FiOS ONTs – Tellabs buys Vinci

Cost reduction was hard and prices had climbed a bit. That started the ONT business in the right direction. Tellabs took another step by buying Vinci Systems for their lower cost ONTs.

I had first met with Vinci when I was asked about doing interoperability work in the Spring of 04. It was not a great call as we were in the middle of a development crisis around FiOS. I saw no way to add yet another bunch of work on people’s plates by including Vinci ONTs in the offering. Making ONTs interoperable was a lot more work in those days as their was lots of work to do on the Network Management side. ONTs were provisioned through the OLT over a channel called the OMCI. That meant that OLTs needed to be aware of what ONTs were plugged into them and treat each one to meet its needs.

Verizon was unhappy with my stance on Interoperability. I pointed out to Mark Wegleitner (Verizon’s CTO at the time) that we wanted Interoperability, just not right now. Given the pressure that he put on us to get everything working, he relented.

Now AFC/Tellabs was working on a cost reduction plan over the summer of 04. The goal was to get us at or just beyond break even on the ONTs. Tellabs met with Vinci and found that they planned to produce even lower cost ONTs than the AFC plan. Of course, Vinci had not yet understood all the electro-mechanical requirements put on AFC by Verizon. Vinci felt it could get many of the more costly requirements waived.

So, the Vinci deal closed and those ONTs became the focus of all cost reduction. Of course, none of the costly changes were waived and the Vinci ONTs ended up within single digit dollars of the cost of the planned AFC ONTs. On the surface this meant that the Vinci deal was a bad one. My take is otherwise. The Vinci CEO had a great relationship with the Verizon Technical team. Having a dedicated ONT team meant that each development group could have clarity of mission.

These were the ONTs that became available with the release that created stability in the Verizon network and were the mass deployment vehicle for FiOS. Over time we built many ONT variants, but what was known as the SFH ONT (Single Family Home Optical Network Terminal) became the only ONT that was deployed. The “business” ONTs had many problems that had nothing to do with Tellabs. Verizon could not figure out how to manage their deployment, so it just did not happen. This specification and disuse of capability happened in all aspects of FiOS. Verizon would specify a feature, Tellabs would develop it, and the Operational Teams could not use what was developed. More on this later as it had a signficant impact on the outcome of GPON.

I hope everyone has a Happy New Year! I will be posting something related to the New Year on Thursday and then a more general business topic on Friday. Back to ONTs on Monday.

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis
https://www.eventbrite.com/e/sales-training-sales-success-intensity-powered-by-brian-tracy-tickets-8404400789

 

FiOS ONTs – A Very Misunderstood Business

I thought a lot about this and the ONTs were such a big part of the decision making around FiOS from both a Tellabs and AFC standpoint that they deserve a story arc of their own. I need to set a baseline for this and that is today’s blog. There are some items that people need to understand about the technology and business involved here before we can discuss the outcomes easily.

To start with, “What is an ONT?” Well a Fiber To The Home system has two ends: an Optical Line Terminal (OLT) and a collection of Optical Home Terminals (ONTs). The ONT sits at or near the residence and converts the signals on the optical pipe to interfaces that the home needs. In the case of FiOS, this was Ethernet for Data (originally), 2 – 4 POTS lines and Coax for video. Verizon wanted these to sit in the same location as the Network Interface Device (NID) that they deploy in the copper network. For those who are not sure what a NID is, those are the grey boxes that sit on the side of your home where the copper phone network is connected.

As I posted earlier, we bid the original ONTs from AFC at a significant loss and expected to cost reduce them to profitability. However, the very first thing that happened is that Verizon “added” cost. I know this sounds odd, but Verizon had a model for deploying ONTs that was different than the very first ONT designs that AFC had. This made the ONTs a Verizon specific design, although they could theoretically be deployed by anyone. The changes were mostly electro-mechanical and had to do with: Fiber Termination, Powering, and Environmental Issues.

A fiber optic cable is a piece of glass that is encased in a plastic sheath. When most companies lay fiber cable, the cut the cable to the length required on site and connect it through a process called Fusion Splicing. This requires expensive equipment, lots of technician training and a long time to make happen. Verizon chose a different method which was to have a specialized fiber connector put into the ONT to provide a path for the light. This saved the process of Fusion Splicing but added significant cost to the ONT in connectors and other items.

Powering was always a challenge. The first problem that happened with Verizon was that they had a desire to have very low battery maintenance. The battery is there to provide power during local outages and like all batteries have a fixed life. To lower the need, Verizon needed a specific battery composition. This meant that we could not use an off the shelf battery and the vendor charged us more for the Verizon specific battery. Powering changed greatly over the years and was always a problem.

