Start-up pushes tech for cheaper, faster networks

One of a handful of similar networking start-ups, Corvis makes fiber-optic equipment that lets telecommunications carriers shuttle voice and data across networks faster and, more importantly, at a lower cost.

In the past week Corvis has signed deals with Williams Communications and Qwest Communications. The telecommunications firms plan to test Corvis' equipment as they work to upgrade their high-speed networks.

Corvis executives, who joke that theirs is a "pre-revenue company," hope the trials will lead to actual sales of their equipment in early 2000.

A rapidly changing telecommunications landscape has given birth to a number of firms that are building new, state-of-the-art networks. To support this building boom, a cottage industry of network equipment start-ups has emerged to best serve new communications carriers like Qwest and Williams. Corvis' business alliances are only the latest examples of a new network equipment provider riding the current telecommunications wave.

Other beneficiaries include Qtera, in addition to Sycamore Networks and Juniper Networks. These start-ups posted two of the year's most successful initial public offerings.

A privately held company formed in 1997 by Ciena founder David Huber, Corvis makes complex networking hardware like routers as well as the management software that keeps a high-speed network running smoothly. It currently employs about 200 people.

Corvis' network technology allows data to be sent along a network up to 2,000 miles from its original source. This is a breakthrough, analysts say, as previous technology required carriers to give an electrical "boost" to data transmissions approximately every 180 miles to keep the data moving along. The equipment to provide so-called electrical regeneration points is expensive, and increases carriers' overall network costs.

Corvis is not the only firm working on technology to keep data moving along fiber-optic networks. Sycamore and Qtera are building similar hardware, while Ciena plans to unveil its own device to shuttle data over a network. Ciena's technology is scheduled to go into testing next April.

"We can reduce the costs for carriers and we allow them to provide service more rapidly," Corvis executive vice president Glenn Falcao said. "We eliminate cost by eliminating electric regenerators, which are the most expensive part of the network.

"When you eliminate equipment your ongoing operating costs are reduced because your maintenance and provisioning costs go down," Falcao said. "Our real value is to make the carriers more competitive."

To remain competitive, new carriers such as Qwest, Level 3 Communications and Bermuda-based Global Crossing continually update technology and equipment in their networks--a boon for Corvis and other networking firms.

"There's a breakthrough happening in optical networking that eliminates some of the electrical regeneration points," Qwest vice president of emerging technologies Vab Goel said. "It would take months to provision lines in the past. Now we can do it in hours."

Nearly 60 percent of network service providers said network hardware constraints keep them from making the transistion to a fiber-optic network, according to a recent study by Forrester Research.