Calix comes out of hiding, sees no shadow

Optical access equipment maker Calix finally emerged from a three-year stretch in stealth mode with new funding, a new CEO and a growing list of carrier customers.

The company, which was founded in 1999, is touting its simplified service delivery platform, which seeks to consolidate functionality in access networks and open up bandwidth bottlenecks at customer-facing remote terminals.

The company’s solution is the C7, a 14-inch-high system that sits in service delivery points of presence such as central offices and remote terminals. To accommodate carriers’ timid spending habits of late, the system can be deployed a box at a time. But it’s also highly scalable, according to the company; a seven-foot rack can hold five systems, which together could provide as many as 100 OC-48 connections.

“We have more bandwidth than anybody out there,” said Mike Hatfield, founder and chief strategy officer, who was replaced as CEO by Carl Russo.

Calix’s coming out also marks the return of Russo, who left the telecom industry last May when he resigned his post as vice president of Cisco Systems’ optical networking group. Russo came to Cisco when the router giant acquired his startup, Cerent, in 1999.

Calix also recently drew another $50 million in funding from new and previous investors, bringing the firm’s total funding to date to $260 million.

The most typical response Calix has gotten from potential customers, it said, is genuine interest in their architecture mixed with unshakable skepticism that Calix can actually do what it claims. Some skeptics have derided the C7 as a “God box,” the industry’s pejorative term for a device that tries to do everything. Russo counters this suspicion by distinguishing a God box, which he defines as “inappropriate integration,” from Calix’s system, which integrates functions at the network’s edge, where it belongs.

“The closer you get to the customer, the more integration actually works,” said Russo.

Calix also has the luxury of being able to direct skeptics to its list of more than 50 customers, the bulk of which are small independent operating carriers such as Randolph Telephone Member Corp., but the largest of which includes SureWest Communications, CenturyTel and Alltel.

Calix has yet to secure an RBOC customer, but it has received Osmine certification, a requirement of RBOC networks.

The vendor claims to have shipped more than 500 systems to more than 50 customers since April 2002, a level of penetration that Russo said prompted the company to finally exit stealth mode.

“We wanted to unveil a company, not a startup,” he said. “With this penetration in the marketplace, we feel comfortable that we have a company.”