For the second year in a row, MRV Communications will be heading to the Optical Fiber Communications conference later this month spreading the message that it has refocused its attentions, realigned its priorities and has a new attitude about meeting the needs of its customers. Will the second time be the charm?
The latest round of changes have been driven by new President and CEO Mark Bonney, who took the helm in December and presided over his first quarterly earnings call for MRV Communications Inc. (Nasdaq: MRVC) this week. "One of the first things I learned is that in our effort to develop and introduce a combination of packet and optical transport technology in one product, we somewhat have taken our eye off the ball in our network equipment business," Bonney said on the call. "That diverted attention from core products." (See MRV Names Bonney President, CEO.)
The new chief said that to get the company's eye back on the ball, he introduced a policy of "first do no harm" in regard to support existing products and customers. "They made us what we are today, and we must improve upon them to grow, not cast them aside in favor of the next best thing."
These comments come one year after MRV, just prior to OFC 2014, made the case that it had bounced back from a period of personnel changes and indecisiveness about its business course to refocus in part on engaging with more Tier 1 customers, as well as investing in the software and virtualization aspects of the packet optical migration. Bonney's comments, though general, hint that while chasing larger customers, MRV's attention on existing customers strayed. (See MRV Looking to Regain Momentum.)
The lack of attention was evident in the fourth quarter results, in which MRV posted $43.4 million in revenue overall, compared to $50.7 million for the same period in 2013. In particular, the network equipment business collected about $20.6 million in revenue, down from about $25.9 million in the fourth quarter of 2013. (See MRV Revenue Shrinks as Firm Refocuses.)
However, Bonney said the renewed focus already is paying dividend. MRV made changes in its product planning processes to grant more flexibility responding to specific customer demands, and the change quickly led to a new project with an existing customer that could mean millions of dollars in new revenue, Bonney said.
MRV also is taking a more step-wise approach to the rollout of its latest product platform, the OptiPacket metro edge system, later this year. Bonney said the product will come out in two versions with two separate use case focuses, and with a different MRV team to support each version. Zeev Draer, vice president of technical marketing, said on the earnings call that initial orders for the OptiPacket are expected to come in during the first half of this year.
Meanwhile, the software migration discussed last year is something that hasn't changed, and remains vitally important. MRV this week announced a software-based dynamic wavelength routing feature for the ROADM in its OptiDriver platform. The new feature brings further intelligent optical network control functions to the platform as SDN is becoming more of a factor at the optical layer.
— Dan O'Shea, Managing Editor, Light Reading