Slowdown Hits RiverDelta
By Evan Blackwell
from the June 4, 2001 issue of Broadband Week
Emerging cable equipment vendor RiverDelta Networks basically saw nothing but smooth sailing for the first two years of its existence. But the slowing pace of capital spending finally has caught up with the company.
The Tewksbury, Mass.-based manufacturer of cable modem termination systems (CMTS) laid off roughly 20 percent of its workforce on May 18, bringing its total number of employees down to just over 200. According to Jeff Walker, RiverDelta's vice president of marketing, most of the cuts came in the sales department.
"It was just the prudent thing to do given the current market conditions," Walker says. "We're getting great market traction right now for our products, but for us to be fiscally responsible this move was necessary."
Even with the recent slowdown in the CMTS market, RiverDelta's been on the fast track toward profitability thanks to its next-generation BSR 64000 and BSR 1000 routers based on the cable industry's DOCSIS interoperability standard. In late April, the company signed its largest equipment deal to date with Insight Communications, the nation's eighth-largest cable operator.
According to Walker, last month's decisions will have no effect on RiverDelta's shipment commitments to its customers like Insight. He also says the company still believes it can take market share from the DOCSIS CMTS market leader, Cisco Systems, who still holds more than a 70 percent share of the market.
"None of those plans have changed at all," Walker says. "We've still got more than 200 people and it's a strong group moving ahead."
The CMTS market has gotten more and more crowded in recent years as cable operators continue migrating from proprietary technology network, dominated in the old days by vendors such as General Instrument, now a division of Motorola, to DOCSIS standards-based systems.
According to a cable market study released earlier this year by Kinetic Strategies, sales of DOCSIS cable modems and CMTS could exceed $6 billion by 2004. Besides Cisco, RiverDelta is competing against such established vendors as ADC, Arris, 3Com, Motorola, Terayon Communication Systems and Tellabs, plus startups such as Cadant and Pacific Broadband, that--unlike RiverDelta--do not yet have a CMTS the cable industry has qualified as meeting the DOCSIS protocols.
Privately held RiverDelta still would be considered a startup by most, and the company has built a close-knit group of employees over the last two years.
"These moves are always difficult. I've been a part of them at smaller companies, and larger companies. It's never easy," Walker said. "You build relationships and friendships, but our people understand. They realize the market situation right now."
|
