They may not be as good as Photuris (or they might be better), but its a product category with many large suppliers. So, Photuris has no way of getting in except through "partnership" with a large supplier (which at the end of the day only makes sense in an M&A strategy - OEMs last till the big guy can dupe your product).

That is why startup odds are so long. You need to be going a path different than others. You need a unique concept. Some of those concepts succeed (Pairgain, Redback, Ciena) some fail. Once they have succeeded, the next challenge is convert a company that is in essence a product (riding a product life cycle) into a company that is an ongoing business. That is a separate challenge.

So, Ciena was nothing like the ongoing transport businesses. Photuris is a bit better than others (maybe). If you can't tell the difference between the truly novel and not truly novel, then I suggest you don't do startups.

seven
rabbitrun 12/5/2012 | 2:06:26 AM
re: Photuris & SBC: The Inside Story Your recollection of history is a little different than mine. The 5ESS development started in the late G«ˇ70s (not G«ˇ90s). BUT, the 1AESS was a cash cow so business features were withheld until the late G«ˇ80s to keep it from eroding the 1AESS ROI.

The DMS-100 was first deployed in PacBell by a rouge VP in the LA LATA. Within one year of K-date that VP took retirement and became an NTI employee. Another dynamic that was occurring at that time was the RBOCs wanted to flex their muscle and show their independence from Mother, which meant shunning Bell Labs products.

As far as quality the 1AESS was demonstrateably superior in features to the DMS-100 until BCS-32 (~1992). The idiots at Bell only considered features not perception (analog was old, out moded). They have always been ignorant marketers and still are.

Bell Labs really screwed up with the Tandems. Again the folks who had P&L for the 4ESS artificially kept tandem functionality from the 5ESS in the early G«ˇ80s, because it was in a different department and different Executive Directors. This allowed the DMS-250 to take over the Access Tandem market in the RBOCs. And no self-respecting IXC (e.g. MCI and Sprint) would buy from AT&T/Bell Labs in the G«ˇ80s.

How does this help startups? Not sure except to point out that significant changes such as analog versus digital does sell. The reality was not in the features, but in the perception of reality.
rbkoontz 12/5/2012 | 2:06:26 AM
re: Photuris & SBC: The Inside Story "How would you have counselled Ciena given that Nortel, Lucent, Fujitsu, Alcatel and Siemens had 'transport' products already deployed in RBOCs/PTTs at the time?"

Stephenpcooke,
Yes long haul transport was an underserved market. But how much of CIEN's business is from the RBOCs? Even today its probably less than 20%! CIEN did not even win in the RBOCs, they won in the IXCs and during the bubble period - companies that will never return to health and times that will never repeat if we are lucky.

The telecom bubble caused not just overinvestment but also too many unqualified people to enter this industry.

RedRiver 12/5/2012 | 2:06:30 AM
re: Photuris & SBC: The Inside Story "If any of the companies that you listed had more than chartware why do you think Photuris got so far in the process being a 'transport' startup?"

So Far? How far did they get? They are out of business having never made a sale.
stephenpcooke 12/5/2012 | 2:06:31 AM
re: Photuris & SBC: The Inside Story Hi Seven,

You still haven't answered my question:

How would you have counselled Ciena given that Nortel, Lucent, Fujitsu, Alcatel and Siemens had 'transport' products already deployed in RBOCs/PTTs at the time?

I guess it comes down to the definitions of things like 'transport' and 'different' and how much 'differentiation' is necessary to make a difference and who gets to decide? Please explain how you measure '10% better' and at what level of differentiation, and how you would measure it, that you feel is sufficient for a startup to succeed.

If you were to ask every startup that ever existed they would claim to have a 'unique' product. Who judges whether a product is 'incremental' or 'unique' or two products from different manufacturers are the 'same'? The answer is the customer, not you or I. If the customer decides that they don't need all the nice features of an incumbent's product then 10% worse might be the right answer provided there was an associated 'difference' in cost.
lollapalooka 12/5/2012 | 2:06:32 AM
re: Photuris & SBC: The Inside Story Folks,
One of seven's hot buttons seems to have been pushed.
But seven does have a point.

Trying to make something different in an environment where development costs are high, timelines are long, but if you win margins make it worth it is a difficult proposition.

Does ODSI ring a bell with anyone?
How about mesh networking?
Selling only into greenfield networks?
All optical?
Optical switching?
All big attempts. All best efforts.

But is the thinking on target?

What became popular?
Narrowband messaging: IM, text messaging, blackberries, and the like.

What companies drove what became popular? Did it matter?

A peripheral question is not how to forsee what the next big thing will be, but how to have a product that enables the next big thing somehow.
How will it address scalability, how rapidly can it be adopted? What is the learning curve for carriers?
Comments?
lollapalooka
sevenbrooks 12/5/2012 | 2:06:34 AM
re: Photuris & SBC: The Inside Story
Sandeepkc,

They can be floated but there is no evidence that they will succeed.

Let me restate, they are even riskier than those that have something new to offer.

seven
sgan201 12/5/2012 | 2:06:34 AM
re: Photuris & SBC: The Inside Story <<there a="" also="" and="" arrogant="" be="" both="" can="" certain="" company="" concerned="" customers="" dealing="" dislocation.="" do="" giants="" in="" industry="" internal="" it="" marketing,="" more="" much="" new="" on="" opportunities.="" own="" politics="" requires="" scenarios="" seem="" smaller="" take="" technological="" technology="" than="" that="" the="" their="" to="" which="" win.="" with="">>

Hi dijvbsl,
Isn't now a perfect time??

1) Industry giant are arrogant in both technology and marketing

2) Emerging of new customers.

3) Technological dislocation...

Dreamer</there>
sandeepkc 12/5/2012 | 2:06:34 AM
re: Photuris & SBC: The Inside Story So the question becomes:

Should a startup be floated if they have nothing new to offer? What happens to entrepreneurship and creative ideas (research, there is only one bell labs and most of the products in telecom are mere enhancements to the first phone made) to make the world a better place?
dljvjbsl 12/5/2012 | 2:06:35 AM
re: Photuris & SBC: The Inside Story
... Startups simiply cannot succeed in established RBOC markets. They must sell out before they are squeezed to death. This history has repeated itself repeated ...


Before Nortel hit it big with DMS, it was an obscure division of Bell Canada. The joke was that Nortel's (then Northern Electric) R&D divsion consisted of an eraser and a rubber stamp. R&D consisted of erasing the 'Western' on Western Electic schematics and replacing it with 'Northern.'

AT&T had decided that digital switching was not needed until the 1990s. Only a few upstarts like Vidar and Nortel were developing in the new field. Nortel introduced DMS 10 to an immediate success. AT&T was years behind Nortel in the technology and could not develop a switch of similar quality. Nortel developed into the giant that it is today. AT&T was a major cause of this.

There do seem to be certain scenarios in which a much smaller company can take on the industry giants and win. It requires that the giants to be arrogant in both technology and marketing, and more concerned with their own internal politics than dealing with their customers and new opportunities. It also requires a technological dislocation.
sevenbrooks 12/5/2012 | 2:06:37 AM
re: Photuris & SBC: The Inside Story
Lets see 10,000 line phone company stepencooke. How many OC-48 rings they buying 100 - 200 - 1,000,000?

How bout 0!

So, close is still no cigar. Transport startups, dead. Lets count them....wait all dead.

Hello, do something DIFFERENT. Do something others are NOT doing. That is the idea of the startup.

Doing something 10% better than the other guy is the land of the legacy player (please go get a big brother startup). Was Redback asked to get a partner? How bout Pairgain? Ciena? Nope, nope and ummm Nope. They could sell to Tier 1 carriers because they built unique products. Now lets use another startup that tried the same thing (with a product that has been MASSIVELY successful) Optilink. Please get married to DSC!

See how this works? Startup, unique technology go to market. Startup, incremental technology better get bought. Otherwise hasta la vista baby.

All these transport startups made the same product. And they were all wonderful and worked and did marvelous things. 10% better than the legacy players. So, why did VC's fund them? Because in the hey day ALL these companies were getting bought whether the product worked or not. Now there is nobody to buy them and no reason for them to hang around.

seven
rbkoontz 12/5/2012 | 2:06:38 AM
re: Photuris & SBC: The Inside Story I could not agree more with SEVEN. The only reason an RBOC would "toy" with a start-up in an established space like transport is to use them as a club to get their existing vendors to drop price or develop features. Believe me, I've been there.

The best possible outcome for Photuris in this case would have been if they could land a trial and limited deployment in SBC. Meanwhile, SBC gets their big vendors to commit to the features and price they want. Three years later, Photuris has achieved 5% market share within their niche market. The cost of servicing an RBOC without hundreds of millions in total revenue will cripple any company. If Photuris management was experienced, they would realize this, limit their investment in the RBOC account, and use the RBOC "win" to prop up their valuation and secure more funding. Best case is they find a way to make money in alternate metro carriers such as IXCs. Finally, sell out to a big incumbent vendor for a modest valuation.

Startups simiply cannot succeed in established RBOC markets. They must sell out before they are squeezed to death. This history has repeated itself repeated - beginning with Optilink in the early 90's.
unet 12/5/2012 | 2:06:39 AM
re: Photuris & SBC: The Inside Story What is exactly NMA and how does it compare with SMARTS or NetCool ?
TIRKS - any one familiar with architecture and its other pieces - MARCH,SOAC, LEFACS?
TEAMS - why provisioning has not been chosen by major vendors - wouldn't that give complete flow-through support . Without TEAMS - how does equipmen assignment to services get into NSDB/TIRKS and how does NMA provide service monitoring -
there seem to be lack of information on Telcordia OSS as a whole or is it just me who is not aware of these products?
stephenpcooke 12/5/2012 | 2:06:42 AM
re: Photuris & SBC: The Inside Story Seven, you wrote:

You are both so wrong its unbelievable.

and

Problem with big Transport solutions at "smaller Telcos". Lets see How many OC-48 WDM devices does Three Rivers Telephone require?

