Redback Networks, a young star back in the days when consumers looked like a gold mine for broadband network builders, is now banking on a comeback with equipment designed mostly for business services.
About a year and a half after it began a foray into metropolitan-area optical networks -- a move the company acknowledges has had limited success -- Redback is enhancing its existing products and rolling out a device it hopes will hit the sweet spot in that market: a small, resilient edge router that can terminate a lot of low-speed connections.
The company's new CEO, Kevin DeNuccio, hopes to guide Redback into a brighter future with the new router and upgrades to its existing products. The former Cisco Systems executive joined the company in the wake of lay-offs and several departures of top executives. The financial woes of startups offering DSL broadband access hit Redback hard, DeNuccio said. A broader lineup will help it recover.
"Any time you're a leader, you get hurt," DeNuccio said. "We're turning the corner because our product portfolio is changing dramatically."
Redback, launched in 1996 in San Jose by former Cisco employees, was an early mover in the market for DSL equipment. Its first product line, called Subscriber Management System (SMS), could aggregate customers' broadband and leased-line connections and also let service providers quickly and easily configure those services. Most service providers had been doing this by reconfiguring Cisco routers, which offered less flexibility and a slower turnaround time, analysts say.
The SMS was snapped up by most of the regional Bell operating companies offering broadband in the US and by many other carriers worldwide, and it inaugurated a new product category, according to Jennifer Liscom, a Gartner analyst.
But in the fast-changing world of networking, one revolution can't sustain a vendor for long. Redback soon saw broadband deployment tail off across the US as funding for many startup carriers dried up.
In late 1999, the company looked to another market that was expected to boom: metropolitan-area optical networks. While both the WANs between major cities and the infrastructures for bringing high-speed Internet access to homes and businesses were being expanded rapidly in the late 1990s, the metropolitan networks that connected the two ends in many cases were left behind.
In November 1999, Redback reached an agreement to buy Siara Systems, one of several companies developing optical transport platforms that would help RBOCs and their competitors break bandwidth constraints around urban areas. The Siara product became Redback's SmartEdge 800 transport platform.
Meanwhile, Redback still derived 80 per cent of its revenue from the SMS line, which was rapidly being outclassed by newer, service-rich routers and IP service switches, according to Kevin Mitchell, an analyst at Infonetics Research.
That's why Redback recently unveiled what it expects to be another breakthrough product, the SmartEdge 800 Router. It is designed as an alternative to the WAN core routers most metropolitan network providers have deployed at the edges of their networks, said Bruce Van Nice, director of technical marketing at Redback.
The SmartEdge Router lets carriers deploy more interfaces for the Internet speeds businesses want, especially 1.5Mbps connections, Van Nice said. Another use of the router will be for large carriers to sell capacity on metropolitan networks at wholesale to smaller providers.
Genuity, which sells DSL services to corporations and service providers, is considering deployment of the SmartEdge transport and routing boxes to support a variety of services. On Genuity's European and trans-Atlantic networks, the Redback products would let the carrier deploy circuit-based and packet-based services on the same platform, said Steve Blumenthal, chief technology officer at the Massachusetts carrier.
Genuity also uses SMS for subscriber management and some tunnelling services. The carrier provides firewall services through hardware at the customer premises. Because the SMS doesn't have that feature now, Genuity may turn to another vendor for it.
However, Redback is not standing still in any department. In addition to rolling out the new router, Redback recently upgraded the SmartEdge 800 transport device with Gigabit Ethernet and support for Synchronous Digital Hierarchy, the international version of the SONET standard used in many US metropolitan networks. In mid-2002, the company says it will boost the performance of the SMS platform to support additional services.
With the introduction of the SmartEdge Router, Redback has a broader range of products and relationships with most of the major carriers, ingredients it hopes will help turn the company around.