Trellis: 'No Shut Down'

In a somewhat strange move today, Trellis Photonics denied an announcement it made earlier this week -- that it was closing down its U.S. headquarters (see Trellis Shuts Down US HQ)

”We are not shutting the U.S. office; we are restructuring it,” says Trellis chairman Aaron Mankovski, who is also managing partner of Israel's Polaris Venture Capital, one of Trellis’s backers.

Trellis has concluded that it won’t be able to sell any of its innovative all-optical switches, based on electro-hologram technology, until 2002, according to Mankovski. As a result, it’s reviewing its business strategy.

Trellis isn't in trouble: It's just reviewing its options in the light of changed circumstances, Mankovski says, adding: "We're well financed". But likely changes in business strategy will mean that Trellis needs “a different mix of people” in its U.S. office, he says.

When Trellis got its latest round of funding last October, it was planning on shipping its first products in the first quarter of this year (see Trellis Gets $25M For Holographic Switch). That hasn't happened.

At that time, Trellis was focused on selling complete switches to service providers. It was also planning to make big switches that could handle up to 1,920 wavelengths to start with. That put it into competition with the likes of Calient Networks Inc., which is making a large-scale all-optical switch based on MEMS (micro-electro-mechanical systems) technology.

The market for these types of switches has changed radically since then, partly because a lot of startup carriers have gone bust or slashed spending plans, and partly because nobody’s too sure whether there’s a real need for a lot of monster switches in carrier backbones. Calient itself recently announced cutbacks because of this (see Calient Cuts 60 Jobs).

It seems likely that Trellis may conclude that it should focus on smaller switches and, rather than building complete switches, shift towards making electro-holographic components that could be used by system vendors to build their own.

“I’m not ruling out some of those possibilities,” Mankovski told Light Reading today.

If Trellis does make such a move, it will represent serious competition for another Israeli startup, Civcom Inc., that appears to be developing products in this area (see Startup Gets Money for Mystery Switch ).

— Peter Heywood, Founding Editor, Light Reading
http://www.lightreading.com