Works great for some classes of product but not transport.


So, we are unbelievably wrong in the case of transport but great for other classes of product? Smaller telcos still need transport to a certain degree (eg: collector rings, ADMs, etc.). I would generally agree with you that smaller telcos would not be interested in the DWDM, LH or ULH equipment.

You also wrote:

Transport Startups are a waste of time. Stop making them they will ALL fail. Nortel, Lucent, Alcatel, Fujitsu, Cisco and Ciena are all there. Your product improvements are minimal over the existing products.

If any of the companies that you listed had more than chartware why do you think Photuris got so far in the process being a 'transport' startup? I agree that, in general, the amount of technical differentiation has to be substantial in the 'transport' market segment to make any startup even remotely successful.

We have discussed many reasons why Photuris may have failed. If SBC let them get to where they did they must have had something significant. Mike Pepe is generally too busy to mess with someone who has something that is not interesting and he will generally tell you so. On the technical side, if any of those companies that you listed had some believable chartware for a product that would address the RFP adequately, it would provide yet another reason why Photuris couldn't find a serious partner (ie: the Nortel or Lucent or Cisco development plans were too far advanced to stop and bring in an acquisition or partner candidate).

How would you have counselled Ciena given that Nortel, Lucent, Fujitsu, Alcatel and Siemens had 'transport' products already deployed in RBOCs/PTTs at the time? If Ciena could succeed in the 'transport' market against seemingly impossible odds, why couldn't Photuris? Sorry, this is the VC mantra which must be taken with a boatload of salt. I guess the definition of 'transport' is getting broader and broader?
sevenbrooks 12/5/2012 | 2:06:45 AM
re: Photuris & SBC: The Inside Story
I guess your missing my point.

Transport Startups are a waste of time. Stop making them they will ALL fail. Nortel, Lucent, Alcatel, Fujitsu, Cisco and Ciena are all there. Your product improvements are minimal over the existing products.

Go do something else that has a chance of success.

Something actually new.

That is what succeeds.

Clear enough?

seven
rabbitrun 12/5/2012 | 2:06:46 AM
re: Photuris & SBC: The Inside Story Agreed. You don't have to go through OSMINE to get "TIRKS" certified, just get some CLEIs and bar codes. NMA-F has multiple operating modes - dumb and dumber. It's not clear which one they interoperate with. Without TEMS there is no flow through.


Optic_Dude 12/5/2012 | 2:06:47 AM
re: Photuris & SBC: The Inside Story Duh, last time I checked, Photuris was a transport product. And these type of products have to deal with legacy systems even when carriers add overlay networks.

OD
sevenbrooks 12/5/2012 | 2:06:49 AM
re: Photuris & SBC: The Inside Story
Of course, if you actually read this announcement Peter they did Tirks and NMA. They did not talk about TEMS support or whether they have bought into the WDM consortium. One would expect that Nconn or TEMS or both might be required before any deployment occurs.

seven
sevenbrooks 12/5/2012 | 2:06:49 AM
re: Photuris & SBC: The Inside Story
You are both so wrong its unbelievable.

How about the following two startups: Pairgain and Redback.

Both got deployments without partners, as startups with RBOCs. Why? Because they were not in a space where there was existing competition. Ciena - same thing. Problem is the startup guys tried to become the R&D arm of established companies and went into established spaces. This is not the way things used to be. These startups should fail, irregardless of whether they built a working product.

Problem with big Transport solutions at "smaller Telcos". Lets see How many OC-48 WDM devices does Three Rivers Telephone require?

Works great for some classes of product but not transport.

seven
Peter Heywood 12/5/2012 | 2:06:54 AM
re: Photuris & SBC: The Inside Story Tropic has announced Osmine compliance today:

http://www.lightreading.com/do...
stephenpcooke 12/5/2012 | 2:06:55 AM
re: Photuris & SBC: The Inside Story Well said Optic_Dude!!! You are exactly correct in my opinion.

I would add one thing though. Potential customer selection is all-important here. Yes the RBOCs are attractive as a single deal might make the company the rising star, but this is entirely unlikely with consequences on both the RBOC and startup side (see OD's previous post). Try to pick a more progressive, smaller telco with big ideas and try to help them with those ideas. Who knows, maybe that smaller telco will be acquired by an RBOC and you have just won the lottery.
Optic_Dude 12/5/2012 | 2:06:56 AM
re: Photuris & SBC: The Inside Story The problem in telecommunications compared to other industries is that new products must also support all of the old legacy crap. Since greenfield companies like Global Crossing are virtually non-existent today, legacy will remain a nightmare. As long as that mindset/culture continues, I see a very difficult road for small startups.

Conclusion: Big Companies like doing business with other Big Companies. Photuris sends a clear confirmation to RBOC&#8217;s considering how easily they folded after losing the potential contract. What happens if SBC selected Photuris and there were product problems? Photuris could not afford to recall/fix/resolve them and would go bankrupt anyway (assuming they do not get paid until much later, which is typical for big carriers). High risk decisions like that are not good decisions for risk adverse RBOC&#8217;s.

So, if you are a startup, find a legitimate partner that compliments you, is willing to share/support revenue opportunities and vice versa. Or find someone that you can OEM your product to otherwise, kiss the hope goodbye.

OD
sevenbrooks 12/5/2012 | 2:06:56 AM
re: Photuris & SBC: The Inside Story
It says something very simple.

It is very hard to bring a startup into an existing space. This includes startups with unique technology plays and with working products. Its easier to make a hit in a new or underserved space.

seven
b_40 12/5/2012 | 2:07:00 AM
re: Photuris & SBC: The Inside Story Should Photuris' failure be considered specific to Photuris, one about failed strategies or management stumbles or fickle VCs, or should it be considered a "sign of the times"?

In other words, if Photuris apparently had much going for it in the product department, but still disappeared, what does that suggest about the prospects of other startups in this space, and in neighboring spaces?
dodo 12/5/2012 | 2:07:01 AM
re: Photuris & SBC: The Inside Story Stephen

Knowing how Childers can use his network, I won't be surprised to see him back in a Canadian company- working for Allstream e.g.

Some of the ex-BCE senior mgmt have got "tenacles" in IXCs and Service providers and the ex-CMO from Nortel knows also some VCs in Toronto.

He will manage to land on his two feet but I am eager to see how he will fudge his stint at Photuris-getting his product in Verizon !!!!!!!!

One interesting note: Quite a few losers from the Nortel pyramidal VP echelon are claiming billions of revenues on their watch during the bubble years and , if one has the patience of tallying their performance from their bios, Nortel would have to reassess its results :-)
stephenpcooke 12/5/2012 | 2:07:04 AM
re: Photuris & SBC: The Inside Story Yup, that's my name. I've been around the block a few times in many disguises. If people don't like what I/we have said they are free to ignore any or all of it. I just hope that I don't have to sell against any of you once I get a job.

Incidentally, I am sure that most readers have noticed that there are several posters in this thread who have given a very accurate picture of the other side of the table (ie: carriers) during the sales process. What I have said is possibly useful but what they have said is much more important because they are the people you have to convince of the usefulness of your product.

Peter got that bio of Charles Childers from the Photuris website. Having worked on one of Nortel's account teams prior to 2000 I laughed out loud when I read it as well. Unfortunately many laid-off people are using similar tactics on their resumes so the job market is not a nice place these days. How many HR people do you know that would have read his bio and had the same reaction that you and I did? How many headhunters would have cared? He got hired is all that mattered to him then. It will be interesting to see how his bio changes to cover his stint at Photuris next.
oc-infinity 12/5/2012 | 2:07:05 AM
re: Photuris & SBC: The Inside Story A correction to my previous post below. Childers was fired by Dunn, not Roth (but in exactly the circumstances described below).

* * * * *

The posts on this message board are great! Stephen Cooke is doing a great job summarizing the TRUE REALITIES of large account management (I hope that is not his real name, as some supposedly experienced people will probably not like to sage advice he is proposing).

To Peter Heywood,

I laughed when I read your posted bio of Charles Childers. Of course the guy would only promote himself as a star.

I worked at Nortel while he was there, close enough to see some of his performance from the periphery. First of all, he was a good communicator, but was also a political benefactor of the Chandran-Schilling clique of poilitical brown-nosers. Know what people want to hear, then say it well.

He did (tried to do) things several times in account stratey that appeared completly clueless, including ridiculous price discounts (without even the account team's support or knowing whether price reductions were required to win), pissing off mid-level managers at customers by walking over their heads without any support from the Nortel account team or in the account, and even once offering to provide Nortel's latest optical gear to a competitor for interoperability evaluation.

The story I heard on how he left was that he went to Roth in early 2001 saying something along the lines of "I've been in my role for a while but I need to progress my career - so we need to talk about next steps for me", and Roth replied along the lines of "Nortel is tanking right now and needs to go through major re-structuring, and you're only concern is your career!" whereupon he fired Charles on the spot! I got this 2nd hand, but from 3 people so it must be generally accurate.
PO 12/5/2012 | 2:07:06 AM
re: Photuris & SBC: The Inside Story I got this 2nd hand, but from 3 people so it must be generally accurate.

Given the announcements on restatement of results, I've gotta wonder if Nortel's accounting team was operating on that principle <grin></grin>
oc-infinity 12/5/2012 | 2:07:06 AM
re: Photuris & SBC: The Inside Story The posts on this message board are great! Stephen Cooke is doing a great job summarizing the TRUE REALITIES of large account management (I hope that is not his real name, as some supposedly experienced people will probably not like to sage advice he is proposing).

To Peter Heywood,

I laughed when I read your posted bio of Charles Childers. Of course the guy would only promote himself as a star.