Finally, there was the need to seal the ONT environmentally. As it was we built this as a box in a box, but Verizon wanted to be able to dunk ONTs in water. This meant that we had to really seal that inner box. The box itself was not much of an issue but all those connectors were. Now we had to seal the connectors so that they didn’t leak. This meant not only did we have to prevent leaks around them, but also leaks through them. If you look at a phone or an Ethernet connector, water can work its way through the connector itself. So we had to have “gel filled” connectors to seal things up.

Now that I have gotten through all of that, here is the business issue. All of these items were very hard to cost reduce. We had plans on how to cost reduce the electronics. We did that for years. I even had ideas on how to cost reduce the optics (and we had done that at AFC before). But how do you cost reduce battery chemistry? The other bit of that which was a challenge is that these electro-mechanical issues dominated the cost of the ONT. So not only did they cost more than we wanted, but the very expensive bits were hard to reduce.

A lot of this happened AFTER we won the ONT and some of these costs were shared with Verizon. But this is just the start of the story. Next up: Tellabs buys Vinci Systems.

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis
https://www.eventbrite.com/e/sales-training-sales-success-intensity-powered-by-brian-tracy-tickets-8404400789

 

Managing Resources – Are you spending wisely?

I posted earlier that Friday would become more free form and less directly connected with anecdotes about my work history. Today, I want to talk about managing limited resources. This is an issue in business and in your personal life.

If I loop back to my time at AFC, we were always faced with companies wanting us to buy them after the Telecom Bubble popped. I used to call my car (a 97 Mitsubishi Galant) the “M&A Limo”. I would get a visit from a banker or a call from a firm and would then do a site visit. We did not pull the trigger on a lot of things that were available. One of the primary reasons was limited resoures. Money was not the resource in question, but time was. If we did one of these random acquisitions, we would have had less energy to do something on our strategic path. But for me to spend a day on a visit to get an idea if there was “anything there” was a good use of time. I always learned something.

I always ask clients “Who is your ideal client or prospect?” Again, this is a limited resource issue. It is not that I wouldn’t do business with anyone else. It is that where do I spend the bulk of my time and money. I have gotten lots of Val-Pak ads in my mailbox for products and services I can not use. That money is wasted, even if it is small. If you visit someone who can not use your product or services, what did you accomplish. On top of that the opportunity cost of spending time and money in a bad way is huge.

The same goes true in your personal life. Working is a means to some other end. Almost everyone gets money in order to do something with it. I see people using consumer credit and not realizing the long term cost of that money. It is not always bad to do so. If you spend your money on paying off your credit cards, then you are not buying something else you want or need. Interest rates in consumer credit are huge 15% – 30% or occasionally more. If you really need something, you are better off borrowing against a 401k so that you have a lower interest rate and end up paying the interest to yourself.

Think of it this way. Take the price of the item and add in the interest rate you are going to pay on it. If the interest rate is 30% then raise the price 30%. Is the item worth it to you now? The reality is that a 30% interest rate is going to cost you a lot more than 30% but that is an easy way to start.

If I return to coaching, time is a big issue with many clients. They want their business to earn them the same or more money for less time spent on work. And it is possible, you just have to rethink what you do and how you do it. Time with your family is a precious commodity. More can not be created unless you create it. Some business owners are working over the holidays but their employees have taken the time off. If that is you, let’s chat.

Monday I return to the story of what is now the Tellabs Access Business Unit.

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis
https://www.eventbrite.com/e/sales-training-sales-success-intensity-powered-by-brian-tracy-tickets-8404400789

 

An Anecdote from My Past

I thought about what to write today and I have kept coming back to a story from my past. This goes back past my days at AFC. It goes back before I ran the ISX 5300 at Racal-Datacom. It goes back before my days making a DMI Terminal Adapter (anybody out there remember the DMI Computer to PBX specification? I doubt it). This goes back to my first job out of College at Racal-Milgo.

I moved to South Florida to join Milgo in July of 1983. They had a great program for fresh college students that allowed them to spend 3 month blocks in different departments. This let the student and company learn about each other and find the right spot. My first block was in the statistical multiplexer aka Mux Group.

I worked with some very interesting folks Henry Scanzano, Bob Nelson, and Steve McKinney were my first project mates. We were all spending time on the “High Speed Aggregate Card” also known as the QuickerMux. I was writing 6809E Assembly language and was taking over the Craft UI from Steve. The software team rolled up under a couple of really nice guys: Bill Saavedra and Alex Downie.

The company had a number of young engineers and we hung out together and did things. We also spent time going out to Happy Hours on Friday. Ah the life of a young engineer in Miami/Ft. Lauderdale. The Mux Group also had a monthly poker game (nickel, dime, quarter) at various folks houses. It was great learning, a good group and I had fun.

