“When the slowdown occurred we were exposed like the tallest rock on the beach when the tide goes out.”
UPDATE: 18-11-2011:
Aviat has asked us to clarify that Aviat will continue to invest in the Eclipse portfolio in parallel with the all-IP products. We’re happy to do that.
Aviat Networks’ Chuck Kissner, who combines the CEO and Chairman roles after previous CEO Harald Braun was shown the door in July 2010, has said that the company is back on track after refocusing its product line and its future development plans.
Delivering a quietly damning assessment of the company’s delivery since the Harris-Stratex merger, Kissner told Mobile Europe that the company is now focusing solely on its Eclipse wireless transmission product line, and is abandoning its previous “End-to-End” messaging which he thought many found confusing.
“I saw [Braun] present that message when we opened on Nasdaq,” Kissner said. “I was in a position to watch the reaction of those at the presentation, and I thought that many there found it confusing.”
The re-focus has led to considerable consolidation within the company, with divisions being relocated from North Carolina to California and headcount reduced substantially. But Kissner said such actions were necessary to bring down the cost of supporting a product line that had grown too large, and was impacting on margins.
“If you go right back to the merger [of Harris and Stratex Networks] in 2007, we had laid out a set plan for the integration. In Year One we would see the replacement of products and system support, and so on. That didn’t happen and it brought with it a level of concern that there was too high a level of duplication in the business. Our costs were high because we were supporting a number of lines of product requirements, and Eclipse did not get the attention it should have – there wasn’t the sense of urgency there could have been to get that sorted out.
“When the global economic slowdown occurred we were exposed like the tallest rock on the beach when the tide goes out. And so the decision was made that a change of leadership was required.”
It’s not all bad news, though, Kissner pointed out. “We have probably shifted more IP radios than anyone,” he said, “and we are the number one independent supplier and number four or five overall in the market. We have deployments in 260 customers and our customers really like us. Our ongoing sales means we have easily enough horsepower to cover our ongoing development into the current and the next platform.”
Aviat’s research and development activites will be placed into an all-IP product platform, rather than the hybrid Eclipse product. These will be able to offer optimised and “significantly more” IP networking and intelligence, Kissner said, as they do not have to compromise on the “TDM overhead”.
“We can keep adding to Eclipse,” Kissner said, “but it’s not a long term strategy.”
More important than just high producing high capacity radios – the “Dragonwave broad pipe approach” in Kissner’s words – is the ability to add network intelligence and IP networking functionalities such as enhanced QoS management, Kissner added.
“Microwave is a unique transport mechanism, and the algorithms for QoS and routing in the network may not work for Microwave, that’s why there is a play for intelligence in the Microwave system.”
Kissner said that he sees Microwave transmission growing as operators move to all IP networks, and contend with increasing volumes of traffic, as well as the need to apply intelligent routing and rules to traffic. The availability of spectrum such as E-Band and perhaps WiMax spectrum also means that Microwave backhaul could be brought closer to the customer, truly the last mile rather then the “middle mile” of current backhaul. This would also open up opportunities for wireless transmission.
As for the wider role for Microwave in backhaul, he said that one major European operator that currently has just 10% of its backhaul over microwave has indicated that will shortly rise to 15-20%. And Aviat also has a French customer that is rolling out a “highly advanced” all IP Ethernet infrastructure, using technology from Aviat that has not yet been publicly announced, Kissner claimed.