I worked at Nortel while he was there, close enough to see some of his performance from the periphery. First of all, he was a good communicator, but was also a political benefactor of the Chandran-Schilling clique of poilitical brown-nosers. Know what people want to hear, then say it well.

He did (tried to do) things several times in account stratey that appeared completly clueless, including ridiculous price discounts (without even the account team's support or knowing whether price reductions were required to win), pissing off mid-level managers at customers by walking over their heads without any support from the Nortel account team or in the account, and even once offering to provide Nortel's latest optical gear to a competitor for interoperability evaluation.

The story I heard on how he left was that he went to Roth in early 2001 saying something along the lines of "I've been in my role for a while but I need to progress my career - so we need to talk about next steps for me", and Roth replied along the lines of "Nortel is tanking right now and needs to go through major re-structuring, and you're only concern is your career!" whereupon he fired Charles on the spot! I got this 2nd hand, but from 3 people so it must be generally accurate.
rabbitrun 12/5/2012 | 2:07:07 AM
re: Photuris & SBC: The Inside Story You said, "Other terminology gives strong hints, but not direct answers, to behaviors: if a customer says they're risk averse, are they unwilling to be the first customer to deploy a technology? Or do they simply need to know that the support systems they may need are all in place?"

Both are correct. SBC has an internal cultural belief of being "fast followers". And yes, the RBOCs will not deploy until all systems are in place - BSS and OSS. They do have the concept of "CE-1075" and technology trials, but those are short term pre-production processes, which must be disconnected after three months. And they don't guarantee production deployment - just ask Riverstone.

When I worked at Bell Labs (circa 1983) I was not allowed to use a certain vendor's component because it would have accounted for more than 10% of their annual revenue. This conservatism is a deeply rooted cultural mindset going back to Mother.

An MBA type story. The RBOCs are not the only "fast followers". GE Medical systems is notorious in waiting for innovative companies to develop a market and then use their market dominance (e.g. sales channels) to take that market over. It's a very powerful and common business practice when you have market dominance.
PO 12/5/2012 | 2:07:09 AM
re: Photuris & SBC: The Inside Story So many excellent posts. Just a few comments from another developer.

Partnerships flow from the river of business: the money. If your VCs have the correct partnering relationships then their board representatives are doing more than second-guessing corporate execution. (This can, of course, also shut out competitor alignments as time goes on.) If the company hasn't achieved the right mix here, then the investors need to recognize what they'll have to give away to bring that partnership together.

Think Cisco with its VC arm. Think Celtic House and Alcatel's largest shareholder.

I, of course, have no idea why Photuris went to the dance alone (and left broken-hearted). But it's always possible for a board to expect more of an executive team than they can reasonably deliver -- and therefore not be willing to pay the price to fill the holes. And for an executive team to not manage their board accordingly. Could all the players have oversold what they bring to the table, and nobody called the other side out to avoid being called out themselves?

Then, as has been pointed out so well, you need an understanding of how the customer works and what he needs (which is not always what he says, although you need to manage any gaps very carefully). You need to know what will happen when. Sales, it's been said, is about relationships first and foremost.

Other terminology gives strong hints, but not direct answers, to behaviors: if a customer says they're risk averse, are they unwilling to be the first customer to deploy a technology? Or do they simply need to know that the support systems they may need are all in place?
Peter Heywood 12/5/2012 | 2:07:19 AM
re: Photuris & SBC: The Inside Story Discussions on this board prompted me to wonder what people think of their CEO in general...so I created this poll to find out:

http://www.lightreading.com/em...
BBBoa 12/5/2012 | 2:07:21 AM
re: Photuris & SBC: The Inside Story DarkWriting wrote:

>......can anyone recommend an ethical company >that is hiring.....

Have you looked at www.overturenetworks.com ??
I know they're growing and likely hiring.

Good luck.
stephenpcooke 12/5/2012 | 2:07:21 AM
re: Photuris & SBC: The Inside Story Peter,

See http://www.lightreading.com/bo...

for more discussions on this topic. I still can't see the case for VOIP in the RBOCs if it isn't to avoid the regulatory environment that they are in for regular voice circuits.
stephenpcooke 12/5/2012 | 2:07:22 AM
re: Photuris & SBC: The Inside Story Peter,

I think most people in this industry familiar with OSS's would emphatically agree. These ideas/opinions have come up before on these boards.

See http://www.lightreading.com/bo...
Peter Heywood 12/5/2012 | 2:07:24 AM
re: Photuris & SBC: The Inside Story Some OSMINE background:

http://www.lightreading.com/do...



Peter Heywood 12/5/2012 | 2:07:24 AM
re: Photuris & SBC: The Inside Story Nobody else is regulared and taxed the way the RBOCs are. Honestly, I think the government will never let VoIP get very far until they can figure out a way to tax it the way we're taxed for our RBOC local service. And the "regulated/unregulated" structure is a nightmare. As an example, even if it was a perfect solution for a problem, it's almost impossible for SBC to offer a packet-over-SONET solution, because the unregulated "packet" side of the company has nothing to do in form or function with the regulated "legacy" side.
Peter Heywood 12/5/2012 | 2:07:25 AM
re: Photuris & SBC: The Inside Story A good chunk of their VPs came up through the ranks. Notebaert's one of the few guys with that career path that seems to have the willingness to consider any approach different than what they did 20 years ago. Of course, in Notebaert's case, that approach usually involves laying off mass quantities of employees and alienating a good chunk of whomever is left, but that's another topic.
Peter Heywood 12/5/2012 | 2:07:25 AM
re: Photuris & SBC: The Inside Story Telcordia is choking the life out of the RBOCs, and they know it...but don't have any options. Telcordia isn't exactly rushing to solve the problem of rolling legacy circuits out of TIRKS (at one time, the world's biggest database) onto anything else. And for every RBOC planner who wants desperately to get out of the OSMINE cycle, there's 10 ops people who view that knowledge as job security.
Peter Heywood 12/5/2012 | 2:07:25 AM
re: Photuris & SBC: The Inside Story A lot of their ops folks have 30 years in and make huge money (a lot more than a CLEC or IXC pays, that's for damn sure), and most of them I've worked with don't know their ass from their elbow. One RBOC I worked with a lot had one set of ops folks that provisioned just ADMs, one that just did narrowband DXCs, and a third that did wideband DXCs and whatever limited broadband stuff they had. Even 10 years after Tellabs put SONET on the 5500 and 532L, the DXC folks would still claim complete ignorance as to anything that was a SONET circuit, and most of them weren't just claiming.
Peter Heywood 12/5/2012 | 2:07:26 AM
re: Photuris & SBC: The Inside Story Someone has sent me a great memo about RBOCs, and I've decided to share some of it by posting bits of it on this board.

First, some background. This person has asked to remain anonymous, just in case he returns to the telecom industry. Right now, he's working for a gaming company, along with a lot of other folk from telecom companies.

He used to work in systems engineering at a biggish vendor, where he spent a lot of his time on OSMINE, Telcordia's effort at creating standardizing operations support systems (OSS) in RBOCs.

I asked him:. "Do you think the RBOC's way of doing business produces results?"

His response starts like this:

"RBOCs and results? Some folks would probably say that's an oxymoron. All in all, I think they've done as well as they can competing in an environment that's changing much faster than any big, monolithic business can possibly adapt to. They're still running a network (at least on the wireline side) that exceeds just about any other product you could name. If our POTS phones performed as lousy as our cell phones, PCs, etc., people would go ape. And they've figured out a way, at least in the case of Verizon & SBC, to be really competitive at long distance and wireless. Their big problem, and most honest people at RBOCs will admit this, is that they've got legacies hounding them everywhere."

He then lists RBOC legacy problems, and I'm going to post each issue separately. The headings are:

-- Legacy union employees
-- Legacy OSS
-- Legacy vision
-- Legacy government





Stevery 12/5/2012 | 2:07:27 AM
re: Photuris & SBC: The Inside Story S&M folks never know the truth to beign with so how can they lied??

In this case, it sounds like the truth is "I don't know when the product is ready."

And how many of them accurately communicate that?
dodo 12/5/2012 | 2:07:27 AM
re: Photuris & SBC: The Inside Story http://www.jenniecook.com/unle...
As a Nortel sales manager in New York City,
he worked for months to close a deal with the
lucrative New York Blue Cross/Blue Shield
account, a 16-switch network worth $14 million.
"I was calculating how large my commission
would be," admitted Charles, "and I lost the
account to Rolm."
Interesting isn't it?
dodo 12/5/2012 | 2:07:29 AM
re: Photuris & SBC: The Inside Story Charles Childers has left Bell Nexxia, where he was Senior VP Sales and Marketing, to become Chief Marketing Officer at Nortel Networks in Brampton, Ontario
http://www.angustel.ca/update/...

Teleglobe (Quote, Chart) has named Charles Childers as president of global markets. In addition, Michael Neuman, currently president of Europe, Middle East and Africa, will be assuming responsibilities for Teleglobe's Data and e-Business Solutions globally.

Prior to joining to Teleglobe, Childers, 39, held the position of president, major accounts for Nortel Networks Corp. He also served as Nortel's chief marketing officer. Childers was previously senior vice president of sales and marketing for Bell Nexxia.

http://dc.internet.com/news/ar...

Peter

it is surprising that some executives would like to claim the fame of bringing in such revenues.

unfortunately this is not the case with Childers
If one does some research this is what transpires:

He left Bell Nexxia to join Nortel as a CMO in Jan 2000 and became President of Major accounts only after Roth announced his "retirement" in May 2001 and Chandran wanted to continue building his empire. Unfortunately Chandran bailed out that same year ( for obvious reasons), Frankie was chosen as CEO in October 2001 and Charlie jumped ship to Teleglobe.