When Thanksgiving rolled around, I was going to be staying in Florida for my first major holiday on my own. If you have ever done that, it is a lonely feeling. I was a bit down and depressed about it. When one day about a week before Thanksgiving, Alex invited me to his house for Thanksgiving Dinner. I had a great meal and a great time with Alex, his wife and his kids. Thanksgiving has always been my favorite holiday. When I was little we got to visit with my Dad’s family in New Jersey and Connecticut. When I was older my Mom and Grandmom put on a huge feast. Having a place to go was a big deal to me.

I can’t tell you what this simple act meant to me. I know it probably was not a big deal to Alex, but it might have been the single nicest thing anyone has ever done for me. He passed a couple of years later from lung cancer. Scott Buratt and I drove Bill Saavedra to see Alex in the ICU. I remember thinking that Alex was not there but in my heart. I still think about Alex every Thanksgiving.

So, I blog a lot about business but remember business is full of people. And I have had the great fortune to meet wonderful folks along my journey.

I hope you all have a great Holiday Season.

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis
https://www.eventbrite.com/e/sales-training-sales-success-intensity-powered-by-brian-tracy-tickets-8404400789

 

Tellabs Takes Over: First Moves

Well on December 1, 2004 I became a Tellabs Employee. Things had already changed with John Schofield, Keith Pratt, Jack Ermey and others leaving immediately. More to come from a personnel standpoint but the next thing that changed for me was my direct boss and role.

I started working for a gentleman named Carl DeWilde. He came from Fujitsu and Xterra and was a former colleague of Krish Prabhu. He had a lot of time working in Telecom especially with Tier 1 Carriers. He had no experience in Access and that why they kept me on. My role was to advise him on how to deal with the Access Products and also the router products he had picked up. There was immediately a problem with the rest of Tellabs. They had no idea what to do with a person that was (in the Telecom Equipment world) a public figure. I had relationships with the Trade Press, Industry Analysts, and Financial Analysts. Tellabs wanted me to completely stop talking to all those people. My favorite episode of this was Supercomm 05. I had people stop by to say “Hi.” The Marketing and PR types would then drop out of the sky to yell at me about talking to people that I had spent 5 years building relationships with. This turned out to be a symptom but we will get to that.

From a product standpoint, lots of changes happened immediately. Tellabs cancelled the GPON development that we had ongoing. We were building a proof of concept similar to what we had done with BPON, but Tellabs wanted to focus on BPON. Same thing happened to our Next Generation Platform. We were in the early days of building an Ethernet Switch based product, and it was immediately cancelled. Our IOC release was greatly curtailed, with really only the Gigabit Ethernet Interface (part of the BPON RFP) continuing. I used to hear that AFC abandoned the IOCs, but I can tell you it was Tellabs that killed any ongoing Development activity.

The other thing that happened was that Tellabs finally came back and affirmed the decision that we had already taken at AFC to discontinue the Teliant (the product we had bought from AccessLAN). We had 75 customers but we thought we could replace the bulk of the applications with the former Vivace product from Tellabs. This took longer than we wanted but we got it done over time.

Talk about your focus. We went from 8 people at the end of 03 working on BPON to 200 by the end of 04. Tellabs had already decided to buy Vinci Systems for its ONT portfolio. The best thing that came from this focus was a release that fixed the vast bulk of the initial issues with Verizon. There were still plenty of challenges but the flood gates to deployment opened. The results of this focus from this standpoint were excellent. The other ones are yet to come.

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis
https://www.eventbrite.com/e/sales-training-sales-success-intensity-powered-by-brian-tracy-tickets-8404400789

 

The AFC Story Arc – What are the lessons?

So we have gone from a pesky start-up that found a niche in the small carrier business to one that became the leader in the North American Access Business. I think people overlook the power of this story because it ended with a buyout that was less than people had hoped. I remind people that AFC was the fastest growing telecom equipment start-up of all time. We survived the telecom meltdown. We became a leader in new technology deployment. I have talked a bit about some parts of my role in these events. But will connect this even more directly to myself here and some things I took away from it.

I joined AFC as the Director of Hardware Engineering. At the time, the development teams were organized with a “Time to Prototype” model. What I saw quickly is that we struggled with being done with things and putting them into volume production. I focused on this issue with a single mindedness and made changes to our processes and language to make this change. I can tell you that many engineers were not happy with these changes, but within a year I had stabilized our development systems to be predictable. I had to do this in a time that we could not change everything instantly. I really began to understand the process of change in an organization. I set a goal of “Time to Profitable Volume” and worked to fix one thing at a time. Not everything at once. All of this set a process in motion that created its own momentum as it progressed. Change did not happen at once but in an escalating fashion. By the end of the first year of this program, we were able to clean up the vast bulk of our designs and free up engineers to work on new things.

