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Routing

Pluris Shutdown Confirmed

Core router maker Pluris Inc. has shut down amid financial turmoil, several of its former employees say. The company held an "all-hands" meeting on Monday morning in a vacant building adjacent to its locked offices to break the news, sources close to the company say.

Pluris announced that it had closed a $53 million funding round in February and, at that time, boasted that it had raised some $215 million since its inception (see Pluris CEO Bolts and Washout Rains $53M on Pluris). Now, however, several close to the company say that Pluris only received about half the money it was supposed to get during its fifth funding round before investors decided to pull the plug.

Pluris executives have not returned calls seeking comment. Certain Pluris board members have agreed to talk on the record later today.

As part of its most recent financing, Pluris reworked its entire capital structure to entice investors and employees to stick around. One month later, however, Pluris CEO Joe Kennedy left the company and Pluris has been steadily thinning its ranks ever since (see Pluris Hangs On).

For a brief period, Cynthia Ringo, the former CEO of CopperCom Inc., took the top job at Pluris. All the while, though, Ringo and the company made it clear that she wasn't the permanent replacement for Kennedy.

Pluris first announced its product in the spring of 1999 but then went quiet for several months while it frantically built the product it had already hyped (see Pluris Is Back). In June 2000, then-CEO Joe Kennedy admitted that exposing itself too early was a mistake. "The programmers were still writing code when they launched the product," Kennedy told Light Reading. "Then we had nothing else to announce. We couldn't announce that our last announcement was wrong."

The company announced it had closed a funding round of $100 million in November 2000. At the time, it believed that amount to be enough to see the company through to an initial public offering (see Pluris Preparing for Its Public). In February 2002, the company reorganized its capital structure and expected to receive $53 million in new funding from its investors.

As part of its capital reorganization, Pluris sent its shareholders paperwork about two months ago, informing them that it was executing a reverse split, according to one shareholder who asked not to be identified. A reverse split occurs when a company reduces the number of outstanding shares and increases the price per share proportionately.

Pluris shareholders were taking part in a 20-to-1 reverse split, according to the shareholder. This means that for every 20 shares they owned prior to the split, they would have one share afterwards.

Adding to Pluris' financial strain were several factors, say those close to the company. For one thing, the company had fallen out of favor with Mission West Properties, a Silicon Valley landlord, over a property dispute. Mission West sued Pluris in June 2001 and the two companies later settled.

There are also unconfirmed rumors that IBM Corp. (NYSE: IBM) required a hefty upfront fee -- upwards of several million dollars -- to produce the custom chips that would power Pluris' core router products.

As if that weren't enough, carriers who typically buy core routers (well, those that have survived) are having financial worries of their own. Pluris joins core router startups such as Coree Networks and IPOptical as another casualty in an overcrowded market.

In the past few months, former employees say the company tried to sell itself to at least two competitors -- Procket Networks Inc. and Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7) -- but neither were interested.

Eventually, the uncertainty of Pluris's future began to take a toll on the more than 100 employees left. "After the last round of layoffs, people had pretty much given up hope," says one former Pluris engineer. "We were just going through the motions."

— Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com
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skeptic 12/4/2012 | 10:08:08 PM
re: Pluris Shutdown Confirmed Pluris joins core router startups such as Coree Networks and IPOptical as another casualty in an overcrowded market.
-----------------

- I would not consider Coree networks to have
been an core router.

- IPoptical was a core router company, but very
weak in terms of funding and other aspects.
The market didn't bring them down so much as
other things did.

Ironbridge is a better example of what your
looking for.
xoip 12/4/2012 | 10:08:04 PM
re: Pluris Shutdown Confirmed It appears that their sw enggs have found jobs - here in the bay with .......
XoIP
cajoel 12/4/2012 | 10:08:01 PM
re: Pluris Shutdown Confirmed Pluris had some very good points.

Among them:

Fiber-Optic chassis backplane for easier
upgrades.

Protocols that survived RP swaps.

Flexible link bonding of POS.
(even of unequal capacities)


It's unfortunate that this company won't be around to keep the status-quo on their toes.

Hopefully their IP will sell off to someone who can leverage it well.

hikari 12/4/2012 | 10:08:00 PM
re: Pluris Shutdown Confirmed Anyone has an idea on Chiaro's future?

I think the description matches line by line:

3~4 yrs of continuous funding,
extreme stealthiness,
core router business,
etc.
ExPlurisEmployee 12/4/2012 | 10:07:59 PM
re: Pluris Shutdown Confirmed > Pluris had some very good points.
>
> Among them:
>
> Fiber-Optic chassis backplane for easier
> upgrades.
>
> Protocols that survived RP swaps.
>
> Flexible link bonding of POS.
> (even of unequal capacities)

Pluris was pretty much doomed after V.C. forced
the russian guy who invented most of the Pluris technology (Mr. Vadim Antonov) out when he chose to stand up to protect engineers against managerial BS. Half of the engineering team promptly left after that, delaying the development (particularly software) by 1-2 years and ultimately causing the company to miss the window of opportunity.

The later developments at Pluris (inept executives, bloated staff, marketing pushing non-existing boxes, lack of technical direction, hardware heavily dependent on exotic custom parts) should've given any competent investor a pause. What is really amazing is that V.C. kept throwing enormous money at it, apparently without bothering to learn what was really going on.
fabric 12/4/2012 | 10:07:58 PM
re: Pluris Shutdown Confirmed If you think Mr Vadim Antonov invented most of Pluris's technology you must be kidding. The guy was completely incompetent in the first place.
VoidMpls 12/4/2012 | 10:07:55 PM
re: Pluris Shutdown Confirmed Agreed, i think you're outsider so u dont know the latest product of pluris. Mr. Vadim has got nothing to do with it.

But in some point you're right, if they have more smarter management...i think they'll make it or at least survive 'til 04. The thing is, marketing is very suck as well. Especially if they dont know what's the difference between L2VPN and GMPLS

:)
skeptic 12/4/2012 | 10:07:54 PM
re: Pluris Shutdown Confirmed Anyone has an idea on Chiaro's future?

I think the description matches line by line:

3~4 yrs of continuous funding,
----------------

Chiaro is in the same generation of startups as
Hyperchip/Caspian/Procket. None of these
companies are in real trials yet to my knowledge.
They appear to have started building a router
in 2000. The companys pre-2000 history appears
to involve (like hyperchip) doing switching
components.

And until they start showing up in real trials,
its hard to judge them. They are out talking
to people about trials, but until there is a
report of someone seeing actual equipment in
a lab, they are no more real than the others.

VoidMpls 12/4/2012 | 10:07:54 PM
re: Pluris Shutdown Confirmed i think they've on trial....

Most of the current core startup differentiate themself by several aspects:

fault tolerence (linecard,cc,fc),etc
backplane speed &
multichassis

bear 12/4/2012 | 10:07:53 PM
re: Pluris Shutdown Confirmed Pluris is a sad story but it really isn't unique. Honestly, where is the market for this breakthrough technology and who on god's green earth is in a position to buy it? Verizon? SBC? These ILECs are cautiously making 5 year plans and I haven't seen any new players on these lists. Capital expenses are on a shoe string budget. Even when the market does turn back up (and it will), carriers will be slow to rip out installed gear and replace it with next-generation, light shaping technology. The dog will need to wag the tail, not the other way around. This I believe will be the fundamental difference between business three years ago and business for the next five years. It makes you wonder if new firms like Infinera will wither away. Great stuff and plenty of interest but no serious volume buyers.
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