Wasik Plugs In at Turin
The difference? He doesn't sound like a CEO trying to paint a rosy picture for the press.
“Statements like ‘we doubled our revenue over the last year’ don’t really mean much right now,” Wasik says. “You know, it’s the old story -- it’s real easy to get to $100 million in revenue, but to go from there to a billion is harder.” [Ed. note: Tell me about it!]
Wasik arrived at Turin in November from across the way at Alcatel (NYSE: ALA; Paris: CGEP:PA), where he led the Voice Networks and Applications Software & Solutions businesses. Before that he worked at Petaluma stalwart DSC Communications and a couple of startups.
Wasik says he found no major dysfunction when he came to Turin in November. Rather, he has focused on several low-profile organizational changes, which he says are helping control the company’s burn rate.
Turin, named after the Italian city where Nietzsche went mad, started in 1999 and has yet to turn a profit, surviving to date on roughly $170 million in venture capital. That's saying something, especially given that Turin began life on the bubble, where it appeared to be the nerd of the crop of flashy Ethernet pure-plays starting up at the time. But, Wasik points out, Turin is still alive while a lot of the pure-plays have perished.
“Today, everything is TDM,” Wasik says. “And that’s where all the capital is sunk in the ground, so you have to maximize that investment.”
That down-to-earth strategy is what kept Turin in business through some very lean post-boom years; and lately the company seems to be finding its groove.
It signed up Japanese carrier NTT Communications Corp., inked reseller deals with Ciena Corp. (Nasdaq: CIEN) and Motorola Inc. (NYSE: MOT) (the two also became investors), and reached the 100-customer mark. A Heavy Reading report -- Telecom Recovery Investment Opportunities in March 2004 -- identified Turin as being among "the strongest IPO candidates among telecom equipment startups." Reports from trading partners note that Turin’s products are going head-to-head with those from Cisco Systems Inc. (Nasdaq: CSCO) and Nortel Networks Ltd. (NYSE/Toronto: NT) -- and winning.
The great majority of Turin’s customers are independent operating companies (IOCs), a class of customer that Wasik says never really stopped spending after the telecom equipment industry soured a few years ago. “The relationships are important and take time to build, but the sales cycles are shorter,” Wasik says of the IOCs.
And Turin isn’t turning down any new opportunities; lately it’s the wireless carriers that have come calling. The carriers need a way to more efficiently multiplex data connections onto a Sonet ring as wireless applications use more and more bandwidth. They are looking to Turin’s multiservice provisioning platforms (MSPPs), which combine a Sonet add/drop multiplexer, a digital crossconnect, and edge switching capabilities to help carriers squeeze wasted bandwidth from their backhaul networks.
Indeed, Turin says it has been in talks with possible wireless customers for six months, and will announce customers soon. "So far, they've been mainly the bigger guys –- Alltel and above,” says Wasik, referring to Alltel Corp. (NYSE: AT), the sixth largest wireless carrier in the U.S. “Between our partners and ourselves, there is some activity with all of them.”
Traditionally, a central, standalone, digital crossconnect system (DCS), such as the Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) 5500, sits at the mobile switching center (MSC) and aggregates the many T1 and T3 lines coming in from the wireless carrier’s cell towers. By placing multiple Turin MSPPs near those cell towers, the wireless traffic can be groomed and switched immediately, eliminating much of the idle capacity usually hauled back to the MSC.
“By distributing that switching and grooming out into the access network and closer to the cell towers, they can reduce the amount of traffic hauled to the MSC by up to 30 percent,” says Heavy Reading chief analyst Scott Clavenna.
With this “next-generation DCS” application, Turin may have gotten a jump on Tellabs, which has long ruled the wireless DCS space with its 5500 product.
Tellabs’ director of global portfolio marketing, Stuart Benington acknowledges that bandwidth inefficiency is common in the network between the base stations and the MSC. “There are economies to be gained” from the distributed grooming approach in which Turin’s devices are used, Benington says.
Benington says his company is now developing a pizza box-sized device that will reside at the base stations and “harmonize” the wireless traffic before routing it to the 5500 at the MSC. “There is definite potential for more inefficiency as higher-bandwidth, next-generation services roll out,” he says.
Meanwhile, Turin is expanding its IOC customer base at a rate of 10 to 15 per quarter, Wasik says. Most of them are North American carriers, although Wasik says his company will be announcing a large, new Korean customer soon.
Turin holds the No. 8 spot on the latest edition of Light Reading’s Top Ten Private Companies.
— Mark Sullivan, Reporter, Light Reading