Calix debuts with deployments and cash

Start-up Calix has emerged, saying it shipped more than 500 products to 50 U.S. LECs, received capital totaling $260 million, adhered to stringent market and technical requirements, and appointed high-profile industry veterans to company leadership positions.

That’s quite a list of accomplishments for a four-year-old company, especially in these trying times of limited capital and spending and dying young companies. Calix believes the secret to its current success lies in its Calix C7 services platform, which encompasses the functionality of several disparate network elements in one enclosure for delivery of voice, data and video to business and residential customers.

The 200G bit/sec C7 incorporates the features of next-generation broadband DLCs, DSLAMs, next-generation SONET multiplexers, IP routers, Ethernet and ATM switches, optical access platforms and digital cross-connects, Calix claims.

Each Calix C7 terminates up to 480 copper connections, including POTS, DSL and Ethernet. Integrated POTS splitters allow support for baseband POTS and DSL on the same line.

The system also terminates up to 480 fiber connections, enabling the selective migration of copper-based subscribers to fiber-to-the-home connections.

For business customers, the Calix C7 supports SONET transport and both 10/100M bit/sec Ethernet and Gigabit Ethernet services, in addition to existing DS-1 and DS-3 services. The system also integrates next-generation OC-48 SONET transport, cross-connect and grooming.

The Calix C7 integrates functionality required to aggregate, distribute and deliver broadcast and on-demand video over DSL and fiber access media, including video multicasting and distributed IGMP channel-change processing, the company claims. The system is able to simultaneously cross-connect up to 1,056 STS-1s and 11,700 DS-0s, and switch up to 50G bit/sec of multicast packet traffic, Calix says.

The system adheres to Rural Utilities Service specifications for deployment with rural and independent LECs, and has completed Telcordia’s OSMINE Services certification, which should appeal to RBOCs and incumbent LECs.

Calix’s C7 earns high marks from analysts on metallic and optical density and system capacity, as well as the company’s market penetration and financial backing. But rivals in the DLC market include two giants with deeply rooted installed bases and customer relationships.

“Major DLC rivals such as Alcatel, AFC, Zhone, and Lucent will invoke their market share positions in the overall DLC realm to demonstrate their ability to defend their major carrier customer base — i.e., RBOCs, international carriers — against upstarts such as Calix,” states Ron Westfall of Current Analysis in a recent report. 

Indeed, Calix has yet to penetrate the top-tier carrier production networks, including those of the RBOCs, despite its OSMINE compliance and 50 customer references, Westfall writes.

“This limits Calix’s ability to claim across-the-board market success in areas such as market share leadership within key segments of the broadband access realm and corporate profitability,” Westfall states in his report.

The Calix C7 is currently delivering services to thousands of customers, Calix claims. Customers that have deployed the platform represent an aggregate of over 6 million access lines, the company says.

To complete the transition from developer to supplier, Calix has named Carl Russo as president and CEO, replacing founder and chief strategy officer Michael Hatfield, who will now focus on technology and business development endeavors. Russo was the outspoken group vice president of optical networking at Cisco, having joined Cisco with the router giant’s $6.9 billion acquisition of Cerent in 1999.

Russo was president and CEO of Cerent. He was also an early investor in Calix.

Hatfield was founder and COO at Cerent before founding Calix.

Calix has also named former Cisco Vice President of Finance Michael Ashby as chief financial officer. Ashby had also been CFO at Cerent, Ascend and Pacific Bell prior to his stint at Cisco.

Of the $260 million Calix has raised, $100 million came in the last eight months, and $50 million of that just recently in a Series E round. That round added two new investors — TeleSoft Partners and Kinetic Ventures — to a roster that already includes Azure Capital Partners, Redpoint Ventures, MSD Capital, Integral Capital Partners, and Meritech Capital Partners, in addition to a number of private investors.

Azure, Redpoint, Integral and Meritech also participated in the Series E round.

The Calix board includes Russo, Hatfield, and Cerent cofounder Ajaib Bhadare; Geoff Yang, general partner at Redpoint Ventures; Arjun Gupta, managing partner at TeleSoft Partners; Paul Ferris, general partner at Azure Capital Partners; and Tom Brener, general partner at MSD Capital.