Jeffrey Kagan - Silkroad, The Potential To Change An Industry?
cnnfn.com
April 09, 1999: 5:03 p.m. ET
MARIETTA, GEORGIA, U.S.A. (NB) -- By Jeffrey
Kagan, Newsbytes Columnist. COMMENTARY. Start
up technology companies with breakthrough ideas that
can change the world, or at least their corner of it, seem
to be a dime a dozen these days ... if you believe their
press releases anyway. Most however, are only "really"
exciting to the entrepreneur, inventors and investors
behind them. But once in a while, one comes along that
really can make a big impact on an industry. One that
challenges the prevailing thinking and discovers an
entirely new way of doing something that is light years
ahead of the present state of the art. Finding those few,
really special company can be quite a challenge.
Silkroad just might be one of those companies. As the
nation's fiber optic networks try to meet the growing
data demands, they are faced with a challenge of
increasing capacity on their networks. They could install
more fiber, but that's cumbersome and expensive. It's
far more efficient to squeeze more bandwidth out of
their existing installed base of fiber.
In recent years, DWDM (Dense Wave Division
Multiplexing) looked like the best silver bullet to do just
that. Industry leaders like Lucent and upstarts like Ciena
have tapped into this huge opportunity with DWDM
offerings that get better all the time. As players in
today's market compete on Internet time, these new
offerings by any other reasonable standard have
become the de facto status quo that newcomers must
challenge.
So when a little pipsqueak of a company by the name
of Silkroad claims to have a better way to squeeze more
bandwidth out of fiber networks at less cost and with a
host of other benefits, I obviously took it with a grain of
salt. After all, who in the world is Silkroad? But the
closer I looked, the more real, and immense the
opportunity they represent became.
As an industry pundit with an opinion on everything
and not without a bit of influence, I get dozens of
requests every week from companies who want to get
on my radar. They offer to fly me in to schmooze with
their CEO and brief me on their company and how their
discovery will change an industry and leave a line of
customers beating a path to their door.
While I only have the time and opportunity to meet
with a few, most are just a warmed over version of
something else that's already out there. A new twist on
an old problem. Sure it's exciting for the folks who
thought it up and market it since they have an
opportunity to serve a niche and make a killing, but the
earth doesn't move for the rest of us.
These entrepreneurs and business people do
whatever they can to get noticed and rise above the
noise of a crowded and frenzied marketplace. They can
be so excited, and the excitement can be contagious.
After all, when you are sitting face to face with the
folks who have bet the farm on this roll of the dice you
just can't help get caught up in the urgency and
excitement of the make-it-or-break-it electricity in the
air.
But then there's the plane ride home, the good night's
sleep and the phone log full of calls to return the next
day. Before you know it the euphoria fades and all you
have left is a company which may have built a better
mousetrap, and indeed be worth watching, but still
doesn't have that spark that can change an industry.
While "they" need to think that way, I don't. But then,
once in a while, there are companies like Silkroad.
Companies whose ideas are bigger than even they
realize. Ideas, that if they work the way they claim, and
if they can execute, have the potential - yes the potential
- to change the economics of an industry.
I got the call last fall. They were preparing to launch
and wanted a little positioning feedback from someone
who talks with reporters, analysts, competitors and
customers. I do this all the time so I agreed and flew
into San Diego with the same attitude as a hundred
other trips. I was expecting to see a bunch of excited
execs who thought they had the biggest idea since Al
Gore claimed he invented the Internet. And that's
exactly what I got. I had my skeptics hat on and did my
best to ask questions and confuse them. That's what I
get paid to do. But frankly, I was left with the realization
that, even though I was not a photonics expert, if this did
what they said it could do, reliably and on a carrier class
scale, they could change the economics of operating
fiber networks. And as William Shatner says, that could
be big - really big.
But I am NOT a photonics expert and kept my
skepticism alive and well. Then they brought in a
number of other industry and technology analysts for a
private pre-briefing weeks before the launch. To a
person, they all came away with the same take as I did.
Then Silkroad had their official launch a few months
ago in November, on Wall Street in New York City.
Now I've been to dozens of these kinds of events. Some
are flashier than others, but this one was nothing short
of a Bill Gates / George Lucas dream sequence. There
was a wall of hundreds of color TV sets creating an
incredible backdrop for an event that took the breath out
of a bunch of industry curmudgeons.
Everybody who's anybody was there. There were
hundreds of analysts, technology gurus and reporters. It
was a who's who of technology and communications.
All gathered to watch the spectacle which was nothing
short of Charleton Heston splitting the Red Sea in the
Ten Commandments. Yet it was so simple. After the
dust settled and the demonstration was over, they were
swarmed with people and questions from the dazed and
skeptical.
The new technology called SRSC (Silkroad
Refractive Synchronization Communication) has been
labeled by photonics and technology experts as "so
simple as to be marvelous," one of those ideas that
seems too simple and elegant to have gone
undiscovered until now. Silkroad has been involved with
discussions with many carriers and the excitement
seems to be building.
The take away from everyone I spoke with since is
the same as mine. They remain skeptical until they see
it operate under the pressures of real marketplace
conditions. They are waiting to hear from a few service
providers who have successfully used the breakthrough
technology in their networks. But if it will do what they
say it will do, this could be big - really big.
Jeffrey Kagan is an Atlanta-based telecom industry
analyst, commentator, and self-described provocateur.
He is a frequent speaker at industry conferences and
author of "Winning Communications Strategies" (Aegis
Publishing). He can be reached at jeff@jeffkagan.com
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