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Publication: BoardWatch.com
Date: 17th June 2003
Title: PacketFront Sings New DSL Tune
Swedish
startup PacketFront AB today announced that it's extended its Ethernet-based
broadband infrastructure portfolio of products to work over copper as
well as fiber (see PacketFront Launches VDSL Products).
In itself, the announcement isn't that amazing. Cisco Systems Inc. (Nasdaq:
CSCO), the market leader, announced much the same thing a couple of weeks
ago. However, it's worth taking a closer look on a couple of counts.
First,
the announcement marks a change of tune for PacketFront. Last October,
CEO Martin Thunman dismissed DSL as not genuine broadband because it couldn't
handle 25 Mbit/s
Now
Michael Engström, PacketFront's VP of business development, says DSL is
genuinely wonderful because it will almost double the company's potential
market.
Engström
estimates the market for Ethernet equipment for fiber-to-the-home applications
will be worth $10 billion in the next three to four years, and that the
equivalent VDSL market will be $8 billion. Whether or not this will be
all Ethernet over VDSL is questionable, seeing as most carriers currently
run ATM rather than Ethernet over DSL infrasstructure.
Then
there's the issue of needing 25 Mbit/s for genuine broadband. Engström
says carriers can deploy VDSL and move to fiber at a later date. The key
element of PacketFront's portfolio of products -- its control and provisioning
software -- will work in both environments without any changes.
Right
now, PacketFront is offering two versions of VDSL, complying with Plan
997 (11 Mbit/s downstream) and Plan 998 (18 Mbit/s downstream) from the
European Telecommunications Standards Institute (ETSI). It plans to offer
a proprietary version of VDSL, supporting 52 Mbit/s downstream and 10
Mbit/s upstream, in the fourth quarter of 2003.
The other reason PacketFront's announcement is worthy of attention is
that the company still appears to be doing a lot with a little. It's raised
a total of $8 million and says that's all the funding it needs; it still
looks to turn cash-flow positive this year, as it said it would last October.
Engström brags that his company has higher sales than World Wide
Packets Inc., a competitor that has raised far more funding than PacketFront.
World Wide Packets has raised a total of $89 million, according to Barry
Kantner, its VP of marketing, but Kantner refuses to be drawn into a comparison
of revenues or shipments. PacketFront says it's shipped 40,000 ports of
its equipment to date.
The market for Ethernet broadband infrastructure is exploding, according
to Kantner. "The number of RFPs [requests for proposals] has gone up 400
percent in the past four months," he says. "World Wide Packets is receiving
a major RFP every one-and-a-half weeks." The size of projects has also
risen sharply. RFPs, he says, are now citing tens of thousands of subscribers,
rather than fewer than a thousand.
Engström
says PacketFront wins 65 percent of the projects it bids on (down from
the 80 percent CEO Martin Thunman claimed last October). But Kantner says
World Wide Packet has a similar win rate. He says he doesn't often see
PacketFront in the projects he bids for, which might explain how both
companies can claim such high success rates.
PacketFront's
control and provisioning software, called the Broadband Ethernet Control
System or BECS, enables network operators to act as intermediaries between
content and application providers and their customers. It presents a portal
to users, enabling them to select, buy, and activate services without
any manual intervention.
Engström
makes a big thing out of the openness of PacketFront's platform. It paves
the way for the rapid rollout of services and protects the network operator
from getting embroiled in developing its own services, which typically
increases opex. Other vendors also claim to have open platforms.
"Not
many vendors fully understand the customer issues," says Engström, noting
that 15 of PacketFront's 38 staff come from Bredbandsbolaget AB (B2),
an operator that pioneered Ethernet-to-the-home services in Sweden. Eight
other PacketFront staff came from Cisco, B2's main equipment provider.
World
Wide Packets' Kantner says none of these projects are plug and play, partly
because each operator has its own ideas about the business model for offering
broadband services and partly because software has to be integrated with
new and existing operations support systems (OSSs). As a result, vendors
tend to work with systems integrators and OSS suppliers to put together
proposals.
PacketFront
is no different in this respect. It says it works with partners on all
of its projects -- a reason, perhaps, why it appears to punch above its
weight.
-
Peter Heywood, Founding Editor, Light Reading
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