It's curtains for one more all-optical startup, as execs decide to give back the remaining cash

April 23, 2003

2 Min Read
Network Photonics Shuts Down

Network Photonics Inc. closed its doors yesterday, opting to give its remaining $30 million in cash back to investors rather than burn it waiting for a market recovery (see Network Photonics Closes).

Based in Boulder, Colo., the company had 66 employees on its last day.

CEO Steve Georgis sent a note to analysts yesterday, explaining that the company didn't want to wait in vain for a market recovery. ”It has become obvious that the market for photonic switching and reconfigurable optical networks is not going to emerge in any big way soon. When it does emerge, we estimate that the size of the addressable market will be small," he wrote.

Given that outlook and the substantial money the company raised (see Network Photonics Raises $106.5 Million), Network Photonics didn't appear likely to recoup. "We couldn't come up with a good market scenario that was going to give a good return on investment," Georgis said in an interview.

Network Photonics started out building an all-optical switch for metro access networks. As the market bubble deflated, those plans were scaled back, but the company did manage to produce a subsystem in early 2002 (see Network Photonics Scales Back and Network Photonics: A Corvis Copy Cat?).

As with most all-photonic switching plays, Network Photonics based its technology on micro-electro-mechanical systems (MEMS), using tilting mirrors to shunt light to the appropriate ports. But the company's CrossWave system added a twist: a prism-like filter that split a WDM stream into component wavelengths.

This allowed Network Photonics to use just one row of mirrors, one per wavelength. Other MEMS hopefuls -- the still-surviving Calient Networks Inc. among them -- used square grids of mirrors, and the most ambitious startups allowed those mirrors to swivel in arbitrary directions, the so-called "3D MEMS" approach. Network Photonics claimed its way was cheaper (fewer mirrors) and easier to control.

Larger optical MEMS switches never took off, however -- a trend most dramatically marked by the recent closure of OMM Inc. (see OMM: The End Is Near). Now, Network Photonics' time has come.

Georgis and a skeleton staff will remain to sell off the company's assets. That so much technology might never resurface -- not just Network Photonics', but the industry's in general -- is going to be one of the "tragedies" of the recession, he says.

"A lot of breakthrough R&D has been done [in the industry as a whole], and a lot of that is going to just go away," Georgis says. "A couple of years from now, people might look back and say, 'What happened to Network Photonics? They had a product we needed.'"

— Craig Matsumoto, Senior Editor, Light Reading

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