Lambda Optical intros metro, regional MEMS

With a new round of funding, emerging equipment vendor Lambda Optical Systems is introducing a set of products aimed at bringing the benefits of all-optical switching to regional and metropolitan networks.

Venture capital firms ComVentures and Sevin Rosen Funds contributed to the $14-million series-B funding round Lambda Optical announced today, adding to the $10-million first round they invested when the startup was founded a year ago.

Lambda Optical uses microelectrical mechanical systems (MEMS), an array of tiny tilted mirrors, to switch optical signals without converting them to electrical ones. But unlike other all-optical switch vendors such as Corvis and Siemens, Lambda’s gear is focused on regional and metro, not long-haul, networks.

The company also sells a reconfigurable optical add/drop multiplexer, or ROADM, and a remote-access device.

"We plan our products to go to market on a stand-alone basis," said Lambda’s chairman and co-founder John Taylor. "But because the software suite is so powerful, there are compelling reasons why one would want to buy the family as is."

With the all-optical plans of many major equipment vendors put on hold due to the popping of the telecom bubble, Taylor sees Calient Networks as his only true competition. But whereas Calient sells crossconnects, he said, Lambda offers an optical switch with integrated dense wavelength-division multiplexing transport functionality.

"We’re the cheapest way to put a 10-Gb/s overlay onto the network and still grandfather the old stuff," Taylor said.

Lambda Optical was borne from the intellectual property of all-optical switch vendor Firstwave Secure Intelligent Optical Networks, a one-product startup founded in 2000 that fell apart in early 2003.

Firstwave’s CEO, John Taylor, and another officer, ex-Lucent exec Gerald Butters, resigned in October 2002 over disagreements with the company’s sole owner, venture capital firm Raza Foundries (now called Foundries Holdings) regarding "the direction the company was in" and "funding and things of that nature," Taylor said.

In March 2003, Taylor and Butters, along with venture capitalists Sevin Rosen Funds and ComVentures, bought Firstwave’s intellectual property, giving Raza only a "small minority" equity stake in Lambda Optical in exchange.

"They’ve got no board seat and no management control," Taylor said of Raza.

Unlike Firstwave, which was focused exclusively on North America, Lambda has a sales person in Japan to target Asia, one in the United Kingdom to target Europe and the Middle East, and one in the United States. But Lambda’s headcount is smaller, with a staff of about 65 rather than Firstwave’s 110.

One important thing the companies do have in common is a nearly $30-million, five-year contract (it will be two years old this summer) with the U.S. government’s Naval Research Laboratory (NRL) that was won by Firstwave and later transferred to Lambda. (Two of Firstwave’s founders were former NRL engineers.)

Sevin Rosen Funds partner Amra Tareen is currently serving as Lambda’s acting CEO, and Taylor said he doesn’t foresee taking the mantle himself.