Packet optical gear startup Cyan emerges with 20 customers

A new equipment vendor has emerged from a three-year stealth mode to tackle the crowded packet optical networking space. Though it’s competing with the likes of Cisco Systems (NASDAQ:CSCO), Alcatel-Lucent (NYSE:ALU), Fujitsu, Tellabs (NASDAQ:TLAB) and others, Cyan Optics, which is making its public debut today, already has about 20 customers and an experienced team led by a founder of one of telecom’s greatest success stories.

Cyan is led by Chief Executive Officer Mike Hatfield, who founded both Calix, the access equipment vendor, and Cerent, the optical transport vendor that Cisco acquired for nearly $7 billion in 1999. Though Cyan’s total funding to date is unknown, its early investors include Calix investor Azure Capital Partners and Cerent investor Norwest Venture Partners. And its later investors include Juniper Networks. Its customers include a regional network, a multi-municipal network (likely Utah’s Utopia) and one of the top 25 cable providers.

Cyan is targeting the packet optical networking equipment space, helping carriers converge legacy time-division technologies such as Sonet with packet-based traffic such as Ethernet, using optical networks as the third leg in the stool and allowing carriers to migrate from legacy to packet networks over time. Collapsing those networks is crucial for carriers to be able to keep up with runaway bandwidth demand while keeping costs under control.
Though the space is well-populated with major vendors, Cyan believes it has an edge because its platform is purpose-built for packet optical applications and made from the latest generation of chips rather than based on incremental changes to existing legacy gear. That fresh approach yields design efficiencies that make the gear denser and more scalable than other gear on the market, Cyan said.

For example, Cyan’s two initial hardware products, the Z77 crossconnect and the Z733 add/drop multiplexer, are both capable of handling more than 100 gigabits per slot, a level of density that analysts say will compete well against larger vendors’ gear. Part of how Cyan got that level of density is an “orthogonal mid-plane architecture” in which cards can be inserted into both the front and the back of the chassis, their pins plugging directly into the switch fabric rather than running through traces first.

The Z77 has shipping for more than a year and carrying live traffic in customer networks for the past three quarters, Cyan said.

Cyan’s new approach could indeed allow the startup to take on the market’s giants, said Andrew Schmitt, directing analyst at Infonetics Research. Packet optical platforms typically rack up a lot of cost by converging different traffic types over a single common backplane, he said. “It increases the cost premium of these systems, because they’re overdesigned to handle everything – that’s the God-box penalty. But starting from a clean sheet of paper, you can build a system that can do a lot of these things [more efficiently] than if you had started a few years earlier. Cisco is still building on their old 454 platform. Cyan doesn’t have that constraint.”

Cyan also cites as a differentiator its network management software – with its multi-layered visualization tools that let operators single out particular aspects of the network – say, Ethernet or wholesale services or wireless backhaul – in relation to all the other layers. So operators can stay focused on the part of the network most relevant to them while seeing it in the context of the whole. That’s important because converging networks also involves converging historically separate operational teams.

“It allows [carriers] to work within their existing organizational constructs,” said Frank Wiener, Cyan’s vice president of marketing and business development. “It simplifies planning and troubleshooting and helps determine the best way to do deployment.”

In addition to Sonet, DWDM, OTN optical transport and Ethernet services defined by the Metro Ethernet Forum, Cyan’s platform supports the recently standardized connection-oriented Ethernet technology Provider Backbone Bridging – Traffic Engineering (PBB-TE) and plans to support Multiprotocol Label Switching - Transport Profile (MPLS-TP) when that technology is standardized.

Industry observers, meanwhile, have waited a long time to see the latest move from one of the men behind Calix and Cerent.

“Cyan was founded by a group of folks who have done this before and who believe that if you can’t be disruptive, don’t bother,” Wiener said.