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 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

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

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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