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In The News

by: Managing Editor Tony Quested

10 QUESTIONS WITH POLATIS CEO JERRY WESEL

Polatis is the world leader in optical switching technology innovations. Founded in 2005 as the merger of leading optical technology companies from Cambridge Massachusetts and Cambridge UK, Polatis combined products, technologies and resources to create new solutions for modern fibre-based networks.


1. What are the origins of the business?

The current business structure is the result of a merger in 2005 between Polatis Ltd based on the Cambridge Science Park, and Continuum Photonics, Inc., a spin out of Massachusetts Institute of Technology (MIT) in Cambridge, MA. Prior to the merger, both companies had been developing piezo based all-optical switching technologies since 2000. The merger made perfect sense since as the two companies were at similar stages in their business cycles, but still quite small. Merged, the two companies leveraged their technology and expertise, streamlined costs, and increased aggregate revenues.

2. What have been your biggest challenges to date?

Initially, product development was our biggest challenge in going from a lab concept to a finished production product. After the initial products were developed in 2003, the focus was on transitioning from engineering to ramping manufacturing. Since then, we have shipped over 1,000 switches worldwide into some of the most demanding customer applications. All optical switching is now being deployed in many new applications including video, data centres and telecom.

3. What do you think sets Polatis apart from your competitors?

Polatis delivers the lowest loss, highest performance all-optical switching solutions available in the world today. These are used in a broad range of applications including remote fibre-layer provisioning, protection, monitoring, reconfiguration and test applications. Polatisí field-proven piezoelectric switch technology scales currently from 4x4 to 96x96 ports.

4. Has Polatis managed to achieve the targets and milestone objectives it outlined in its initial business plan?

Polatis has gained significant traction in the Government & Defence and Test & Measurement markets worldwide. This was the companyís original business plan and we have executed well against those plans. Calendar year 2009 was a tough year for most companies and Polatis was no expectation. However, since then, the company has grown. Our current business plan includes growth in the emerging markets of telecommunications, data centre and video markets.I expect us to achieve significant growth in revenue, year over year.

5. Has the nature of your technology/product changed since the original concept was created?

Polatis continually innovates to meet changing customer needs. The underlying Polatis piezo beam-steering technology switching concept has not fundamentally changed over time but has been adapted to larger switch sizes and new products. Polatis consistently works with customers and suppliers to update design, manufacturing and testing processes to increase performance and lower costs.

6. What is the scale of the global market opportunity for Polatis in terms of territories and market sectors?

The market for Polatis switches is increasing both from a geographic region as well as vertical market prospective. All optical switches in smaller form factors with less power consumption, to support significantly faster data rates in networks with increased service level agreements, is driving the increased demand. Our current analysis shows the total available market is growing to in excess of $250m in the next two to three years from a recent relatively small base.

7. You have just raised $2.7m from existing investors. Are you likely to need more cash to grow the business?

The recent funding round underpins and supports our business plan. Clearly if new opportunities presented themselves for which further funding was required, we would consider that at the time and base our decision on reasonable ROI considerations. We have a strong investor group including Alta Berkeley, DFJ Esprit, and Encore Ventures based in London and Flagship Ventures and JK&B Capital based in the U.S.

8. Some of the new cash is for product development. Will this mean new products or upgrades of the existing technology?

The recent funding will be used to develop new larger port count switches that open up new market opportunities for Polatis. The new product development will also benefit existing products by allowing us to further automate manufacturing processes and utilise faster, more cost effective and physically smaller components.

9. Is it your intention to remain a private company or is there an exit strategy?

We are focused exclusively on the execution of the business plan and increasing shareholder value. With that said, successful execution based on leading edge technology solutions, brings strategic opportunities which the board of directors evaluates from time to time. Building on what we already have will naturally take us to exit and a positive return for investors and employees. It is this building process that we are focused on.

10. Are there any business issues that keep you awake at night?

I believe that we have a solid foundation for success. However, some of the new markets take longer to develop. We need to constantly balance the short term objectives with our longer term strategy. I donít worry about whether we can be successful in these new markets. It is more about how quickly we can gain more traction with increased revenues.