He did not actually participate in the go-go years when the big contracts were being signed- the biggest years were1999/2000 -revenues $21.3B /27.9 and he was not even an employee in 1999 and was a Chief marketing honcho in 2000 ( remember Diana Ross and the William's sisters contract).

when he did become President of Major accounts in late Q'1-2001,he was riding on the coat tails of MAVPs and M&S staff who were let go starting November 2000 ( that's when gold started to turn into dirt and those of us in the account teams will remember that particular quarter ) and we all know how the results were in 2001.

hence he DIDN'T contribute one iota

atmguy 12/5/2012 | 2:07:31 AM
re: Photuris & SBC: The Inside Story >>S&M folks never know the truth to beign with so how can they lied?? In some cases, only during testing, the real truth came out. The developer did not know what they developed do not work either..

That is so true.. in may of the companies that I have worked. The problems, compliancy or otherwise is not intentionally designed. It is lot of times because done by inexperienced developers with little or no supervision by managers. Lot of times, the managers themselves have no experience/expertise in the areas they are managing and so, how can they help their staff? 20 years back, companies did due diligence in hiring their developers and managers knew their jobs is to watch the development phase of the product.
DarkWriting 12/5/2012 | 2:07:32 AM
re: Photuris & SBC: The Inside Story SC,

You have no idea how many times I tried to tell this to the arrogant fools at my previous place of employment. Sometimes it's better to let the other guy take the lumps and spend the money trying to hit a moving target. Following along closely and jumping in with a solid product when the dust has settled might be a better strategy for a smaller company trying to hold down burn rate. This also requires an active sales force.

DW
stephenpcooke 12/5/2012 | 2:07:33 AM
re: Photuris & SBC: The Inside Story Hi,

One other thing that most techies do not understand, and this is a hard lesson... Just because your target, who was really too big for you in the first place, goes with your competitor who is also a smaller company, does not mean that you are out completely. As discussed previously it is economically challenging to deal with customers who are much bigger than you. You may find that your customer picks your competitor and then proceeds to ring them dry. As long as you are still keeping in contact with the decision chain you can actually win the day by losing the first round.
stephenpcooke 12/5/2012 | 2:07:34 AM
re: Photuris & SBC: The Inside Story Hi Dreamer101,

You are exactly correct in your assessment of how the development process fits into sales. As optical_man also pointed out, there are no perfect products, yet many of them still get sold. There have been many touting the value of various features and throwing all sorts of standard names around. What optical_man pointed out also applies to standards compliance. I was once a VP in one of the largest independent test houses in the US. You soon realize that there are NO products out there that are fully standards compliant. Now you have to consider that many of those not completely standards compliant products got sold into carriers and are carrying traffic today and therefore generating revenue for those carriers.

So the question remains: what good is complete standards compliance when it is not guaranteed to fit into the carrier's network? This is why carriers have their own network compliance labs in the first place. Carriers tend to sluff off sales claims of support for various standards and wait until they can put it through their lab(s).

This is another reason why RBOCs tend to drag out purchasing cycles, especially with smaller suppliers. As discussed on these boards it takes a lot of organization and intestinal fortitude to deal with RBOCs, and the RBOCs know this. This is why RBOCs like to see big partners with smaller players because they like dealing with larger organizations that have the staying power that most startups lack.

In the world of big business the rules are very different from 'lowest cost wins', 'nicest feature list' or simply 'who you know'. I am sure that Photuris' CEO knew many of the SBC players and was apparently unable to close the deal. What you have to sell in this situation is the entire business case, including the stability of your company. Every major deal is an exercise in due diligence on both sides. The RFP process is just the start of the dance.

What you have to sell is 'We understand your issues and concerns and will do what it takes to help you deal with them'. You have to prove that you know their issues and daily concerns. This requires relationships throughout the decision chain because everyone's issues have to be dealt with. Once you show that you understand their issues you have to be able to demonstrate that you have the capability to 'do what it takes' to help them.

This entire process takes time and money. You have to go into this dance with the understanding, up front, that it will take time. This is why cost controls and burn rate are so important to corporate health. Your VPof sales person has to understand the market and the needs of your particular company. In general a startup with an RBOC is not a good fit. The process takes too long and the odds of success are very low. That is not to say that it should not be attempted; just that you should know what you are getting into from the start and have many levels of backup.

Here is the hard part... you have to know when to 'cut and run'. If you are exceeding your budget chasing a single, potentially large customer, you sometimes have to walk away before that customer bankrupts you. By walk away I don't mean ignore them, just spend much less time on them and devote your efforts to keeping your company afloat by making the less glamorous deals with the smaller players. You will generally find that, once you get a few deals with the smaller players under your belt, the bigger fish will be more amenable to your advances and you will have more stamina for that second dance.
Peter Heywood 12/5/2012 | 2:07:35 AM
re: Photuris & SBC: The Inside Story Actually, I've talked to Siemens about this. It says:

1. It did talk to Photuris, but...


2. It's not convinced that there's a big market for ROADMs in *metro* networks. It thinks RBOCs could get a better return on investment by focusing on other issues.

3. That's why it's partnered with Adva, which has focused on getting efficiencies from the integration of DWDM and Sonet/SDH in *metro* networks, rather than reconfigurability. (By the way, Adva went through a phase of planning to add an optical switch to its metro gear..
http://www.lightreading.com/do...
.. and subsequently decided to put the project on hold. I've teased Adva about this in past stories.)

4. The proof of the pudding is in the eating. The Siemens/Adva partnership has won a milestone contract with Deutsche Telekom:
http://www.lightreading.com/do...

5. Siemens says ROADM make much more economic sense in long haul networks, and it already has an ROADM for this market. That's what's behind its contract win with AT&T and MCI. See:
http://www.lightreading.com/do...

Funnily enough, Marconi also seems less than convinced that there's a big market for ROADMs in metro networks. See this interview with Mike Parton:
http://www.lightreading.com/do...

So...maybe SBC isn't really in much of a hurry on this metro ROADM caper?
sgan201 12/5/2012 | 2:07:35 AM
re: Photuris & SBC: The Inside Story Hi DW,
There is a big difference between lying and not telling the truth. In most cases, the S&M folks do not know the truth about real product feature and schedule. And, the engineers are usually over-optimisitic in their capability. Hence, in the end, what was deliverred is less than what was promised. S&M folks never know the truth to beign with so how can they lied?? In some cases, only during testing, the real truth came out. The developer did not know what they developed do not work either.. For any complex product developnment, no many people know the truth. In some cases, nobody know what the truth is..

Dreamer
sgan201 12/5/2012 | 2:07:35 AM
re: Photuris & SBC: The Inside Story Hi,
As far as I know, in term of hitting the price point for RBOC, unless your are 1/3 aka around 70% cheaper than your closest competitor, you are not hitting the price point. Anything more than that, price cannot be considered as an advantage for your product..

Dreamer
DarkWriting 12/5/2012 | 2:07:36 AM
re: Photuris & SBC: The Inside Story If they were really #1, then I would bet good money that we have not seen the end of this story yet. Someone will come along and resurrect this deal. That is the point of the Sales 101 lesson! Just need the right salesman (corrupt or ethical) in there.

DW
alcabash 12/5/2012 | 2:07:36 AM
re: Photuris & SBC: The Inside Story Finding a partner can have very different meanings depending on whether you are the partnerer or the partneree

"Photuris is looking for a partner" translates into "I am running out of money, please buy me !!! VC's don't want to put more money, if we win SBC, we will lose even more money, please, please buy me !!!"

"Siemens is looking for a partner" translates into "Our product is late, our engineers can't get the right features on time, let's resale the Photuris gear until we have the right product. Then, we'll dump them."

Road Trip 12/5/2012 | 2:07:37 AM
re: Photuris & SBC: The Inside Story I heard that the were #1 and everyone else was #2, or lower.
corvisalum 12/5/2012 | 2:07:38 AM
re: Photuris & SBC: The Inside Story its amazing how we blame people. first, it was the founder's fault. then somebody realized, lets blame the lucent management style. so we beat up on that for a while. wait, wait, we forgot the ceo and vp sales - so we spend valuable time denigrating them. aha, says another, how about the board? lets hold them culpable.

notice in the midst of all this, several positive aspects were forgotten. it appears as tho photuris hit all the rfp features on the head and hit the price points. while the technical team may be wonderful (although i would be loath to hire arrogant engineers who turn around and blame everybody but themselves for the failure), does anybody ask the question: how did the technical team decide what to build? who decided the features and the price points? hmmm. can't think of anyone to give credit to, i suppose, because it is human nature to accentuate the negative.

how about this scenario:

- nobody knows how much money sbc will spend.
- nobody knows when the next rboc will spend money on roadms.
- all incumbents have partial development of an roadm product underway and management is disinclined to admit they are late in the game.

--> hence all incumbents decline repeated partnership offers from photuris.

--> hence, arrogance on the part of incumbent vendors killed photuris.

now that they are thrown out, i want to know what the incumbents are thinking.

just another (potentially positive) way of looking at things?

ca
lightmaven 12/5/2012 | 2:07:39 AM
re: Photuris & SBC: The Inside Story There seems to be an assumption that Photuris' product was on the inside track when the wheels fell off. It seems to me more likely that they might have at RFP writing time, but that they were not even the technical leader by the end of the RFP process. Why else would Siemens go into reverse so quickly.
Additionally I'd bet that SBC is slow tracking this whole RFP. If all or nearly all their standard suppliers had nothing to bid and had to go to startups it seems that perhaps this is not as economically important to SBC as the RFP process might imply. Is traffic growing so fast that they have to add one more technology challenge to their network? If it was there would be a lot fewer unemployed folks on these boards.
Finally the sales 101 posts have been excellent. Kudos to all who contributed.
jim_smith 12/5/2012 | 2:07:39 AM
re: Photuris & SBC: The Inside Story Why else would Siemens go into reverse so quickly.

