The Skunksworks Projects - Organic Growth at AFC

Last time I posted about AccessLAN, but we did not only go after inorganic growth. We did not only pursue that path, but we worked on organic growth as well. As I have blogged earlier, we had concluded that we would not win a head to head battle in the DLC space with Alcatel. Alcatel had too big of a lead and there was no compelling event that we could find to make the carriers switch.

So, we went after the DSLAM space with AccessLAN. We also prepared for a potential technology change that would create an RFP. Now we did not know exactly what would happen when so we went after two separate paths. The first was the change of voice switching to Voice over IP or VoIP. The second was extension of Fiber to the Home or FTTH. Our plan was to build proof of concept products in each space and find some early customers. That way when a large carrier was ready we would have the products ready and field proven.

We had one other Ace - Sprint LTD (later Embarq and now part of CenturyLink). When Marconi pulled out of the Access Market, Sprint pushed all of its business to AFC. This meant that we had a large relationship with Sprint and they quickly became our largest customer (over $100M annually both internally and as a distributor). Sprint was looking at both of these technologies.

On the VoIP front, you may recall Sprint did a huge deal with Nortel on updating the switching infrastructure. AFC got involved when the Nortel also pulled out of the Access Market. We worked with Centillium to build a Access Gateway so that we could provide a packetized voice interface to the Nortel switch. Nortel was unhappy with this whole thing but also did a very strange version of the Interface.  This made the direct product created unmarketable to other firms, but the technology base could be changed to do other things.

On the FTTH front, Sprint did an RFP and selected vendors but told us privately if we showed up with a product that we would get the business. They had a huge investment in our infrastructure, and they were a long way from a large scale FTTH build. We looked for FTTH technology partners and approached Terawave and OSI. Both companies agreed to license technology for $10M. We then had a visit from Broadlight and they were going to develop technology for free. I estimated that if Broadlight went out of business, that I could buy the technology and finish the development for less than $10M so we went that way. In a later blog, I will talk about this relationship but that is all I am going to say for now. Now, I chose that we would build this on BPON because of two simple reasons: I did not want to invent a new method and it matched our technology base better. Should/could we have done EPON? Maybe - but we had no Asia channel and there was no progress for EPON in North America.

Both of these efforts proceeded out of our Florida office. Both were on display with some parts working at Supercomm 2003. Nobody really paid much attention to either of them, but they were there.

Now, I was handicapping the race between which one would happen first and my bets were always around VoIP. Given the lack of new 5Es and DMSes, I thought the network would move to VoIP before we would have a significant FTTH build. In this case, I was completely wrong.

I want to say one more thing here. The use of the Florida office was highly controversial within the organization in total. I want to say as well these teams were small (under 10 people each), but people in California were unhappy in that they could not have any access to newer technology.


Jim Sackman
FocalPoint Business Coaching
We Focus On Your Business - Time, Team, Money, Exit
Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis