Vello Pulls a Shocker: Profitability
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