more 10k highlights
PRODUCT DEVELOPMENT
All of the Company's research and development projects are geared toward
technological advances with the goal of enabling the Company to introduce
innovative products early to market. New networking and fiber optic components
are constantly introduced to the market. This product introduction is driven by
a combination of rapidly evolving technology and standards, as well as changing
customer needs. MRV's research and product development strategy emphasizes
continuing evaluation of emerging trends and technical challenges in order to
identify new markets and product opportunities. The Company believes that its
success is due in part to its ability to maintain sophisticated technology
research programs while simultaneously focusing on practical applications to its
customers' strategic needs. The following is a brief description of products
under development.
Red Sea product line. A growing number of Internet and application
service providers as well as cable companies are rolling out new Internet
network elements to provide lucrative services to a rapidly expanding subscriber
base. Reliable, scaleable and customized subscriber management is therefore
imperative for service provider customers. Recognizing this, MRV's Xyplex
subsidiary is developing the Open Subscriber Management System. The Red Sea
platform incorporates and integrates a number of technologies (IP Routing, ATM,
RAS) and interfaces (DS1/DS3, OC-3, Digital Modems, Ethernet) that have been
core competencies of Xyplex for many years. Feature sets of the Red Sea series
encompass the termination of broadband traffic flowing from cable modem
termination systems ("CMTS"), Digital Subscriber Line Aggregation Multiplexers
("DSLAM"), FTTC and Fiber to the Home Systems ("FTTH") and wireless systems.
In Reach product line. In recent years, carrier central office
facilities ("CO's") that were historically occupied by a single service provider
are being occupied by an ever-expanding group of new service providers as a
result of co-location agreements. Often such service providers demand new
installations with many proprietary network elements and create a need for a
solution that offers simple remote access, monitoring and control. Similar
trends of expansion and consolidation are occurring with Cable TV and wireless
providers. Each of these networks must have secure monitoring and management
capabilities and these must be available to a large and diverse support force
using different access methods. The Xyplex, NEBS compliant, In-Reach product
line provides a customizable universal management platform, offering secure
remote management for console access, alarm scan and distributions as well as
environmental and power monitoring and control. Xyplex's comprehensive solutions
offered in this product line are unmatched by the mostly smaller competitors who
tend to focus in specific areas because of limited capabilities.
OptiSwitch product line. A new generation of switching technology
designed to provide fiber-rich solutions for service providers and carriers in
large campus and metropolitan access networks, the OptiSwitch is designed to
support applications such as FTTC, FTTH and even Fiber to the Desk. This product
line consists of flexible chassis based layer 2 switches, plus a wide variety of
high-performance fiber optic modules, with a relatively high port density. The
OptiSwitch family of products include about 30 modules supporting Ethernet, fast
Ethernet and Gigabit Ethernet, with a variety of fiber optic connectors.
Advanced features include powerful optical transmission to support long distance
transmission of over 100 km, wire speed performance to support a fully loaded
configuration without degradation of speed, full network management and
redundancy.
Zuma Products. The Zuma Switch Router platform combines a high
performing switch router engine with supercomputer processing power. The switch
router engine provides 256 Gbps of wire speed bandwidth to support
configurations of up to 126 Gigabit or 504 10/100Mb Ethernet ports. Zuma
introduces a concept of network survivability with its intelligent fault
tolerance and built-in redundancy. It is designed to meet customer requirements
for traffic prioritization and bandwidth allocation with its ATM-like Quality of
Service ("QoS") implementation and fine granularity of policy-based flow
control. The supercomputing component consists of up to 64 high speed CPUs. A
256 Gbps system bus provides the necessary data transfer rates required for
maximizing the multi-CPU performance. This processing power can be used to
implement a wide range of standard and customized applications such as
network-wide probing, subscriber and traffic management and high-end access
device services.
New products under development in the area of fiber optics include
transmission products for cellular and personal communication systems which
allow transmission over fiber optic cable between sites and also fiber optic
components that will improve cable TV transmission and technologies that add
intelligence and manageability to optical layers.
15
There can be no assurance that the technologies and applications under
development by the Company will be successfully developed, or, if they are
successfully developed, that they will be successfully marketed and sold to the
Company's existing and potential customers.
At December 31, 1999, the Company had 208 employees dedicated to
research and product development. Research and development expenditures totaled
approximately $13,093,000, $25,817,000, and $35,319,000 for years ended December
31, 1997, 1998 and 1999, respectively.
CUSTOMERS
The Company has sold its products worldwide to over 500 diverse
customers in a wide range of industries; primarily, data communications,
telecommunications and cable. The Company anticipates that these customers will
continue to purchase its products in the foreseeable future. No customer
accounted for more than 10% of the Company's revenues in 1997, 1998 or 1999
Current customers include:
OPTICAL NETWORKING & INTERNET INFRASTRUCTURE
COMPUTERS AND ELECTRONICS GOVERNMENT AGENCIES
- AMP Incorporated - General Services Administration
- Black Box Corporation - Ministry of Agriculture, Germany
- Engel GmbH & Co. - Ministry of Justice, Netherlands
- Fujitsu Ltd. (Japan) - Ministry of Social Security
(Belgium)
- Intel Corporation - MITI (Japan)
- International Business Machines Corp. - South African Police
- Newbridge Networks - US Coast Guard
BANKING, FINANCE AND INSURANCE ISP, ASP & OTHER
- Bankgarot Sweden - ADP
- Chase Manhattan Bank - America OnLine
- GE Capital - Eastman Kodak
- HBOC - Sprint North Supply
- Nationsbank - The Walt Disney Co.
FIBER OPTIC COMPONENTS
DATA COMMUNICATIONS TELECOMMUNICATIONS
- Cabletron - Broadband Network Inc.
- Cisco Systems, Inc. - Ciena
- Alcatel - Marconi North America
- Nortel Networks - Tellabs
- Extreme Networks - Transcom
VIDEO AND VOICE COMMUNICATIONS INSTRUMENTATION
- Augat Communication Products Inc. - EXFO
- C-COR - GN Nettest
- General Instrument - Noyes Fiber Systems
- Kathrein Werke - 3M
- Texscan - Wandel & Goltermann
MARKETING
The Company markets and sells its products under the NBase
Communications, MRV Communications, West Hills LAN Systems, Xyplex and Xyplex
Networks brand names. Each product line has a dedicated sales and marketing
organization. At December 31, 1999, the Company had 329 employees engaged in
marketing and sales. The Company
16
employs various methods, such as public relations, advertising, and trade shows
to build awareness of its products. Public relations activities are conducted
both internally and through relationships with outside agencies. Major public
relation activities are focused around new product introductions, corporate
partnerships and other events of interest to the market. The Company supplements
its public relations through media advertising programs and attendance at
various trade shows throughout the year, both in the United States and
internationally.
The Company also establishes working relationships with trade analysts,
testing facilities and high visibility corporate and government accounts. Since
the results obtained by these organizations can often influence customers'
purchase decisions, a positive response from these organizations regarding the
Company's technology is important to product acceptance and purchase. Other
activities include attendance at technology seminars, preparation of competitive
analyses, sales training, publication of technical and educational articles,
maintenance of a Web site and direct mailing of Company literature. The Company
also believes that its participation in high-profile interactive projects such
as Bell South's FTTC project significantly enhances its reputation and name
recognition among existing and potential customers. |
