Meriton Grabs Another $17M

Meriton Networks Inc. has secured $17 million in funding, which it will use to complete trials and release a new access product.

The input brings Meriton's total funding to $46 million. The startup gleaned $18 million in September 2001, just before it changed its name from Edgeflow (see Edgeflow Scores $18M and Edgeflow Becomes Meriton). Meriton's investor list includes the same contributors as last time, minus one (BTG International) and plus one (VentureLink Fund of Skylon Capital Corp.).

Meriton's president Mike Gassewitz says his company's new money will go to completing trials with four carriers worldwide, including one in Europe and three in North America (mum's the word on the names, however).

Meriton also plans to add a new product to its line by mid 2003, namely a small access unit called the 3300, which will enable the vendor to extend the reach of its 7200 OADX. That product is a transport device that combines the functions of an optical crossconnect and a DWDM multiplexer (see Photuris, Meriton Unveil Metro Wares and A New Optical Taxonomy).

Meriton competes against the likes of other metro DWDM/CWDM wavelength switching startups such as LuxN Inc., Movaz Networks Inc., and PacketLight Networks.

Meriton competes most directly with Movaz on cost per port. But in moving to the 3300, Meriton has acknowledged that it needed a wavelength access box, which Movaz already had.

"Our 3300 will take Movaz's RAYexpress head-on. We'll have an end-to-end metro solution," Gassewitz says.

Meriton's news highlights ongoing support for a small group of optical transport and edge startups, including Movaz, that offer highly differentiated products. In other news:

  • Movaz says it's sold its RAYexpress -- an 8-wavelength optical add/drop mux for small central offices that handles Sonet/SDH and Gigabit Ethernet traffic in metro applications and supports Multiprotocol Label Switching (MPLS) -- to the Georgia Institute of Technology. That institution will use it to provide point-to-point Gigabit Ethernet links over DWDM between 80 sites, Movaz says.
  • Tropic Networks Inc., which plays in a slightly different market (packet-centric optical edge systems), has announced that it's finalizing a $20 million round. This news, however, was accompanied by a layoff of 30 or more employees, or 25 percent of its staff (see Tropic Refocuses, Lays Off).

But even with more money, the big question now is whether Meriton can survive in a sharply reduced market, where customers are less willing to try startup approaches and are turning instead to their traditional suppliers for help.

"All new transport and switching startups will have a hard time in this market," says Scott Clavenna, president of PointEast Research LLC and director of research at Light Reading. He notes that instead of the longed-for market with incumbent North American carriers, vendors like those mentioned above may (for the time being, at least) have to focus on contracts with enterprises, community networks, hospitals, universities, and the like.

They also have an eye on international opportunities, particularly in the Asia-Pacific region. Meriton just hired a managing director in Singapore and plans to focus on China, Korea, and Japan, in that order.

Still, Gassewitz acknowledges that the future is still murky as to when the ongoing downturn could start to favor startups on a broader scale. "We think we've hit bottom and are on the plateau," he says. But he admits prospective customers still have their "guns pointed inwards" and are so intent at looking at operational savings and their own restructuring that capex is still in question.

— Mary Jander, Senior Editor, Light Reading
COMMENTS Add Comment
MrLight 12/4/2012 | 9:10:40 PM
re: Meriton Grabs Another $17M OEO switch vendors like Meriton,Movaz,LuxN, Tellium etc will have a tough time of it without having sub-wavelength switching and re-arrangement capability in their products, as well as the ability the directly terminate DWDM Rings.

Assuming the Meriton OADX 7200 is based on the "Vitesse VSC3140 144x144 fully non-blocking asynchronous crosspoint switch designed to carry broadband non-return to zero (NRZ) data streams at rates up to 3.6Gb/s", announced by Vitesse on Aug.13.2001 or the smaller the VSC3138 (40x40) and the VSC3139 (72x72) announced by Vitesse on Sept.16.2002...

This means the Meriton OADX 7200 only provides wavelength granularity. However, I should point out it is capable of unframed signal switching versus some switch vendors, like Tellium, that are framed (SONET/SDH)signal switching only.

True, "moving to the 3300, Meriton has acknowledged that it needed a wavelength access box, which Movaz already had." helps, but it only provides sub-rate multiplexing capability which the existing DWDM vendors like Nortel and Ciena already have. What is required is the capability to provide cross-wavelemgth sub-rate switching.

Without that, the Meriton,Movaz,LuxN,Tellium etc. OEO switch vendors will have a tough time of competing with the grooming offered by the next-generation DWDM/SONET/SDH switch boxes with GFP and Virtual concatenation, direct DWDM/CWDM Ring termination, etc. support.

But only time will tell.

But still, what better time to get money then at Christmas, so Merry Christmas Meriton.

MrLight ;-)
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