New funding has Matisse Networks ready for action

September 10, 2007 By Stephen Hardy -- Matisse Networks (search for Matisse Networks) has closed a $45 million Series C round that senior management will use to take its optical burst switching technology from customer trials to worldwide sales. The latest round brings the company's total funding to $80 million and should tide over Matisse Networks until it reaches profitability, says Chairman and CEO Sam Mathan. He expects his company to reach that milestone sometime in 2009.

Merrill Lynch PCG led the round with an investment of $35 million. All existing investors -- including Menlo Ventures, Monitor Ventures, Walden International, and Woodside Fund -- joined the round as well. Mathan and Mark Showalter, Matisse's director of product marketing, say that the inclusion of Merrill Lynch highlights the market potential of optical burst switching, since the Wall Street firm isn't one of the usual tech VC suspects.

Mathan says he will use the new funds primarily to expand his sales efforts worldwide to capitalize on the momentum he expects current customer trials in North America will generate. To this end, the company has hired Doug Stewart as vice president of sales for North America, Europe, and the Middle East, and Shigeru Ota to be vice president of sales for Asia Pacific. Matisse also announced that it has named Gouri Shankar as head of the company's design center in Hyderabad, India.

Matisse will target its Ethernet over WDM metro transport and switching products at carriers and enterprises looking to migrate from SONET/SDH-based architectures to more packet-friendly transmission methods. Mathan and Showalter tout the company's optical burst switching technology as more economical and efficient than current WDM and ROADM platforms.

Optical burst switching architectures -- in which transponders burst packets onto the network across a number of different wavelengths, depending upon the packets' ultimate destination and the network's current traffic load � can provide as much as a 50% reduction in operational and capital expenses compared with conventional WDM equipment, Matisse asserts. That's because each transmission in conventional systems requires a pair of transponders for each wavelength path. Conversely, each of Matisse's proprietary Tango transponders uses standard tunable C-Band lasers to transmit on multiple wavelengths, switching wavelengths in nanoseconds thanks to electronic control of the company's design. Thus, two transponders can accommodate traffic flows on multiple paths, saving transponder costs. An introduction to Matisse's equipment appeared in the November 2006 edition of Lightwave. An article written by Showalter making the case for optical burst switching will appear in the upcoming October 2007 edition of Lightwave.

Despite the unconventional transmission method, Showalter says that the Matisse hardware can support restoration times below 50 msec. The equipment supports physical ring/logical mesh architectures that use counter-rotating ring paths. In case of a failure, traffic is "intelligently steered" around the break.

Mathan says the equipment is currently in trials with potential carrier and enterprise customers. He expects to be able to announce deployment customers next year.

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