WaveSmith confirms SBC deal

As expected, SBC has awarded WaveSmith Networks a multiyear, multimillion-dollar contract to supply the regional Bell operating company with multiservice edge switches for DSL aggregation.

WaveSmith's DN 7100 switches will be deployed in 200 SBC central offices (CO) and points of presence. Each CO and POP will have more than one DN 7100, which means the value of the contract is between $50 million and $100 million over three years.

SBC is the largest DSL provider in the U.S. with 2.2 million subscribers. The carrier has experienced four consecutive quarters of DSL subscriber growth, and another 24 million customers across 13 states are potential subscribers.

The win is a coup for start-up WaveSmith. More start-ups are failing than succeeding during the now three-year telecom slump as spending among service providers decreases, alternative carrier customers go out of business, and incumbent carriers generally shun the risk of dealing with unknown, untested and financially-challenged young companies.

In an effort to attract attention from incumbents, start-ups are aligning with established vendors that carriers are familiar with and already have relationships with. WaveSmith, for example, has $5 million in funding from, and a distribution and service and support pact, with Ciena.

The SBC deal, however, was a direct negotiation between WaveSmith and the carrier, a WaveSmith spokesman says. SBC, however, was encouraged and convinced to engage WaveSmith due to its Ciena backing, he says.

SBC did not comment by press time.

At the multiservice edge, WaveSmith supplants SBC incumbent ATM/frame relay switch vendor Lucent, analysts say. WaveSmith says it was selected because of price/performance, ease of provisioning, footprint and virtual circuit density advantages.

Lucent's multiservice switches, obtained from its acquisition of Ascend Communications in 1999, are at least five years old. Lucent has been slow to refresh the line due to its sagging financial fortunes, which have canceled projects aimed at developing next generation multiservice switches and cost tens of thousands of employees their jobs.

Lucent downplayed the significance of WaveSmith's win.

"This is a niche play for the rural, low-density aggregation points," a Lucent spokesman says. "Lucent remains the incumbent multiservice switching vendor with SBC, and we continue to have significant multiservice switching business with SBC.

"Lucent also continues to develop new features and capabilities for the CBX 500 and GX 550 multiservice WAN switches, including adding standards-based MPLS features.  SBC is actively engaged with Lucent on driving added features and functionality on these product lines," said the spokesman.

Those added features and functions are apparently not coming fast enough.

"SBC needed a new platform and they didn't want to go with incumbent Lucent," says Kevin Mitchell, from Infonetics Research. "It shows to the incumbents that they have to prove themselves, even against a start-up."

As for WaveSmith, "this is a serious commercial deployment tied to revenue," Mitchell says. "WaveSmith had some smaller customers but this makes them acceptable to any carrier."

The DN 7100 is a 7 rack-unit, 30G bit/sec switch that can support up to 750,000 VCs per switch. It features six slots for forwarding modules and eight full or 16 half slots for port adapters, which range from T-1 ATM and frame relay, to OC-48c ATM and packet-over-SONET.

The DN 7100 can also support TDM/circuit emulation and Multi-protocol Label Switching services.

WaveSmith was founded in March 2000 and has raised over $84 million in financing. In addition to Ciena, investors include Argonaut Private Equity, Atlas Venture, Bessemer Venture Partners, and Fidelity Ventures, among others.

This story, "WaveSmith confirms SBC deal" was originally published by The Edge.

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