Occam outgrows Tellabs partnership

Occam Networks’ three-year partnership with Tellabs expires this month, without having generated much revenue. And Occam says it no longer necessarily needs a “big brother” to land the large carrier customers that it once hoped Tellabs would bring.

Occam originally struck a reseller agreement with Tellabs in order to leverage the latter’s rapport with large independent carriers and Bell companies. (In fact, the discussions which led to that agreement began between Occam and Advanced Fibre Communications, which Tellabs acquired in late 2004.) But for the ensuing three years, Tellabs’ access business was focused almost entirely on keeping up with the demands of Verizon Communications’ fiber-to-the-premises rollout, leaving less time for independent carriers. Thus, the partnership never yielded any “material” revenue, Occam said. And large ILECs never moved beyond the trial stage.

Meanwhile, Occam has grown in size and now believes it can serve large ILECs by itself. The vendor’s headcount has doubled since it first penned the Tellabs deal (it now employs 174). And in January it won a major deal with Fairpoint Communications, supplying an upgrade to networks in three states being purchased from Verizon, including 200 central offices and 50,000 DSL lines. Fairpoint was already a large Occam customer, but the Verizon deal will make it the country’s eighth largest telco.

“The Fairpoint win was proof that we’ve been able to get into some accounts with 1-million-plus lines,” said Russ Sharer, Occam’s vice president of marketing. “Now we’re at a size that we can work well with them.”

The Fairpoint deal wasn’t made completely solo. Occam proposed a joint solution with Cisco Systems, combining its own IP access gear with Cisco’s IP products in the core. And the two vendors have no formal partnership, though they might team up on a case-by-case basis, given Cisco’s thin broadband access portfolio and the technology alignment between the two vendors.

Occam won’t rule out future reseller partnerships with big vendors, Sharer said, though he added, “It’s hard to do resale in the access business because of the margin structure.”