I got into the Technologist Role during a potential acquisition of AFC by Ciena. This didn’t come off for valuation issues, but this introduced me to our problems at a top level. We had already figured out that we were going to miss our objective of $1B in Revenue before the Year 2000 (aka 1B42). The problem with that goal was that $1B in revenue was not achievable without a significant position in the Tier 1 North American Carriers. But our product was not suited for deployment by those carriers and in the late 90s not interested in a new product to fill that slot in their networks. What I learned here is the value of looking at a business from the outside – from the view of competitors and customers. We acted for a long time as if we could just convince the world to believe our vision without understanding the needs of others.

A couple of other lessons are the role of Executive Management and Leadership. The first and most important job is to tell people what is important so that they can align their decisions. You can’t make all the decisions from the top. What you can do is help people understand where you are going so that they can weigh the choices that they have in a common way. This helps people drive a company in a common direction. But people need to understand the desire of Executives to impact the outcome of the company. Many times I saw decisions not brought to Management until only a single path forward was possible. What happens then is the presenter now owns the outcome of the decision. If the Executives are brought in sooner, they will provide input to the path chosen and thus have joint ownership in the outcome. I think that this level of joint respect is important in the creation of a great company. If it doesn’t exist then the company is out of balance.

I will continue the Access Story a bit by giving some picture of what happened inside of Tellabs, but we have reached an inflection point. For those of you who won’t be reading over the next couple of weeks, Happy Holidays. I will “see” the rest of you on Monday.

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis
https://www.eventbrite.com/e/sales-training-sales-success-intensity-powered-by-brian-tracy-tickets-8404400789

Sonoma News and Notes

As we come to the end of December, I want to remind you that my Sales Success Intensity Training is at the end of January. Early Bird pricing is coming to an end soon and the time to take advantage of the $100 off is coming to an end. To learn more or register for this training, follow this link: https://www.eventbrite.com/e/sales-training-sales-success-intensity-powered-by-brian-tracy-tickets-8404400789

Today I want to spotlight another local Sonoma County Business. I recently spoke to Craig Gaylord of Sonoma Tech Support. Craig provides IT support for home users and small businesses in the North Bay. He is a Microsoft Certified Professional and you can learn more about his services at http://www.sonomatechsupport.com/

Question: Craig, How did you get started in Tech Support?
Answer: I was doing this for all my friends for free. Somebody said, “Hey you really like technology. You should do this as a job.” And that is what I decided to do.

Question: So you went into Business for yourself right then?
Answer: No, first I got into working for others. First, I contracted and then became a full time employee in desktop support. I started before the tech bubble and have been in the industry since then.

Question: You have been at this awhile then?
Answer: About 17 years total and the last 6 of them working for myself. I had a former colleague that started his own business earlier and he told me that I should go into my own business. I started in 2007.

Question: Pretty bad timing right?
Answer: The economy was awful but I was able to make my own business even then. It helped that I had a friend mentor me around many pitfalls. I wish I had had access to a Business Coach!

Question: What separates you from your competitors?
Answer: There are two aspects. First, I am a people person and able to put non-techies at ease while I explain to them what is going on. Second, I work on all kinds of devices from Phones, Tablets, Desktops, even servers or networks. As I like to say, “We make Techology work!”

Question: Can you describe to me your typical client?
Answer: Every one is unique but the bulk of what I do is for either home users or small businesses. Once a company gets more than 20 employees, they will have a dedicated resource. Larger firms like that might use me in a pinch, but I mostly work with smaller companies.

Question: Is there anything specific that people should know about?
Answer: Right now a lot of what I am doing is migrating people off of Windows XP. Early in 2014, Windows XP will stop receiving updates. That means that users will become more vulnerable to hackers. I am helping people move from Windows XP normally to Windows 7 or Windows 8. Some want me to move them to a Mac and that is not a problem either.

So, if you know someone with broken Technology Craig is a great place to start. Just go to his website and all his contact, services and rates are there. I moved this post to Thursday since the next two Wednesdays are Holidays. I am playing with most posting calendar a lot. I am at the end of AFC as a standalone company, but want to talk about some parts of what happened post-merger. I will break up things a bit more once all of that is done combining specific events with coaching material. These may or may not be AFC related. Also, I want to pull forth some elements of personal finance as I see that as an issue for younger folks. So, stay tuned.

Jim Sackman
FocalPoint Business Coaching
http://www.jimsackman.focalpointcoaching.com/
We Focus On Your Business – Time, Team, Money, Exit
Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis
https://www.eventbrite.com/e/sales-training-sales-success-intensity-powered-by-brian-tracy-tickets-8404400789