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Equity Notes: Lucent still luminous in
startups’ eyes |
| 01/27/2003 08:35 AM |
| By |
Despite its woes (all $11.8 billion of
them — its losses for 2002), Lucent Technologies hasn’t lost its
luster among startups.
Both Continuum Photonics and Taqua
Systems, for example, have recently named ex-Lucent bigwigs to their
boards of directors.
Continuum, an optical switching
subsystems maker in Billerica, has added retired Lucent chief
operating officer Daniel Stanzione to its board.
For
Continuum, Stanzione’s appointment is all about access.
“With
Lucent in particular, they’re a bit down along with other telecom
systems companies,” said Continuum chief executive Jeff Farmer. “But
they’re working on a couple of new programs that are of interest to
carriers, including Verizon. So (Lucent) is still an important
customer to us.”
Farmer’s being generous in saying that
Lucent is just “a bit down.” But Lucent is nevertheless a force to
be reckoned with. Even in the midst of the worst telecom economy in
memory, Lucent sold $9.6 billion in product and another $2.7 billion
in associated services. That’s a lot of product, and to make that
product, Lucent needs a lot of subsystems.
Farmer isn’t
interested just in the influence Stanzione might have at Lucent —
he’s also hoping Stanzione will give Continuum added credibility
with big carriers. Continuum intends to sell its optical subsystems
to equipment manufacturers, but unless the carriers want the type of
gear that requires Continuum’s components, Continuum won’t have a
market to sell to.
“(Stanzione) will help us get to know
carriers a little better and potentially influence their purchasing
decisions,” Farmer said.
Continuum expects to ship its first
prototypes to prospective customers in April.
For switch
maker Taqua Systems, the arrival of former Lucent CEO Richard McGinn
to its board came as part of a $20 million package.
McGinn is
a partner at RRE Ventures, the venture capital firm that led Taqua’s
latest funding round.
To date, Taqua has raised $140
million.
McGinn took the reigns at Lucent in 1997, and led
the company through an unprecedented acquisition tear until October
2000, when the Lucent board of directors ousted him following a
series of sharp declines in Lucent’s profits and share price.
So McGinn isn’t exactly a noncontroversial figure in the
telecom world. Nevertheless, Taqua chief executive Charlie Vogt
sought out RRE Ventures in the hope that McGinn would join the Taqua
board.
Vogt, who had served as a senior vice president at
Ascend Communications, got to know McGinn after Lucent’s $23.7
billion acquisition of Ascend in 1999.
“In my opinion, he’s
been rubbed with the wrong salt regarding Lucent,” Vogt said. “He
did a tremendous job with Bell Labs, AT&T and spinning Agere out
of Lucent.”
Taqua, which is based in Richardson, Texas, but
has a sizable research and development facility in Hyannis,
struggled early on with its compact class-five switch.
But
over the last 18 months, the company has found its niche selling to
rural local exchange carriers. To date, the company has won 43
customers. Last year, Taqua brought in $10 million in sales. Vogt
expects that figure to double for 2002.
McGinn’s arrival is
part of Vogt’s plan to use Taqua’s experience in the rural market to
penetrate the former Baby Bells.
“You’re not going to sell to
the large carriers without some time deploying equipment somewhere
else,” Vogt said. “I don’t see the Verizons or the SBCs of the world
buying equipment any more from companies that aren’t profitable and
don’t have a lot of switches in place.”
Jeff Miller
reports on telecommunications, finance and venture capital. He can
be reached at jmiller@masshightech.com. |
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