Because Photuris didn't give Seimens a good deal?

... it seems that perhaps this is not as economically important to SBC as the RFP process might imply.

The standard suppliers don't have a good ROADM story. Not all RFPs are created equal. I agree that this one seems to be lower on the importance scale.

Is traffic growing so fast that they have to add one more technology challenge to their network?

I agree. If this was a "hot" technology, the story would have been quite different.
bigpicture 12/5/2012 | 2:07:39 AM
re: Photuris & SBC: The Inside Story When I was at Nortel (1999,2000) the "Major Accounts" were individually headed by a "MAVP" who reported directly to Roth. There wasn't a universal Major Account President. Does it say when he was there? Was Nortel over $10 billion before 1998?

BP
DarkWriting 12/5/2012 | 2:07:40 AM
re: Photuris & SBC: The Inside Story OM,

I have not been in the lab for over 10 years now but I still have my ethics in tact (probably why I am having a hard time finding a job in technical sales/marketing, can anyone recommend an ethical company that is hiring). I know the difference between getting a solid (not perfect) product out the door versus throwing some crap over the wall to "stay engaged" at an account. I'm not talking about enhancements here, I'm talking about the sale of newly developed products.

I do not know the particular situation with Photuris so I can only comment about business in general. I stand by my original statement since I have not met anyone in sales/marketing who has not lied to a customer at one point or another (except me). How about you??? Of course, you probably haven't either but that would make sense being that most s&m types lie to themselves just as readily as they lie to customers. It's the reason why they are in sales in the first place. Sold their soul for a commission check. Believe it or not, I do have a measure of respect for these people, sometimes they have to work very hard trying to make up for management that puts them in a tough spot in front of a customer.

Consumers are prepared to fix a flat tire and there are plenty of service organizations to help. Have you ever been involved in a recall of an electronic component that is soldered to a circuit board? It is ugly as is your analogy.

DW
technonerd 12/5/2012 | 2:07:40 AM
re: Photuris & SBC: The Inside Story The folks who make these type of decisions (e.g., CEO, VCs & any other board members) felt that selling the company piecemeal was more profitable (or less lossy) than partnering with a big company.
If it's like a zillion other vendors, the VCs ran the show and decided when to pull the plug.
jim_smith 12/5/2012 | 2:07:42 AM
re: Photuris & SBC: The Inside Story The real question, then, is "how did they fail to convert their traction with SBC into a partnership?"

I have a very simple theory about this one.

The folks who make these type of decisions (e.g., CEO, VCs & any other board members) felt that selling the company piecemeal was more profitable (or less lossy) than partnering with a big company. I'm sure they must have given SBC a "this is your last chance" notice, but I think SBC said "no thank you, we are not in a hurry".

I don't think anyone goofed up. It was strictly business.
b_40 12/5/2012 | 2:07:42 AM
re: Photuris & SBC: The Inside Story While it's entertaining and informative to hear sales guys extoll the virtues of sales guys, isn't this story really less about Photuris' management of its SBC relationship and more about Photuris' failure to bring to the table a partner that SBC considered palatable? The story seems to be that SBC was ready to go with Photuris if they could hitch themselves to a partner, and Photuris simply failed to accomplish that, and certainly not due to any lack of awareness of its necessity.
The real question, then, is "how did they fail to convert their traction with SBC into a partnership?"
stephenpcooke 12/5/2012 | 2:07:43 AM
re: Photuris & SBC: The Inside Story optical_man, thanks for clarifying, I misunderstood. I was a system design authority for Nortel's TransportNode product line earlier in my career. When I made the transition to the MCI account team it was probably the hardest transition I have made. Coming from the design side I sat there in front of the customer and couldn't understand why they just didn't throw all their money at us because the product was so good. It was a very humbling experience and I was fortunate that I didn't single-handedly destroy the account with my design authority-based arrogance.

Your comment about sales guys going into the lab is a good one though. If they were good sales guys they wouldn't want to take the pay cut; if they weren't, they would probably do less harm there even without engineering qualifications. Given my employment status I'd take either right now.
stephenpcooke 12/5/2012 | 2:07:43 AM
re: Photuris & SBC: The Inside Story Interesting that he takes credit for the ENTIRE revenue from all sources for Nortel as a corporation. Man he's good, after he left they had to layoff 2/3 of their workforce because the people who were left were just no good without him.

I wonder how the stint at Photuris will show up on his new bio? With those key connections one has to wonder why he wasn't able to get Nortel to back him? I think I smell burnt bridges somehow. It is also curious that he didn't get Photuris positioned with Teleglobe for some incremental revenue which can be the difference between life & death for a startup. It might have given them some needed credibility and kept them going for a while.
rabbitrun 12/5/2012 | 2:07:43 AM
re: Photuris & SBC: The Inside Story In theory before the RFP responses are reviewed a selection matrix is created by each group involved, then filed and controlled by the procurement manager. Each reviewer completes their section of the matrix and sends it back to the procurement manager. Then a general meeting of all interested groups get together to vote on the final winner(s). The selection matrix is then retained by the procurement department in case there is a protest and an audit is mandated.

Let me relate an old story of how it really happens. In the early G«ˇ90s PacBell let an RFP for AIN equipment. The winner was Bell Labs (now Lucent). But, the RFP was cancelled before any results were announced. PacBell management decided to enter into a business relationship with Bellcore (now Telcordia/SAIC), and own part of BellcoreG«÷s AIN business. WhereG«÷s the technology component here?

It is well known that Cisco has promised to bring in billions of dollars worth of business into SBC via its enterprise sales channels. Do you think Cisco would have entered into that business relationship if SBC had gone to Extreme or Juniper for its equipment purchases? WhereG«÷s the technology component here?

In the extreme there are situations like the famous Area 51 of Qwest. Ask Nacheo about Area 51. Ask Matt Bross about how Cerent and Sycamore gear was selected for use in Williams. If you donG«÷t understand this part of the business, youG«÷ll be setting yourself up for a surprise and disappointment.

IG«÷m not saying all is business is corrupt. But, if you want to do business with SBC you must have a sales force in San Antonio, not Austin. And be sure the VP located there is a scratch golfer. Its how business is done, has been done and will be done.
optical_man 12/5/2012 | 2:07:44 AM
re: Photuris & SBC: The Inside Story stephencooke,
That was an analogy. Chevy isn't perfected yet is accepted.
No technology is perfected, but is accepted (and the best one 'usually' wins.
My point was the guy who said selling to rbocs, or sales teams to rbocs were unethical.
He insuinuated the minute they went from honest virtuistic altruistic lab engineers to work on the sales teams they basically sold their souls, and became sleazy heathens.
I'm sure there are some, I'm sure you've seen some, I sure you've figured them out and shown them the door.
I merely took offense at his across the board crack.

How about Sales types moving into the Labs?

ok, just a joke, I can see the Systems Engineers right now rolling on the floor choking with laughter. :-)
stephenpcooke 12/5/2012 | 2:07:45 AM
re: Photuris & SBC: The Inside Story optical_man wrote:

People REALIZE this is "where Chevy is now with their product" and accept that.
SAME THING with technology.


Forgive my ignorance to the correlation but when was the last time you tried to sell a Chevy to an RBOC? Were you successful?
Peter Heywood 12/5/2012 | 2:07:45 AM
re: Photuris & SBC: The Inside Story An excerpt:

Prior to Teleglobe, Charles was President of Nortel Networks Major Accounts business. In this role he was responsible for $10 billion in enterprise and carrier revenue worldwide. His major account relationships included SBC, Verizon, Qwest, Sprint, Bell South and Level 3
fbgboy 12/5/2012 | 2:07:46 AM
re: Photuris & SBC: The Inside Story I have been reading the boards for over 5 years now, rarely post, too many geniuses out there to correct me. I am not an engineer, but an account manager.
Telling techheads this stuff they miss the point - again. Never mind RBOC's your description works for all companies big and small and at the end of the day you have to make sales.
All you tekkies pay attention - you may have to sell yourself to get your next job.
Stephan and the rabbit well said!
This is why i sift throught all the crap
Anyone critiques this post - find some real work to do.
fbgboy out
optical_man 12/5/2012 | 2:07:46 AM
re: Photuris & SBC: The Inside Story "Acccount Management is why (I won't comment on how this actually happens other than to say leave your ethics at the lab door)."

Now that's just a crock of dung-hooey.
OK, the Chevy Suburban is perfection in automotive technology, correct? NO? Well, then how are they selling millions of them? Is there room for perfection, advancements? You bet, labmeister.
People REALIZE this is "where Chevy is now with their product" and accept that.
SAME THING with technology.
Step outside someday, see a flat tire, and retreat back into the comfort of the lab, telling yourself, "damn thing is running on inflated rubber discs, who let that out of the lab?".
stephenpcooke 12/5/2012 | 2:07:47 AM
re: Photuris & SBC: The Inside Story Peter wrote:

On the face of it, it looks as though Photuris was badly served by its two CEOs - Childers and his predecessor, Mike Pisterzi.

You are focussing on the CEO(s), and you should be, but the board is also culpable. The purpose of a board of "Directors" is to direct and to mentor, at least a good board. They may have had a good technical man in Ashish, I'd never heard of the man until these articles, but they left him and the rest of the employees high and dry. Reading between the lines of Ashish's memo I see a founder who poured his heart into the company and whose personal and business education in telecom was essentially ignored. Given the previously discussed lack of the basics in terms of account team operations, it is hard to find anything positive to say about the senior management and board of directors. Now the discussion on the morals and ethics of VCs begins...

The corporate system, when it works, is MUCH better than this!
DarkWriting 12/5/2012 | 2:07:48 AM
re: Photuris & SBC: The Inside Story Anyone thinking about jumping from Engineering to Sales/Marketing should print out the posts on this thread and keeping them in a book for future reference. You are reading things here that you will never learn in business school.

