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
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wilecoyote 12/4/2012 | 10:01:19 PM
re: Pluris Shutdown Confirmed Are getting cancelled left and right. I know of about 7 that are either DOA or getting yanked as I write this note. Serious projects with an average of around 50-100 engineers, $10-30M budgets.

So, show me one new product at CSCO including CXC that even if it does get out, anyone will buy. Oh boy! Andiamo will ship 24 months from now even though not one sales guy at CSCO can spell "storage." Lemme at 'em!

Two facts about Cisco:

1) They're becoming bottom feeders in acquisitions. Now they've let the JNPR genie out of the bottle and it's a lingering problem. There are other real genies out there but CSCO won't buy them because the price is too high and now the startups and their backers are pissed at CSCO and are preparing to sell to others just to spite CSCO. JUnisphere, Riverstone and Foundry and even a couple of startups are beating them in meaningful accounts, they are getting eaten alive at the edge of the network (even little invisible Luminous is kicking their ass in 2 or 3 deals I know of), Extreme is for real in enterprise side, etc. No wonder Nuti bailed. And yes, he bailed. He WAS NOT FIRED. AYR, Navarro, Hammerhead? Who cares? CSCO is looking fairly clueless right now, balance sheet notwithstanding. I've always said it: besides the aging Catalyst franchise, and the vulnerable GSR, they are weak in a LOT of categories.

2)The good innovative, creative VPs of Engineering like Vu Ngyyen are out building better mousetraps. Can they survive long enough to matter? I'll bet on those boxes with other labels on them like Tellabs, ALA, NEC, Fujitsu, etc. vs. standalone brand, against CSCO products any day of the week.

Wake up CSCO. Or better yet, rockabye baby.
Light-bulb 12/4/2012 | 10:01:21 PM
re: Pluris Shutdown Confirmed :) No I give you my word I do not work for an RBOC. I'm merely asking the opinion of the audience?
As to Cisco Buying Polaris it makes sense for only one reason... Well really several if you count the exec ties. Cisco is working on it next Gen Cross-Connect Probably code Named "CXC" for Cisco Cross-Connect, but it won't have VT grooming capability. Basically a Coredirector with Cisco Name. So something with Dense VT grooming makes good sense... the problem??? Does Polaris have a Real working VT grooming capability?

"Just how many licks does it take to get to the center of a Tootsie roll Tootsie pop?"

Aha, The world May never know...

wilecoyote 12/4/2012 | 10:01:35 PM
re: Pluris Shutdown Confirmed Well, light-bulb clearly makes sense. Carriers are more likely to make bets on private, small companies in edge type applications, access as an example, MAYBE edge routing. But when's the last time a large cross connect was deployed in a real carrier's network (not CLEC) that was built by a startup?

I personally believe Polaris has a fairly strong proposition but most likely as part of a larger company. CSCO will buy them is my prediction.
52616 12/4/2012 | 10:01:36 PM
re: Pluris Shutdown Confirmed Light-bulb,

You must work for one of the incumbents. If you don't, you sure sound like you do.
Light-bulb 12/4/2012 | 10:01:41 PM
re: Pluris Shutdown Confirmed Very Valid JB. You have to have an alternate source. Make sure you don't have a Drive-by looting! Yes we've all seen it happen. Very valid point.
My question to the audience still... "Would you want a Startup, a box with zippo live traffic on it, that scales to 200k VT grooming sitting in the Core of your network? Would you be willing to be the first FOA for it??"

kampar 12/4/2012 | 10:01:44 PM
re: Pluris Shutdown Confirmed
>I never liked those French... (Just kidding-well no not really)

lol. i seem to remember that a certain french company acquired certain digital cross-connect technology and products from a very american source - somewhere around june 1998 for $4Bn or so - namely DSC out of texas ...... but I guess we could blame the french anyway!
mrcasual 12/4/2012 | 10:01:46 PM
re: Pluris Shutdown Confirmed For those that want some interesting reading go to the following link:


Amazing to read some of these and watch the carrier try to explain the outages. Even funnier are the "How can this be prevented" sections.

If I remember correctly less than 10% (?)of all network failures are truly related to the box (H/W or S/W) failing. Usually there is some form of operator error involved.

Now, if the user interface is stupid, you could argue that the number of operator errors would be higher but I don't think they track that yet.
jamesbond 12/4/2012 | 10:01:46 PM
re: Pluris Shutdown Confirmed Why would I want to repeat the last 10 years with some new company and go through the same pains when I can choose my vendor have them acquire or develop technology, support that technology and help me implement?


At some point these vendors start looting
if they think customer isn't going to buy
from anybody else. no?
Light-bulb 12/4/2012 | 10:01:48 PM
re: Pluris Shutdown Confirmed Yes, you are right we can do more than imagine. Good research On Bell Atlantic. Yes that was some outage good god 28 hours! 6,000,000 blocked calls. It was huge.
I never liked those French... (Just kidding-well no not really)

Actually my point is made even clearer I hope. Carriers and their leading vendors have become partners in their network. They have experienced things together they have shared the pains of Growth, outages etc. Yes, Every Vendor even incumbents will have outages. My point though is how those vendors then respond and work the problem to get the network functional. Why would I want to repeat the last 10 years with some new company and go through the same pains when I can choose my vendor have them acquire or develop technology, support that technology and help me implement?

Thanks for the info LGGS Great research there.

LightGaugeGuitarString 12/4/2012 | 10:01:53 PM
re: Pluris Shutdown Confirmed Lightbulb said: "Can you imagine dropping 128 OC-48s??"

LightBulb, we can do more than imagine...

Flashback, November 23, 1999...

4K+ DS3s, POOF!

And this DCS vendor was not a startup


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