StimulatingBroadband.com 03/14/2011 San Francisco - Three time stimulus contract-funded winner Cyan Optics, Inc. this morning announced it was named to the sixth position on this year’s “Next Big Thing” listing of the Wall Street Journal.
The index, published last Friday for the second year, ranks the 50 leading venture-backed firms in the U.S. as assembled by the Venture Source unit of the Journal’s parent, News Corp.
"Our placement on the Wall Street Journal's Next Big Thing list is an exciting confirmation of our significant contributions to network transformation," said Michael Hatfield, president and CEO of Cyan. "Our solutions have been fundamental for wireless-backhaul expansion, cloud-computing connectivity, as well as TDM to packet transitions for our customers."
Cyan remains privately held, with investments from VC firms Azure Capital Partners, Norwest Venture Partners, and Tenaya Capital.
Cyan’s selection for the list will no doubt give it more than mere bragging rights in the white hot market for optical equipment. Cyan sits in the optical transmission subsector. VentureSource selected 50 companies “in five industries based on capital, executive experience, investor knowledge and their ability to succeed via their innovations." Cyan, according to the company’s release of today “was listed among the top 3 companies in the information technology sector.”
The optical sector is today being driven to new heights (no, a survivor of the fiber b**m will never use the b-word) by the surging demand for bandwidth “projected to sustain the historic doubling of metro and regional packet traffic every 12 to 24 months”, in the words of the company release.
Cyan, like its neighbor on North McDowell Boulevard in Petaluma, CA, unified platform manufacturer Calix (NASDAQ: CALX), identified the Obama Administration’s broadband stimulus program early as a growth opportunity. This effort became especially productive for both firms, and for Occam Networks, now a post-acquisition unit of Calix. As the largest telcos and cable operators declined participation in the program, nimble firms that were experienced selling to independents and to the consolidating rural local exchange carrier (RLEC) sector moved aggressively to support carriers with the federal application process.
Larger service providers tend to have longer product evaluation cycles, and less flexibility in their procurement decision making. The independents, mid-sized RLECs, and telephone cooperatives, all of which were legacy government loan borrowers have proven to be the sweet spot for these firms, and for Cyan competitor Infinera Corp. (NASDAQ: INFN).
As we reported in February, Cyan has announced three broadband stimulus funded sales wins to date. We anticipate more wins for the optical transport gear maker. As the firm's Frank Wiener, VP of marketing, told us "We also continue to see many new projects which are yet to be awarded."
Given its success in the stimulus program, Cyan is also well positioned to take advantage of the new Farm Bill-funded federal subsidies for rural telecom projects being released now by the Rural Utilities Service of the U.S. Department of Agriculture (RUS).
Cyan, launched in 2007 by Hatfield, who was also a founder of Calix, makes packet optical transport platforms and software systems that support the operations of both metro and regional transport networks of service providers. The firm’s two core product lines are the Z-Series™ of packet-optical transport platforms, and the CyMS™ multi-layer management system.
Recently Cyan rolled out its services arm, with a network operations center (NOC) management offering branded CyNOC Services which “instantly add subject matter experts and redundant NOC services to the bench strength of existing operators without all of the associated expense and overhead of dedicated resources”, according to the company. "Time to market execution is more critical than ever," adds Hatfield. "Our solutions easily snap into existing networks, providing services differentiation and operational simplicity that our customers use to gain market advantage."
"The Next Big Thing" List
The Wall Street Journal's Next Big Thing winners are companies that have "the greatest chance at success through their innovations. Companies also had to have raised an equity round of financing in the past three years, and be valued at less than $1 billion to be eligible for the ranking," according to the Journal's statement.
Rankings were developed using proprietary data from Dow Jones VentureSource, more than 67,000 venture-backed companies, as well as more than 20,000 private-investment firms world-wide. The list is drawn from the approximately 10,600 U.S.-based, privately held venture-backed companies in the VentureSource database as of Nov. 30, 2010. Rankings are calculated based on company scores in the following categories: track record of success for the venture-capital investors who sit on the company's board, amount of capital raised in the last three years, editorial ranking from Dow Jones VentureWire editors and reporters, track record of success for the entrepreneurial CEO and founders and recent growth in the value of the company.
For Cyan, the Dow Jones VentureSource listing and the high placement ranking on it mean that another Hatfield startup in Sonoma County’s Telecom Valley is very much at an inflection point. That is not a bad place to be as the optical sector is right there too.
There are a lot of questionable market rankings, “Top 50 Whatever” Lists, and the like strewn across what passes for the business and trade press. The products of the Dow Jones VentureWire are not among them. “The Next Big Thing” list is the real deal. So is Cyan. ‘best keep an eye on both as we go into what we will never call another optical b**m era.
From The Wall Street Journal News Hub: