On Monday the hotshot founders of Cascade Communications unveiled their new networking startup, Sycamore Networks, which aims to manufacture software that'll improve efficiency of fiber-optic telecommunications networks.
Sycamore Networks executives were sketchy in detailing their company's products. They will work on the problem of converting optical signals to electrical impulses and back again, a process that slows the flow of data through networks.
Their products are designed to let telecom companies directly connect frame relay and asynchronous-transfer-mode data traffic to the optical network.
Carriers are in a race to provide cheaper bandwidth and new services to customers, said Gururaj "Desh" Deshpande, Sycamore’s founder and chairman. Sycamore’s clients will be "anybody who owns fiber," he said. "This is a brand new market just beginning to happen."
The market for Sycamore's products is about US$8 billion to $10 billion, said Deshpende. For every dollar spent on fiber, $20 to $30 is spent on lighting the electronics to get bandwidth, he said. "This technology will minimize that cost to more like $5 or $10."
Deshpande and Dan Smith, Sycamore's CEO and co-founder, were the former chairman and CEO, respectively, of networking company Cascade Communications. That company made high-end ATM networking devices for telecom carriers. It was bought by Ascend Communications (ASND) in July 1997, and the two took off.
Sycamore, which currently employs 50 people, will introduce products in the first half of 1999. The company also said it has raised $12 million in a second round of funding, bringing the total to $20 million. Venture capital partners include Matrix Partners and North Bridge Venture Partners.
The other two founders of the Tewksbury, Massachusetts, company are Richard Barry and Eric Swanson, two of the architects of the All-Optical Network, or AON, developed at the Massachusetts Institute of Technology.
