Mahi Networks Inc. is restructuring again, to put it mildly.

Light Reading has learned that Mahi is consolidating its company's operations around its East Coast facility -- the South Piscataway, N.J., building it got when it bought Photuris. The company is also preparing to sell off its flagship Mi7 Multi-Service Core Aggregation System (MCAS).

Mahi's VP of marketing, Ron Longo, who was reached by phone Tuesday, says the company is "in active discussions" with "several suppliers" about selling its Mi7 product line, along with its "West Coast switching division."

Mahi’s Mi7 provides STS1 grooming, Sonet crossconnect, switching, and Ethernet transport features in one big system that's designed for the largest carrier central offices. Unfortunately for a privately held, venture-backed vendor, the sales cycles for a device of that magnitude are long and arduous, and the possible customer list is pretty restricted.

Longo says several companies have expressed interest in two carrier opportunities that the Mi7 is involved with. He won't name the carriers, but says one opportunity is a "southeast regional deployment" and that the other is "a Tier-1 design win that will kick off in the next few months."

Light Reading first contacted Mahi as industry rumors had the company closing up shop and going out of business. Recruiters in the area had told Light Reading that resumés were flowing from the company to competitors at an "above normal" clip.

Mahi, it turns out, isn't going out of business, but not much of will be left in Petaluma, Calif., when all is said and done. "The majority of our operations will be consolidated to the East Coast," Longo says.

It's not a surprise that Mahi is morphing. The company has changed its look several times since it was founded in 1999 as it has looked to diversify its products and find a steady revenue stream. In the past 14 months alone, Mahi has:

Longo says he can't give more details about how many employees will be laid off, as the restructuring is still in progress. He also declined to comment any further on possible new homes for the company's Mi7 gear.

In years past, Mahi's Mi7 has been linked to BellSouth Corp. (NYSE: BLS), MCI Inc. (Nasdaq: MCIP), and Qwest Communications International Inc. (NYSE: Q), through rumors and industry sources, but the company has only announced deals with Buckeye TeleSystem Inc. and Scana Corp. (See Mahi Secrets Surface, Mahi: Not Just Sushi Anymore, Mahi Nabs $70M, Photuris Assets, and Buckeye Extends Mahi Deployment.)

Mahi's acquired product lines seem to be enjoying more meaningful revenues so far (see Metro DWDM Action Heating Up). In fact, getting into the ROADM market has given Mahi more chances to hit it big with carriers, as several incumbents are asking for a single device that can provide integrated transport and switching at both the wavelength and Sonet layers (see Report: ROADM Market to Nearly Double and Vendors Race for Reconfigurability).

— Phil Harvey, News Editor, Light Reading