Full Speed Ahead for Meriton Networks

Source: Ottawa Citizen, Jeff Buckstein
March 7, 2006 - Ottawa, Canada
 
Firm's product allows faster movement of data on networks

With technological innovation taking place at dizzying speed, it's hardly surprising that the demands placed upon optical networking architecture are often stretched to the limit, unable to handle the volume of traffic and high speeds needed to allow carriers to perform at the top of their game.

That's where Meriton Networks Inc. comes in. Backed by just over $100 million U.S. acquired over two rounds of venture financing, the Ottawa-based company is simplifying the complexities of modern network architecture for carriers all over the world. And none too soon, says Mike Pascoe, Meriton's president and chief executive officer, because the problem is going to become more acute as even heavier demands overload current networks.

"The carriers require a way to be able to transport various broadband services from Point A to Point B. Our products help them do that. We carry an awful lot of traffic in a very efficient fashion, as well as in a very low-cost operational model to help them reduce their expenses," he explains.

"It's not that they've done a bad job in the past. It's just that there are much stronger demands going forward, and also a considerably larger demand for carriers to be more efficient and get their costs down," he adds.

Mr. Pascoe, who took over the reins of Meriton in early 2005 after a four-year stint on the company's board of directors, is a veteran executive who spent several years at Newbridge Networks and Bell-Northern Research and was chief executive officer of PairGain Technologies, which was acquired by ADC Communications in a multibillion-dollar deal in 2000.

Meriton, which last June received $54 million in its latest round of financing from a joint venture led by VantagePoint Venture Partners and Nomura International, with participation from several others, began operations in 2000 as Edgeflow Inc. The corporate name was changed to Meriton in 2001 to reflect "the merit of having a strong optical network," Mr. Pascoe says.

Meriton's flagship product is its Optical Transport 7200, which was released in 2004 after two years of testing. "This was in the period when there wasn't much going on in the industry," Mr. Pascoe recalls. "So it was a challenging time to grow the business."

The Optical Transport 7200 helps transport traffic quickly and efficiently at a time when increased demand has put a strain on the services available to the end user. Metaphorically speaking, in order for a carrier "to be able to take broadband services to an end customer, they have to have very fat pipes" that can carry a lot of traffic, Mr. Pascoe says.

The Meriton product assists the flow of traffic by multiplexing, or allowing more traffic to be carried along a single fibre. It also provides carriers an optical switching capability to allow them to optimize their networks and provide more real-time services to their customers.

Meriton has also developed an end-to-end architectural concept called Agile Optical Networking Architecture, designed to help clients deal with networks that have difficulty sustaining a linear connection between two points.

Whereas in the past carriers have tended to establish ringed networks to get around that problem, today they are moving toward a combination of ringed and mesh network architectures.

A meshed network using multiple nodes allows for more robust traffic and a faster recovery time should traffic be disrupted between Point A and Point B because there are more rerouting possibilities.

"Both ringed and mesh networks still exist and are important, but mesh is seen as being more future-proof network architecture. We address both of them," Mr. Pascoe says. "In fact, our products are able to address the linear, ringed and mesh networks. That is quite unique."

Meriton broadened its reach in November with the acquisition of Mahi Networks of Piscataway, New Jersey, a supplier to reconfigurable optical transport systems. Mahi was acquired because of the potential synergies involved in combining Meriton's high-speed optical networking systems with Mahi's solutions, particularly its Reconfigurable Optical Add/Drop Multiplexer (ROADM), which helps expand the capacity that can be directed through fibre networks.

"That was a very significant move for us," says Mr. Pascoe. "The real thriving synergy that came out of that was in their technology, (which is) an important addition to our platform. The ROADM technology is a very cost-effective way to (handle) a lot of pass-through traffic within a ringed architecture. The Mahi product, which is now our 6400 Optical Transport platform, is one of the leading products in that space."

Meriton's major clients are telecommunication companies such as Pioneer Telephone of Kingfisher, Oklahoma, and Fidelity Communications Company of Sullivan, Missouri, as well as utility companies such as Telecom Ottawa, a division of Hydro Ottawa. Meriton's first client, in 2004, was also a utility power company -- Sho-Me Power Electric Co-operative of Marshfield, Missouri. Sho-Me uses Meriton's Optical Transport 7200.

"The main benefit for us is (that) it has relieved some capacity issues we've had in our network," says Mark Keeling, Sho-Me's director of telecommunications. "It has also allowed us to begin plans to install a network with a lot of maintenance advantages. This is a device that can bring in multiple fibre routes from all different directions."

Another high-profile telecommunications client is British Telecom, to whom Meriton is providing services for BT's 21st Century network project through a strategic partnership with Fujitsu Telecommunications Europe Limited.

"They're moving towards an Internet Protocol (IP) only model, so that all services, whether they be voice, video, data, or whatever, will basically be coming on to the network," says Mr. Pascoe.

"That's a major step forward and we're a big part of that."

Moreover, the timing of that announcement last June was "very important in terms of securing financing that will now allow us to move more rapidly," he adds.

There are more than 150 employees at Meriton, about double the contingent of a year ago.

When the tech recession hit earlier this decade, the company was forced to pare back from a previous high of nearly 115 people, but the recovery of those numbers, and then some, has largely been "driven by these export opportunities, which are critical to growing this company," Mr. Pascoe says.

The bulk of Meriton's exports, which compose more than 95 per cent of Meriton's business, are to four major regions -- North America; Europe and the Middle East; Asia-Pacific; and the Caribbean and Latin America. There are plans to open new offices in each of those locations, in addition to the offices already established in Britain, Hong Kong, South Korea, Miami, and Mahi's former base in Piscataway, New Jersey.

"With our knowledge and experience in the industry, we know where the opportunities are, and we have an aggressive plan to become an even bigger international player," says Mr. Pascoe, who notes that travel to other parts of the globe has often been a real eye-opener.

"I'm always amazing at how advanced some of those communications networks are. In Korea, they're dealing with bandwidths to homes and businesses that we are probably five to 10 years away from. We often think that networks here in North America are the most advanced in the world -- and don't get me wrong; they're very good -- but there are some very different areas of the world that are more advanced in that regard," he says.

© The Ottawa Citizen 2006