Vello Pulls a Shocker: Profitability

Vello Systems , the former OpVista, is coming clean about its existence today, saying it's going beyond optical transport into packet processing.

The world already knew that from Vello's Website. (See OpVista Gets Another Go.) The surprising part is that the company, reborn in July, claims to be making a profit.

"We're a profitable, cashflow-positive company," says CEO Karl May, who was also the last CEO of OpVista. In fact, he says, Vello hasn't had to get any new funding.

The company is announcing today that some Tier 1 service providers -- plural -- have deployed its CX16000 optical transport system. The release names only PrimaCom AG (Nasdaq: PCAG; Frankfurt: PRC), from Germany. (See Vello Deploys 40G/100G.)

May also confirms that Vello is still getting revenues from Cox and Time Warner, the MSOs that bought OpVista gear years ago. (See Tyco Teams With Modulight and Time Warner Deploys OpVista.)

OpVista really is gone, taken over by a creditor that simply wanted its money back. In July, May started Vello with the intent of building on OpVista's technology with add-ons such as packet processing. It wasn't a slam dunk, given the whole recession thing.

"You'd talk to very senior people who said they didn't forecast a future beyond July 2009. They were seeing a complete collapse in the market. And yet, we had these orders," May says.

Not all of OpVista's staff made the jump to Vello, but the company has a staff of just fewer than 50 and has been hiring lately. To get to profitability, May says Vello trimmed in a lot of places, such as his own salary.

"There are little things that we cut, like janitorial service. Our ledger person and I alternated taking out the trash," he says.

So, there you have it. The secret to running a profitable optical company is to take out your own trash! (May notes, however, that Vello has started paying for janitors one day per week. The bubble is back!)

Vello has named its technology the Adaptive Optical Services Ring (AOSR). At its heart, it uses OpVista's technology for putting a 40- or 100-Gbit/s signal onto fiber suitable for 10-Gbit/s transmission. That's done by packing multiple carriers into the space of one ITU wavelength. (See OpVista Runs With DMC for 40-Gig.)

To improve on OpVista's work, Vello added heterogeneous photonic integration, presumably lowering the cost associated with the optics. It's also used off-the-shelf chips and some in-house software to add Layer 2 and 3 processing to the CX16000.

Another difference from OpVista is that Vello intends to look well beyond the metro market. The company is planning to talk about edge and enterprise applications late this quarter -- that would be right around the OFC/NFOEC conference -- and it's gotten AOSR to work adequately for long-haul transport, May says.

— Craig Matsumoto, West Coast Editor, Light Reading

Optics1and1 12/5/2012 | 4:44:51 PM
re: Vello Pulls a Shocker: Profitability

Dear Craig,

as we learned there is a easy way to get a company profitable.


Run the old company into bankruptcy, push out the CTO and founder, continuing  without paying employees for month and not paying creditors. 


Founding a new company on the assets and IP's of the company you bankrupted.


Due to the proprietary technology, force the old  customers  to buy now Vello  gear (out of the OpVista stock)  to maintain their current systems or minor upgrades.


Its funny that Mr. May references Primacom, which deployed  only "old" 4x 2.5G OpVista technology. It would be interesting having  one of his T1 40G service providers as a reference  :-)

Maybe other optical vendors like Infinera, need to learn from Mr. May how to develop new product lines, with far less the 50 employees, not including the janitor :-)



Pete Baldwin 12/5/2012 | 4:44:51 PM
re: Vello Pulls a Shocker: Profitability

You've certainly got a point.  Losing some baggage and the old debt, plus getting a head start on R&D, plus creative salary options, is all certainly a help toward profitability. Having revenues from day 1 helps too; not every startup could have restarted this way.

But there's also the fact that a technology company founded today is going to be run differently from a company founded in 1999.  The whole industry struggled with that transition, and the only answer for a lot of them was to shut down.

I didn't have anything in particular in mind, but when I wrote this sentence -- "The secret to running a profitable optical company is to take out your own trash" -- I did kind of wonder how many layers of figurative meaning people could read into it.

bollocks187 12/5/2012 | 4:44:49 PM
re: Vello Pulls a Shocker: Profitability

optics it sounds you have identified that trash but it has not been taken out yet ?


Stan Steemer 12/5/2012 | 4:44:17 PM
re: Vello Pulls a Shocker: Profitability It is a scary thing when everyone of you customers has an rfp on the street to replace your technology. nobody cares about 40g its all about 100g. what is the one thing that is constant in Opvista and Vello? maybe that's the reason for lack of success??
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