Did you ever sit in the Engineering lab and wonder how the company kept getting chances to fix what you knew was a half baked product? Acccount Management is why (I won't comment on how this actually happens other than to say leave your ethics at the lab door). Of course, at some point the company does have to come up with a reliable product or it will get the boot (something many management teams can't seem to figure out either). It will always be "who you know" rather than "what you know", whether it be sales or people looking for work!).

Just trying to put the words of Stephen Cooke and other great posters into practical applications to help newbies and techies understand.

DW
douggreen 12/5/2012 | 2:07:51 AM
re: Photuris & SBC: The Inside Story Stephencooke,

Nice post. Buying from someone with whom you have a good relationship is not just an RBOC phenomenon. It is human nature. One of the things that makes the RBOC sales process unique is the NUMBER of people with whom you have to have relationships. Finding the few people who can say "yes" is important. Knowing who the multitudes are who can say "no" is just as important (better start working with the ops people early on if you ever want a contract to turn into POs).

I wouldn't call this sales 101, but perhaps sales 103 - large account management. Any large account sales person worth his salt can pull up an org chart that highlights all the people in the decision process, and can tell you how those people will be covered. It's not just the sales guys responsibility either. It is the responsibility of EVERYONE in the company to help, and a good sales guy knows how to match the right people in his organization up with the right people in the account.

Sometimes sales people "wing it" and get lucky. Ususally that luck happens because someone else (marketing, sales, engineering, etc.) were proactive in covering the account on their own. The sales guy then makes the mistake that luck in one situation translates into a legitimate sales style, and some new company hires him/her as a VP of sales. That happens in an incredible number of cases.

Regarding how the experienced execs could make this mistake, sometimes experience in a large company, where relationships are already established, everyone already knows your company, and you have a large staff to handle the "details", ) doesn't translate well into startups.

I've been a part of 1 large company (IBM), worked in 4 startups, and worked with many more. Large account sales is not often done right, but when it is, it is like watching a conductor with his orchestra.

stephenpcooke 12/5/2012 | 2:07:55 AM
re: Photuris & SBC: The Inside Story Peter wrote:

How do you see this applying to this particular case, of Photuris and SBC? The partner issue was obviously critical.

Translation: 'Are you smoking drugs for posting something about how sales is done with RBOCs when the obvious problem was partners...!!!???'

Lets have a quick look at our data:
1.) We have the memo supposedly written by Ashish Vengsarkar which is posted in the initial article.
2.) We have bios of the management team on the Photuris website.
3.) We have my post on Account Teams 101.

If we take the post on Account teams and then look at the bios of the CEO, Charles Childers, the COO, Bill Gartner, the Vice President of Worldwide Sales and Service, Jim Lowrie, and that of Ashish, why did Ashish write:

We made mistakes and I take responsibility for them. In hindsight, we could have done a better job on marketing and sales, partnerships and business deals, maybe more push on generating small revenues (a la TAMU), and more intensity in developing higher-up connections in our customer base. These are lessons learned and we will do better the next time around.

specifically the part about 'developing higher-up connections'?

Combined the CEO, COO, & VP Sales must have 50 years of telecom experience. Why did the guy with 11 years experience, mainly technical, have to learn this lesson through corporate failure when these other 3 guys should have been able to write the book, let alone the post on LightReading, on account teams? I called my post 101 because these are the basics, it gets even more complicated when you get into the details. Giving me the benefit of the doubt that I am right in calling these the basics, why didn't the board and these other 3 guys coach the technical guy through the process?

Would this have saved them, probably not by itself. I submit that this is a symptom of fear at the top. A little fear in their situation is necessary, even prudent, to make top people perform to their best. What I am talking about is terror.

Another thing that I didn't mention in my post on account teams is that it is ALWAYS the best situation for an equipment provider to 'write' the RFP for the carrier. If you can succeed in making this happen you should just have to show up to win the contract. How did they drop the ball so badly when they were in the king position?

Why was it that the technical guy wrote the memo (ie: why wasn't it the CEO?)? If what I posted are the basics, why didn't the VP Sales have a detailed plan of engagement for a customer as potentially large as SBC that included strategic relationships up and down the management/decision chain? Given that they also didn't pursue smaller customers according to the memo he should not have been terribly distracted. For a startup this is a fatal attitude to begin with because cashflow is king. Having even a little bit of revenue coming in can keep you afloat for a while and also improve your chances of getting more funding if you need it later.

Given the background of Charles Childers, who should be able to walk on water according to his bio, how could he have let his company get so sloppy as to let this happen? If he wasn't keeping track of the progress of an account as important as SBC what was he thinking? Believe it or not it is the job of all management to serve the employees and the company's customers, not the other way around. Charles should have been poking his nose into all high-level discussions on SBC and getting his marching orders from the VP Sales (who had his plan of engagement, etc.).

Bottom line, when it came to finishing they were too afraid to succeed because the expectations on them were too high for their capabilities. They had come to believe their own bios and couldn't fill the shoes that they had written and sold to their investors and their employees. When they got to the point of make or break, they were paralized with fear.

To quote Monty Python: 'This is my theory, it belongs to me,...' and I may be entirely wrong.
Peter Heywood 12/5/2012 | 2:07:55 AM
re: Photuris & SBC: The Inside Story Over here in Europe, the big incumbents like BT and FT are trying to move relationships with suppliers into long term partnerships - ones in which they jointly come up with ideas for new services the carriers can offer.

See: http://www.lightreading.com/do...

Is this happening in the US too?
Peter Heywood 12/5/2012 | 2:07:55 AM
re: Photuris & SBC: The Inside Story Good stuff stephenpcooke!

By the way, I definitely didn't mean "are you smoking drugs" by my earlier remark. I meant that your explanation of the purchasing process demonstrates how Photuris simply had to partner with one of SBC's existing suppliers. It's clear that in order to sell something major to an RBOC, you have to be all over them for years and years - and that's something a startup can't do on its own.

Your question about what was Photuris's CEO doing is absolutely on the money.

You do have to wonder why it was Ashish Vengsarkar that ended up sending the note to staff, rather than the CEO. And as you say, the note itself raises questions about why Ashish rather than Childers is saying that he takes responsibility for the mistakes that Photuris made.

On the face of it, it looks as though Photuris was badly served by its two CEOs - Childers and his predecessor, Mike Pisterzi.

I'm looking into this. I think there may be lessons to learn. If anybody thinks they can help me, please get in touch on [email protected]

jim_smith 12/5/2012 | 2:07:56 AM
re: Photuris & SBC: The Inside Story Excellent post, stephencooke.

What people on these boards have to understand is that technical ideas are nice but the sales of millions of dollars of equipment is done by customer relationships AT ALL LEVELS, not simply by better specs.

This is a very important point that is hard for folks to believe because they haven't seen the "inner workings". Besides specs, golf, dining, jealousy of "startup millionaires", fear of new technologies, etc. also play an important role in vendor selection.

The RBOCs perceive themselves as "kings", and perception is reality.
technonerd 12/5/2012 | 2:07:57 AM
re: Photuris & SBC: The Inside Story Maybe I can get a job selling DISH-TV. The only fiber involved in this is would be the salad you're eating while watching your favorite show on DISH-TV. Good bye cruel (fiber) world!
Look at it this way: If you become a DISH salesman, at least you'll be selling something that works and that someone is willing to pay for. It's a whole lot more than most vendors can say.
OptixCal 12/5/2012 | 2:07:58 AM
re: Photuris & SBC: The Inside Story I'm just as sorry as the rest of you to see another Telecom company go up in smoke; maybe more. I was just beginning to get some traction in there with some of my products, had calls into the necessary engineering team and wasn't getting any return calls, and this happens? Dam...I'm getting pretty tired of all this stuff. The hell with this market. Maybe I can get a job selling DISH-TV. The only fiber involved in this is would be the salad you're eating while watching your favorite show on DISH-TV. Good bye cruel (fiber) world!
technonerd 12/5/2012 | 2:07:59 AM
re: Photuris & SBC: The Inside Story Based on my understanding, in RBOCs, and in SBC in particular, the decision process involves multiple groups, each with their own agenda(s). The final outcome is a result of multiple conference calls in which all the groups are involved in a complex mating dance.
The average RBOC operates with the same elan, flexibility, collegiality and openness of the Warsaw Pact, circa 1977.
Peter Heywood 12/5/2012 | 2:08:01 AM
re: Photuris & SBC: The Inside Story stephenpcooke - thanks for your posts giving insight into what goes on in the purchasing process within big carriers. Very interesting.

How do you see this applying to this particular case, of Photuris and SBC? The partner issue was obviously critical.

Why do you think Photuris had such difficulty finding a parner? If Photuris had such glowing reports from SBC's techie folk, you'd have thought they would have been able to takle their pick of SBC's big suppliers. Something doesn't add up.
jim_smith 12/5/2012 | 2:08:01 AM
re: Photuris & SBC: The Inside Story Great post, rabbitrun.

You must understand Sales 101 G«Ű SBC Labs is a gatekeeper organization. They donG«÷t have the checkbook

You are correct, the labs don't have the checkbook, but I don't think the other organization and/or person you mentioned has the final word either. Based on my understanding, in RBOCs, and in SBC in particular, the decision process involves multiple groups, each with their own agenda(s). The final outcome is a result of multiple conference calls in which all the groups are involved in a complex mating dance.

The process of deciding a vendor is an art, not a science.

I'm not saying that this is a good or bad way to make technology decisions. It is what it is.
stephenpcooke 12/5/2012 | 2:08:01 AM
re: Photuris & SBC: The Inside Story Peter Heywood wrote:

Why do you think Photuris had such difficulty finding a parner? If Photuris had such glowing reports from SBC's techie folk, you'd have thought they would have been able to takle their pick of SBC's big suppliers. Something doesn't add up.

