Optical vendor Calient Networks takes another swing at metro, access

With a new chief executive officer and new funding, Calient Networks isn’t adopting a new strategy—it’s just promising a more aggressive pursuit of its previous plans.

After five months on the job, CEO Daniel Scharre said the optical switch vendor is going to work harder on the strategy it adopted in 2004, one focused on metro and access networks.

“There’s going to be no quantum leap in product that you’ll see over the next year,” he said, adding that its current gear may be merely resized and hardened for outside use.

You could say Calient’s story has reached its all-important third act. The company was born in the telecom bubble amid a slew of ill-fated equipment vendors focused on all-optical core networking. Start-ups such as Corvis and X-Ros promised to reduce the costly electronic conversions in optical networks. Calient did it using microelectrical mechanical systems (MEMS)—tiny tilting mirrors that switched the light in its native form.

After the telecom bubble burst, Calient tried a new approach. Collecting $35 million in fresh funding in early 2004, the vendor redesigned its gear, applying a less expensive version of its MEMS core technology to access and metro networks and announcing its new downstream focus in October 2006. A few months later, its longtime CEO Charles Corbalis departed without a permanent successor in place, and the company’s headcount shrank to small double digits.

Late last year, the company named Daniel Scharre its new CEO (the former CEO of Larscom and Adaptive Broadband) and took in $10 million in new funding. And after five months on the job, Scharre said Calient will push harder into metro and access markets, hoping to take advantage of ubiquitous increases in network traffic.

“There was a period of hunkering down from the end of 2006 to the fall of 2007,” he said, declining to say whether Calient grew revenue last year. “The company went through a period where it was focusing on niche things like lab automation and government customer work that were relatively price-insensitive markets but also very time-consuming to break into from a sales point of view. Now we need to move into the big markets.”

The lack of a CEO for several months didn’t help, he said. “People tend to drift toward their zones of comfort,” he said. “The piece that’s missing would be: Let’s be aggressive and move out there now.”

In metro environments, Calient’s optical switches are now aimed at performing remote provisioning to replace the practice of making manual changes to patch panels in central offices and data centers, Sharre said. “Look at [Calient’s gear] more as an auto connectivity solution rather than a switch.”

The gear could also be applied to fiber-to-the-premises networks, detecting faults and reprovisioning signals quickly and remotely to redundant fiber.

For this phase of Calient’s life, one aimed at fiercer execution of its existing business rather than engineering innovation, Scharre, who holds a Ph.D. in physics, believes he’s well-suited to lead the company.

“I’m not really good at coming up with new ideas,” he said. “There are no new ideas. I’m good at identifying ideas that seem good that someone else came up with and moving aggressively to execute on them.”

Calient’s previous focus on lab automation has given it a foot in the door at the largest carriers; Scharre claims Calient’s gear is in AT&T and Verizon’s labs. But the CEO is also looking for a big-vendor partner to help land top-tier accounts.

Scharre understands that major telcos are notoriously squeamish about buying from small vendors with shaky finances. In its early bubble days, Calient amassed well over a quarter billion in funding. When asked how much of that remains, Scharre said, “Would we have raised $10 million if we had $100 million sitting in the bank?”