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To: Johnny Canuck who wrote (35179)	11/17/2001 4:35:56 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 67962

All-optical metro start-up comes into the money By Elizabeth Biddlecombe, Total Telecom 13 November 2001 Optical start-up Opthos announced Tuesday that it has raised US$21.6 million in a second round of funding. This brings to US$36.5 million the total raised by the San Carlos, California-based company. Advanced Technology Ventures and the Sprout Group were the leading VCs in the deal. Other contributors include Ken Oshman, the Venture Law Group and Crosslink Capital. The money will be used to fund the expansion of carrier trials, according to Robert Lundy, President, CEO and co-founder. Opthos kit is already being trialed in one carrier lab while another trial is due to start after new year. Opthos's IW1000 True Optical solution is an all-optical solution for metropolitan networks that does away with the optical-electronic-optical (OEO) conversion of traffic. Because no electronics are involved, a single unit has a power consumption of 100 watts compared to other systems which can consume 3.5 kilowatts. Taking up less than one telco rack, Opthos' product is also smaller than other systems that typically require multiple racks. But the company's key claim for its technology is that it allows wavelengths to be shared among multiple clients and be reassigned according to changing traffic demands in milliseconds (the company's 'Instantaneous Wavelengths' technology). Wavelengths can also be managed individually. "Today you have to allocate a big block [of capacity] - you are forced to drop four wavelengths at a node if you only want one. With our system you can allocate one wavelength", Robert Lundy told Total Telecom. "We have set out to ease carriers' pain today", he said. According to Ron Kline, senior analyst, North American Optical Transport, at consultancy RHK, the Opthos solution, while receiving its fair share of marketing spin, is 'genuinely different'. "Marconi is the only one doing anything similar with an all-optical reconfigurable add-drop multiplexer, " he said. There are other start-ups in this space, Movaz being just one example. CEO Robert Lundy was at pains to point out that Opthos is already delivering on its business plan. "We are a trial stage company - we haven't announced [a product] which we hope to deliver someday. We have announced everything at the same time as we can deliver it." Kline pointed out that while the Opthos solution "drives the major cost out of the system" by being all-optical and not using any transponders. However he pointed out that to use it, routers, Ethernet switches and the like would need specialised optical interfaces that transmit at an ITU-compliant wavelength. As for whether carriers will really spend money with a start-up, Lundy conceded that carriers would like to get the kit they want from major vendors if they could, but added that the major vendors aren't supplying what carriers need. "Most new trends and standards have been started by early stage companies," he said. "It is hard for a big company to create new technologies." RHK's Kline suggested that operators with a significant network in place 'maybe wouldn't' go with a solution like that from Opthos. But he added, "If you are building a greenfield network you might be able to save money [using it]." To an extent though Opthos and other such start-ups are competing with the antiquated SONET/SDH equipment. "SONET is not designed to carry multiple wavelengths in a dynamic environment", said Lundy. "At conferences carriers tell you they are not buying any more SONET but the reality is that they will continue to buy it to expand some existing networks. But for new [projects] they are evaluating new opportunities." As for the slow down in spending, Lundy is optimistic, citing potential customers as the RBOCs and former PTTs in Europe as well newer metropolitan players in the U.S. such as Sigma Networks, Looking Glass Networks and Sphera Optical Networks, who, it is reported, have around $1 billion in debt and equity to spend on building out in the metro core. Both Robert Lundy and co-founder and chief technical officer, Joe Parker, are seasoned entrepreneurs in the optical space, both having been involved with Xtera and ONI systems. [Harry: This is not a lot of money that is being raised from the VC's. Survival of the company would be a real concern for the carriers. A total passive system also does not strike me as technically feasible, at least not with switching at the speed of light. Interesting comment on MONI...]