The short answer is I have no idea why they were not able to find a partner and, yes, they probably should have. However, glowing reports from the SBC technical people can be given out for a number of reasons, not all of which are technical.

On the partnering side, there may be more behind their leadership's resumes than meets the eye (eg: perhaps they burned some key bridges within their old employers), I don't know. Perhaps they weren't willing to sacrifice part of the profit to get the contract, perhaps they thought that they could go it alone (foolish, but possible), again I don't know the particulars; we may never know.

Glowing reports from the SBC techies can mean any number of things including good, technical features/functionality. However, that must be tempered with the potential for SBC getting price leverage on other players, seeing how long Photuris was able to hang in there, testing them to see how far they were willing to go to get the contract in terms of getting some bigger industry muscle behind them, etc. I have no doubt that SBC were interested, if they have absolutely no interest whatsoever Mike Pepe will tell you so and won't return your calls.

In terms of not adding up, you are right, there is something missing which we may never know.
konafella 12/5/2012 | 2:08:05 AM
re: Photuris & SBC: The Inside Story Alcabash wrote

"Response to your Marconi question is actually quite simple, Marconi did not develop a metro version of their Long Haul ROADM and their LH product is far too expensive to be used in the metro part of the SBC network."

Not true. Their LH ROADM was loosely based on their PMA32 metro ROADM product. But recall that Marconi shut down their entire optical division in North America, including support, training, sales, product mgmt, etc.
freed 12/5/2012 | 2:08:08 AM
re: Photuris & SBC: The Inside Story Is Childers really to blame? Everyone at Photuris knew he was just a puppet.
He made absolutely no decisions, he was a yes man, hired to make the company feel legitimate....like okay now we have a CEO....RIGHT!!!

Anyway, now that I am freed from that shackle of a company, I can now move on with my life. Guys put it behind you, and join me in celebrating freedom (I sure if feels this way for many).
stephenpcooke 12/5/2012 | 2:08:09 AM
re: Photuris & SBC: The Inside Story Brilliant post rabbitrun!!!

Hopefully between our two posts, one from the RBOC side and one from a successful incumbent equipment provider, the people on these boards will see what they are really up against. Throwing a bunch of money at a good design team is only a small part of the puzzle. I have seen many startups and VCs that just didn't get what it takes to be successful in this business, and they have paid the price.

Another lesson is to not judge the resume by the titles. These guys may have had impressive credentials in terms of past performance but they may have been in strong, already successful organizations where the reason for the success was imbedded in the culture. If they did not pick up on those subtleties they didn't learn the necessary lessons from their position. When removed from the protective culture they may have been fish out of water, I can't say.

If you are part of a startup that still lives, have a look at your marketing plan and how they plan on getting to those great-looking predictions. Ask yourself if you believe they can do what they say they can do and ask pointed questions such as:
- Exactly who in the customer organization will make the final decision?
- What do you think their ultimate decision-making criteria will be (if they say an RFP response get your resume ready)? What are that decision-maker's personal hot buttons? To get this information someone on your team has to have a good working relationship with that person.
- What kind of relationship does our competitor have with that decision-maker? What level of technical differentiation will we have to have to impress that decision-maker?
- How do we plan to combat a 'package' approach by our competitor? Make sure that you understand what it really takes for your customer to put your product into their network and don't forget things like training of operations personnel, OSS interfaces, lab certification, etc. Leave even one minor detail out where your competitor doesn't and you may be done, especially if you are already not a major supplier.
- What is the plan for dealing with product 'oopses' in the customer lab? Are you well enough positioned with the lab personnel that you can find out about difficulties before they get escalated to a level where you are simply hosed no matter what you do?
- How long are you prepared to wait for anything substantial to happen? Understand that, as rabbitrun said, RBOCs are risk averse and will drag out any purchase for years if necessary just to see how well your organization can cope with dealing with their organization.
alcabash 12/5/2012 | 2:08:09 AM
re: Photuris & SBC: The Inside Story Peter,
Response to your Marconi question is actually quite simple, Marconi did not develop a metro version of their Long Haul ROADM and their LH product is far too expensive to be used in the metro part of the SBC network.
I am more puzzled by the fact that Marconi was not shortlisted in the recent LH RFPs (MCI, Verizon and AT&T)?
materialgirl 12/5/2012 | 2:08:11 AM
re: Photuris & SBC: The Inside Story Why on earth would Siemens or UTSI be ideal partners for Photuris anyway? What do they sell to SBC? Why did they not go after TLAB or LU as a partner? I would assume NT had some similar product.
rabbitrun 12/5/2012 | 2:08:12 AM
re: Photuris & SBC: The Inside Story Background: 18-years at SBC, last job I was a third level with a $30 million annual capital budget.

I was directly involved in writing and then evaluating responses for 6 large RFPs. Not one of those RFPs was decided upon technical merit alone. You must understand Sales 101 G«Ű SBC Labs is a gatekeeper organization. They donG«÷t have the checkbook G«Ű EL does. If you donG«÷t satisfy the procurement organization you are gone. Procurement (new technology introduction, what ever you want to call it) is a risk adverse organization. In PhoturisG«÷s case it probably took one comment from the gatekeepers like, G«£well this could have been betterG«•, to end it for a start-up. Given the small straw that broke this camelG«÷s back SBC was right in their decision.

If you are going to sell to a customer, you must understand that customerG«÷s needs and wants. The RBOCs are risk adverse. Understand what that means. And understand who has the checkbook, itG«÷s not SBC Labs. Ask John Chambers who he visits when he wants to influence SBC's buying decisions.
Steve Saunders 12/5/2012 | 2:08:13 AM
re: Photuris & SBC: The Inside Story "seems like everyone(including LR) blaming AV"

Light Reading doesn't blame anyone. We're just reporting the facts. See the story.
stephenpcooke 12/5/2012 | 2:08:13 AM
re: Photuris & SBC: The Inside Story I was on Nortel's MCI Account Team when that account was worth over $1/2Billion to Nortel (obviously a while ago). I then took a stint at Sycamore as a consultant. I had learned an incredible amount on the account team, coming from the systems design world. I saw how a successful account team functioned, what things were important, how much work goes into EVERY interaction with the customer AT EVERY LEVEL.

When at Sycamore they had hired a few sales guys from the Worldcom network engineering group (I was on the account team prior to the merger and at Sycamore after the merger). Coming from the customer they were incredibly cocky that they could deliver all manner of sales targets. They started going through all the hoops that the rest of the equipment providers have to go through (eg: RFP's from hell, etc.). They started pulling rank on the development team's time to get certain simulations done, etc. so that they could get things as they felt they had to be. They failed; in the process they pissed off the entire development community and had nothing to show for it but more and more questionnaires that were follow-ons from the previous RFP.

If you have not been exposed to this before this is what the carriers call 'vendor management'. You just can't walk in off the street with the latest & greatest and make a sale to these people. If your VP Sales or Marketing says otherwise RUN!!!

I tried to give the ex-Worldcom people a lesson in carrier sales but they would have nothing to do with a consultant so you can ignore the rest as you see fit.

When I said AT EVERY LEVEL, I meant it. I asked the ex-Worldcom people who on their account team had lunch regularly with Joe Cook and Fred Briggs (SVP Networks & CTO respectively at the time). They had no response. I asked if Nortel was also doing the same RFP. They said yes but Sycamore's technical specs were better. I asked what the purpose of the lower managers was on the account team. They didn't understand the question. The correct answer is that they keep the lower levels of the customer quiet enough (ie: no enormous show-stopping traffic outages so that the screaming can be heard by the higher-ups) so that your higher-ups can swing the deals with a minimum of customer distractions.

Make no mistake, ANY purchase decision, expecially in this market, will occur at the VP level or higher within the customer's hierarchy. RFP's are an exercise in leverage for the carrier. If the RFP response has errors, is badly done or incomplete, it can be used against the chosen supplier(s), who have generally been chosen before the RFP has been released, for leverage on price.

The reason I asked the ex-Worldcom Sycamore people if Nortel was also interested in the RFP was because they DID have people who had lunch regularly with Joe Cook & Fred Briggs, and they DID have other hooks into Worldcom than just the product on which the RFP was focussed (ie: if their technical specs weren't as good as everyone elses, they still had the option of a 'commercial' solution where they could offer free opamps, or reduced pricing on BCS releases, etc.). In other words, Nortel had the 'package' approach that no startup could hope to beat.

On the account team it was always seen as a failure for another equipment provider's equipment to make it into the customer's network. What this meant was that we had not been 'motivated' enough to provide the right deal. Major carriers will occassionally let a qualified smaller vendor (who has already gone through at least a year of jumping through hoops and chasing fake carrots) in with a smaller purchase. I can't comment on every time this happens but it is regularly used as price leverage on the bigger suppliers. What people on these boards have to understand is that technical ideas are nice but the sales of millions of dollars of equipment is done by customer relationships AT ALL LEVELS, not simply by better specs. Techies always bitch about the salaries of the sales guys because they contribute nothing to the product; without GOOD sales guys who understand how things work within their target customers and are good at maintaining the relationships within that target customer it doesn't matter how good the product is, it won't be bought (at least in quantities that matter).

The bottom line is that the carrier has to be REALLY pissed at the big suppliers to let the smaller suppliers into the game in a real way. When this happens you will see an announcement that the responsible big supplier VP has taken a cushy posting in Siberia and has been replaced by the guy whose wife has tea with the customer CTO's wife.
s-band 12/5/2012 | 2:08:13 AM
re: Photuris & SBC: The Inside Story This person definitely has "no class" to leak such a memo. It seems like everyone(including LR) blaming AV, inspite the fact that he was VP (marketing) and the whole management CEO,COO,CFO and the board was involved in desicion making.

