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Mukesh Chatter, CEO, Axiowave Networks

Mukesh Chatter Mukesh Chatter founded Axiowave Networks four years ago with a goal of building optical cross connects, equipment that directs data streams between network components. But the telecom market crashed, so he had to switch gears.

After talking with telecom executives on the technical side and in financial departments, he discovered a problem that needed solving: the unforeseen costs of running IP traffic.

So Chatter, who had sold his previous startup, Nexabit, to Lucent for $900 million, set out to develop a core/metro router. The Axiowave product, the XCR 128, was introduced this month about the time when Cisco unveiled its Huge Fast Router.

Chatter recently talked with internetnews.com about the challenges facing service providers, how Axiowave's product addresses them, and how a small company in Marlborough, Mass., plans to take on network equipment heavyweights.

Q: What is your background?

I'm a hardware engineer by trade. I've worked with a lot of different architectures, including networking, supercomputing and some wireless. I started Nexabit in 1997, which Lucent acquired in 1999. I left Lucent in the middle of 2000, then we started Axiowave.

Q: Do you prefer working at startups over sector giants?

Smaller companies are definitely more fun, but I must admit I learned a lot at Lucent, too. There's a scale of economy at larger companies that helps them. My style is better suited to a smaller company. It's more go-go, and quicker in terms of making decisions.

Q: What was Axiowave's original mission?

We were going to build very large optical cross connects built on MEMS technology. But as time went by, it became very, very clear that the market wasn't going to provide support for that. We decided to pull the plug on the technology side in early 2002 and get out of that market completely.

Q: After abandoning the first idea, how did you settle on the core/metro router space? After all, no telecom equipment area looked very promising then, and that one wasn't exactly a greenfield.

Those were the darkest days of telecom. We went out and talked with a lot of carriers, and it was very clear that not a lot of people were making money. [Capital expenses] were high, operating expenses were high and IP networks were always pointed out as a drain on the resources.

One of the reasons was that the average sustained utilization was kept at 30 percent or less, so they didn't violate [service-level agreements]. Another reason was that the ability to carry premium price services was extremely small for IP routers unlike ATM Frame Relay. So you have a dilemma here where utilization on IP is not even half of what ATM/Frame provides, and more often a third, and premium traffic is not even one-sixth. The business model did not translate. There was no service differentiation; the only competition was in price and support.

Q: How does the Axiowave XCR 128 product remedy this?

It's purpose-built to address these problems. It increases utilization from 30 percent to 90 percent-plus; all 90 percent can be premium traffic. It took a lot of innovation to make that happen. We had to come up with a real interesting architecture and hardware.... We effectively enable service providers to migrate onto IP while supporting exactly the same or better SLAs as ATM or Frame Relay.

Q: At the same time you unveiled the product, you also announced the first customer, PowerNet Global Communications. There have also been reports that you're testing at a large carrier. Can you comment on that?

Our policy is not to talk about it. We are getting tested at other places and after (the product launch) announcement we're getting good traction.

Q: Why should a service provider choose Axiowave Networks over existing router makers?

It comes down to IP economics. The bottom line is that existing routers are only supporting the status quo -- no one is making money.

Q: Finally, what are your thoughts about the current state of the telecom industry?

It's definitely better than it was before. The money, where it's being spent has shifted, for example, optical money is being shifted. (The budgets) are smaller than what they used to be, but at least carriers are buying and the number of smaller players has increased. There's been a resurgence of ... VoIP players coming up. It's more vibrant than 2002.



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