Another article from Forbes - Photon Valley is in Canada - Not California. The brains of optical networking is locked up in Lucent and Nortel.
Photon Valley.
Forbes, Nov 15, 1999 p59
forbes.com
Hardy, Quentin
IT'S OFFICIAL: LIGHT IS HOTTER than the Internet. The Oct. 22 initial public offering of Sycamore Networks, an optical
networking company, clinched it. The stock opened up 613% and closed up a mere 386% on the first day of trading, the
fourth-biggest one-day gain for a new offering. Switching at the speed of light took Sycamore from $40 million in startup funding
to a $21 billion valuation at the market's opening bell.
When money floods in, it's a good time to start new optics companies. One venture capitalist joined a $32 million funding round
for Cyras Systems after a two-hour meeting.
Just one problem: Precious few engineers can bend 40-gigabit beams of light around corners. Most of the photon brains are
locked up inside the leaders, Lucent Technologies and Canada's Nortel Networks, and a couple of research institutes. So the new
outfits are ripping into the old, particularly the old Canadian.
A week before Sycamore went public, Optical Networks of San Jose flew a senior Nortel manager from the middle of his vacation
in Greece, first class, to California. The prospect met the Midas-like venture capitalists of Kleiner Perkins, Optical's backers. His
wife saw four houses Optical had picked out for them, with details on each school district. He signed.
"There is no one in the Valley who knows how to do optical transport," says Optical's chief executive, Hugh Martin. "We have to
import all of our guys." He has so many Canadians that Kleiner paid for an Optical Networks hockey team.
Martin is merely trying to keep up with his rivals, who hire optics talent as if they're wooing defectors. E-Tek Dynamics raids
Chinese universities, putting newcomers in "halfway houses" where seasoned countrymen teach them how to drive, use a
microwave and pay rent.
Nortel is probably bearing the brunt of the raids because the Canadian company has a less attractive stock options package than
Lucent. Stephen Pearse, Cyras' chief executive, is a former Nortel executive who freely raids his old employer. In one week in
January Optical's Martin nabbed ten Nortel engineers.
Don't expect optics mania to end. Networking speeds--gigabits per second--go up exponentially, just the way computing power
goes up exponentially under Moore's Law. But with optics the speeds are doubling twice as fast.
Fast light, fast money.
Copyright Forbes Inc. 1999 |