I think it was wrong from Photuris to just go only for RBOC and not looked the small business like Movaz did. I heard from one of friend at Lucent (he is testing Movaz product) and says Movaz product really sucks and nowhere near to a RBOC class product. Sad to see a good product going down the drains.
Optic_Dude 12/5/2012 | 2:08:14 AM
re: Photuris & SBC: The Inside Story It seems hard to believe that Photuris could not get a partner when they had a virtual guaranteed contract with SBC. Of all people, Photuris management being mostly from large vendors should understand the process big companies follow on approving/testing products and who are the key decision makers.

Was Photuris management too cocky and arrogant to think that they didn&#8217;t need a partner or did they turn off potential partners because of no profit sharing? I mean why wouldn&#8217;t you partner with anyone with a potential revenue contract? Cisco partnered with anyone back in the 90&#8217;s and look what happened to them.

My guess is that the real answer was the box was overdesigned and was too expensive. I have very little confidence in knowing that the engineering team&#8217;s employment history was from several large inefficient design vendors. My guess is that startup costs were way too high for the first few lambdas. It&#8217;s great to get excited about features, but at the end of the day, telecom purchase decisions come down to cost. So, my guess is that there another vendor that was much more attractive on price or the RFP got cancelled/postponed entirely because of budgets.

I would like to know more from Photuris people if possible. Did they ever consider leasing their product just to get their foot in the door?

OD
freed 12/5/2012 | 2:08:16 AM
re: Photuris & SBC: The Inside Story I have no great love for Photuris and its "great" team, however whoever sent that memo has ZERO class.
Tells us a lot about the place though, the kinda loyalty it engendered.
dodo 12/5/2012 | 2:08:18 AM
re: Photuris & SBC: The Inside Story how come Charlie has not learnt from his "impressive series of assignments as CEO of Bell Canada Enterprises (BCE) Teleglobe, President of Nortel Networks Major Accounts and Chief Marketing Officer at Nortel Networks"?

You would think that, as the head honcho, he was and is in the position to guide his team and share some of his business acumen on how to develop his market!

'nough said.
dodo 12/5/2012 | 2:08:19 AM
re: Photuris & SBC: The Inside Story RGreg

You have nailed the issue.
It is sad that most of the start-ups ( not all) would not accept the fact that the RBOCS or any major operator for that matter will do business with a supplier or a vendor that is "stable", unless the start-up is backed by a partnership or JV with an incumbent OEM vendor.

Is it arrogance or stupidity?
One may have the most innovative black box but if the executive, from the carrier or service provider, who has the final say ( read his approval and "John Hancock" )in a negotiation for the contract is not convinced, the sales staff will never close that contract.

Unfortunately the mgmt of these start-ups are convinced of the M.O of doing business with the RBOCS only after the fact.

Just my 2 cents as a witness of such blunders in the past 4 years
kenmoney 12/5/2012 | 2:08:19 AM
re: Photuris & SBC: The Inside Story RGreg,
Correct. They over estimated the power of the Austin lab evaluation team and underestimated the power of the business decision people. An enormous mistake that has impacted the lives of many good people.

Much, if not all of the blame has to fall at the feet of the CEO, Charles Childers. People like Ashish are easy to blame. He was both arrogant and inexperienced, a tragic combination.
Childers should be blamed for not getting a partner deal done. He should be blamed for not making changes at the executive level if they needed to be made.
Why isnG«÷t he being blamed of even mentioned? Because he appeared to be a placeholder in that position. Someone to fill the slot and hopefully not do or say anything stupid.
If that isnG«÷t the case, and he really was in charge, he should be publicly flogged and never work again.

Bwana,
Excellent posts. Very accurate. Here is an extra credit math problem.

A company is in business for over (4)four years. They build (1)one great product. They hire (5)five sales people over that period who close (0)zero sales. They hire (2)two CEOs who fail to raise even (1)one dollar of new capital. They hear from at least (2)two RBOCs that they need (1)one partner. (2)Two weeks before hitting the wall at 100 MPH, they fire 50% of the staff. If they manage to line up (0)zero partners, what is the approximate speed at which they crash and how long will Ashish keep spinning after impact?
USA 12/5/2012 | 2:08:20 AM
re: Photuris & SBC: The Inside Story Marconi's presence in the US is pretty much limited to the guys from Fore Systems. They are out of the optical space in the US, especially with the NAA team going to AFC.

Therefore, I don't think they could partner with Photuris not only because Marconi has a somewhat competing product (as was stated), but they don't have the support structure to provide post-sales support of the product.
RGreg 12/5/2012 | 2:08:21 AM
re: Photuris & SBC: The Inside Story I suppose it could be either arrogance, or perhaps it was a misunderstandinhg of the way SBC - or any large bureaucratic organization - works.

Back in my previous startup career we had started a very good relationship with SBC's testing group in Austin. They had heard our presentations, tested our products, and liked what they saw. I made several trips down there to discuss technical details and even worked out some design changes they suggested.

That went on for close to a year, with nothing to show for it in the end. The problem is that regardless of how much the research guys in Austin like things, it has to be approved by people much higher up before signatures are put on paper. And that (sad to say) is dominated by different criteria than if you "nailed the RFP on the technical, economic and operational aspects."

It doesn't surprise me one whit that they died because they had no partner - one of those aforementioned criterion is that the company be a stable supplier for years to come.

-------------
RGreg
Peter Heywood 12/5/2012 | 2:08:23 AM
re: Photuris & SBC: The Inside Story One of the things that puzzles me is why Marconi doesn't appear to be a player on this project.

Why?

Because Marconi has been shipping an ROADM - the PMA 32 - for at least 3 years, to BT and some other operators.

I wrote an article last May that compares Tropic and Photuris with Marconi:

http://www.lightreading.com/do...

Here's an excerpt:

G«£WeG«÷ve had the product in PTT networks carrying live traffic for more than two years,G«• says Abel. However, he concedes that Marconi had some early production problems with the PMA32, which delayed deliveries for a while. This raises the question of whether Tropic and Photuris will encounter similar problems when and if they go into commercial production.

END QUOTE

Actually, there's a pretty interesting story surrounding this:

The guts of the PMA32 is a liquid crystal array sort of device from Corning. I think it's the "Purepath Dynamic Spectral Equalizer" that won an award at OFC 2000.

See: http://www.lightreading.com/do... and scroll down

I think that Corning has discontinued production of this device, but my understanding is that Marconi bought a vast number of these arrays at the time it won the BT contract, and many of them have been sitting in a warehouse gathering dust since then.

Marconi bought the arrays for a very high price, when components were in short supply and carriers were expecting to have to expand the capacity of their backbones by a huge amount. It turned out that BT had eyes bigger than its stomach and didn't call forward a lot of the capacity that it had planned for in the monster frame contract it had awarded Marconi.

I've heard it said that this really hurt Marconi, who'd priced the PMA32 so that they almost gave away the chassis and then made a killing on the line cards. As it worked out, a lot of the PMA32s haven't been populated with many cards, and Marconi would have caught a cold on the project, it wasn't for the fact that it went down with double pneumonia from all the other mistakes it made.

John Mayo wrote some articles for the Financial Times pointing to the fact that Marconi didn't just blow a lot of cash on buying Fore Systems etc. It also blew a lot of cash on buying things like this huge stock of Corning arrays.

Of course, this is all water under the bridge now. You'd have thought Marconi would be doing more to capitalize on its ROADM experience, and maybe get some use out of all those arrays that its past shareholders paid for.
Peter Heywood 12/5/2012 | 2:08:23 AM
re: Photuris & SBC: The Inside Story I'm working on something.

If you have information, please get in touch.

[email protected]
veeja1972 12/5/2012 | 2:08:23 AM
re: Photuris & SBC: The Inside Story I saw this arrogance first hand myself...good riddance to these guys...
bwana 12/5/2012 | 2:08:25 AM
re: Photuris & SBC: The Inside Story We were never long haul. always metro...

PM arrogance - oh yeah! to customers, engineering, potential partners... They knew better and kept chasing 1 major carrier for business with blind, unfounded confidence and the we don't need no stinkin' partners mentality.





solver 12/5/2012 | 2:08:26 AM
re: Photuris & SBC: The Inside Story Could it be Arrogance?
If all the technical accolades are true, it's truly a sad yet puzzling story. How could Photuris have blown all of their repeated chances?
How could they have squandered everything they had?
Why couldn't they strike a deal with someone, anyone?!
I have met a fairly senior person on the Photuris product management team nearly two years ago, after they switched product strategy from long haul to metro.
While I had no doubt about that person's and the company's talent and technical acumen, I could not stand the utter arrogance of that person.

I guess bad-mouthing and belittling every other company's people (that you don't really know), will ultimately come back to haunt you.

I would love to hear more of this story.
fancypants 12/5/2012 | 2:08:27 AM
re: Photuris & SBC: The Inside Story obdurate...

I had to look that up.
bwana 12/5/2012 | 2:08:27 AM
re: Photuris & SBC: The Inside Story AV is making new friends I see. I'm shocked that AV's letter made it to the LR pages. Wow!

During my tenure there the lies continued to flow as they are now.

Have some good thoughts for the hard-working and oppressed Photuris people out looking for work in a tough NY/NJ engineering job market.

Many of the obdurate people in AV's inner-circle are getting what they deserve - too bad that other truly good people are suffering also.
bwana 12/5/2012 | 2:08:29 AM
re: Photuris & SBC: The Inside Story It's not going to happen. Yard sale next -

Anyone need a mirror, amp or a 2.5G/10G transponder?



tomlight 12/5/2012 | 2:08:30 AM
re: Photuris & SBC: The Inside Story somebody bring photuris back to life!

im curious how they will do with other RBOCs.....
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