A success story – the UMC-1000

Yesterday I promised you to talk about the old UMC-1000 (now known as the Tellabs 1000). There are lots of reasons for this, but the one I want to emphasize here is how successful it was. Advanced Fibre Communications (AFC) was founded just about 20 years ago today in 1993. I joined AFC in April of 1997 and that year we had $317M in revenue, which has made it the fastest growing Telecom Equipment start-up of all time. AFC was based around a single product platform, so clearly this product did something right. In this blog post, I will connect you with the history and a bit of what it did right.

Originally, the plan was to build a simple platform to help the reconstruction of the former Yugoslavia after the wars there in the aftermath of the fall of Communism. Since the product had so much success in North America. people are surprised to find that internally it works on European voice standards. The UMC quickly spread in the small telco space taking market share away from other products. There was significant business in the early days outside the US, especially in China. There was some large carrier business in the US especially with GTE (and this would help greatly later). AFC was able to get approvals from Pacbell and Ameritech. These were both taken over by SWBT (which became SBc and is now AT&T) but the acquisitions of these firms killed any business. At about that time, AFC went through some major internal upheavals (missed quarter, CEO left) and struggled for a time.

The company recovered through the CLEC bubble and the introduction of a completely new managment team. AFC did not intentionally get a lot of business from the CLECs but Winstar did become its largest customer at the time. SBC did select AFC as a Project Pronto vendor, but nobody is quite sure how or why. When the CLECs went away, two vendors (Nortel and Marconi) publicly announced exits of the Access Business. Most customers, in particular Sprint LTD, picked new primary vendors and AFC won the vast majority of that business. This allowed us to stabalize the top line revenue and keep the company moving forward.

It was clear that the Telecom Equipment space was going through a disruption and we came to the conclusion that we needed to make AFC a Tier 1 carrier vendor (read RBOC and I talked about this in the post about Tellabs). We pressed on the existing business at SBC, but it was clear we were not going to displace Litespan. We tried two other approaches. We bought AccessLAN with the idea of having a large scale DSLAM that could be an IP DSLAM. We started skunks works in both VoIP and FTTH awaiting changes in deployment technology.

If anyone has followed the space at all, they know that the idea that propelled AFC to the next level was the work on FTTH. The Verizon FiOS win combined with the purchase of the Marconi Access Unit converted AFC from a company that had about 20% of its revenues in Tier 1 carriers to 65% almost overnight. One thing that people forget (and search the Light Reading archives if you want to find how big a shock these things were) is that Alacatel was penciled in for these wins with virtually no hope for any other competitors. In a span of about 12 months starting in mid-03, AFC went from the number 2 player by a large amount to Alcatel to the number 1 player by about the same amount. This was a combination of planning and being ready as well as some amount of luck.

So, if you look at this what went right often was the mistakes or changes in other companies. AFC was also planning for changes and ready to adapt when needed. All of that was part and parcel to the success, but along the way the product was matched to the market needs and that made Sales work. Each of the market wins was for a different reason and I will explore them separately in a future blog post.

The UMC is still going although its glory days are clearly behind it. 10s of millions of people use this product every day. At least 12 different times the product has been copied in 4 different countries. The product is clearly imperfect and anyone that has worked on it can tell stories about that. Now that I have given you a bit of background I will connect this to the first customer base and how it met the problem that those folks had. I will also talk about why this same success was a problem in the Tier 1 customer base.

Jim Sackman
Certified Business Coach

FocalPoint Business Coaching
Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis

Change Your Business – Change Your Life!

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