Tahoe Confirms Cutbacks
Wireless service node startup Tahoe Networks has confirmed rumors that it has laid off staff but insists that customers will implement its Mobile Internet Edge (MIE) infrastructure platform before the end of the year.
The layoffs are part of a general restructuring last week that also saw a transfer of power between the cofounders, with company president Dr. Arthur Lin taking over the role of CEO, replacing the firm's "visionary" Anthony Alles, who will work with the board on company strategy.
Alan Cohen, VP of marketing for Tahoe insists that the layoffs will not affect the company. "They're in the low double-digit percentage range," he says. "The core engineering and customer facing functions haven't changed at all."
Tahoe is locked in a battle with Megisto Systems, Starent Networks, and Watercove Networks Inc. to create next-generation service nodes (PDSNs/GGSNs) that will allow carriers to develop and offer a variety of wireless data services (see Having a Flutter on the GGSNs).
Tahoe has tended to concentrate on CDMA2000 networks and the Asian market especially, opening a Japanese subsidiary and forging a distribution agreement with Oki Electric Industry Co. Ltd.. "We're about to announce a couple of others," Cohen says.
However, Tahoe says it has not neglected the European market entirely. Cohen says that the company is working on a GSM/GPRS-based version of its product.
It remains to be seen which of these startups -- if any -- will actually end up as the supplier of choice to the carriers. Phil Marshall, program manager of mobile and wireless technologies at Yankee Group told Unstrung in June that the next 12 to 18 months will be crucial for the companies to move beyond customer trials, often with unnamed partners, and actually get their products into carrier networks. "The most important thing for them is to establish incumbency," he said.
In today's environment, operators are leery of working with startups, and many are seemingly unconvinced of the value of these new nodes.
Tahoe has raised around $50 million in funding. Cohen would not comment on how much money Tahoe has left or what its burn rate is. However, he said that the company expects to have another "financial event" soon.
— Dan Jones, Senior Editor, Unstrung