Cerent Targets McLeodUSA for Business
On December 5, 1998, Terry Brown, Cerent’s vice-president for sales, marketing, and customer service, and I, met to review McLeodUSA’s need for a “3/1 Digital Cross-connect System” or 3/1 DCS for short.
Their Request For Information (RFI), a pre-cursor to a formal bid, intrigued us as McLeod’s ideas contained therein, mirrored our (Cerent’s) philosophy regarding distributing the management of bandwidth around the network. The opportunity to influence their formal Request for Proposal (RFP) and to be considered for delivering $300 million worth of product over a five-year period was enticing. The relatively low circuit count (of DS1s and DS3s) fit the architecture of the Cerent 454 perfectly [1].
The Cerent Approach – A 1998 Perspective as it Applied to McLeodUSA
I worked with Jeff Santos and later, Bruce Hollett on Jeff’s behalf, to position Cerent and its groundbreaking product for McLeodUSA’s future growth. Since competitor Positron was already deployed, we positioned our planned integrated ATM capabilities as a technology approach to “cap and kill” Positron [2]. Consequently, we presented Cerent as the “transport vendor of choice” for all of their TDM (DS1 and DS3 circuits, for example) and for their ATM traffic across their expanding backbone network. As Alcatel was also a favorite of McLeodUSA’s engineers, it was important that we demonstrate interoperability with both Positron and Alcatel [3].
The McLeodUSA Strategy Defined
I wrote, “The McLeodUSA opportunity enables us to reinforce our position in the marketplace and play to a major strength of the Cerent 454. This strength is our bandwidth management capability in a 3/1 cross-connect application. Although we will be highlighting the STS and VT management capabilities of the ‘454,’ we will not deviate from our long-term vision of what role we want the ‘454’ to play in customer networks. The Cerent 454 will be positioned as the ‘Transport Manager of choice.’”
I added, “It will be presented not only as able to accommodate the ‘asked for’ TDM traffic fill, but also as an ATM aggregator for McLeodUSA’s data traffic . . . We will also take the opportunity to highlight the hubbing capability of the platform, such that multiple UPSR rings can be simultaneously subtended from the [main] ‘cross-connect’ location. This approach will include interoperability with the new ATM Mux device that Joe Gerke is deciding upon.”
In this strategy definition, I included a figure to clearly illustrate the area of the network we targeted with our proposal. Cerent brought significant value to McLeodUSA so much so, that a lab evaluation began in January 1999.
It’s Chilly in Iowa in January but Things Are Heating Up
Jeff Santos, on January 11, 1999, wrote, “McLeodUSA announced Friday its plan to acquire Ovation Communications. As some of you know, we are currently working on a large 3/1 DCS RFP with McLeod and [we’re] going to be placing evaluation systems in their demonstration lab next week.”
Eric Clelland, Jeff’s counterpart in sales, during 1998, had been building awareness for Cerent at Ovation and was also having some success there [6]. Both Ovation and McLeodUSA are extremely interested in the ‘454.’
Jeff added, “I believe this acquisition will strengthen our position in both accounts. McLeod simply becomes that much more important to Cerent.”
Let the lab trial begin!
On June 3, 1999, McLeodUSA announced its intention to buy Access Communications, based in Salt Lake City. The purchase expanded McLeodUSA’s voice and data communications market by 23 percent.
A couple of months later, Jeff Santos held a breakfast meeting with McLeodUSA on August 11, 1999, in Cedar Rapids. He met with Mike Boehne, Jeff McKeefry, and Trent Bonstetter. The former two gentleman had already visited Cerent in Petaluma the previous October, when they were with Ovation Communications. Bonstetter hailed from MEANS, another Eric Clelland customer. Jeff characterized their discussion as “extremely friendly and informative.”
He wrote to his salesman, Bruce Hollett, and the rest of us supporting Bruce, in growing the ‘454’ business: “Great job to date. These guys are jazzed about a long-term relationship with Cerent. Congrats to you and the support team for a job well done. Let's go drive a truck through this one.”
It turned out that Mike Boehne was moving more and more of the vendor selection process into engineering and out of research and development. The impact the acquired Ovation folks were having on McLeodUSA was being felt. Jeff told us, “Steve Graham and Ron Speltz are key folks to work with in Cedar, [with] Scott Jennings and Ron Speltz driving new backbone designs [using] OC-192 for mid-next-year with express channels and ADM sites . . . They still like 4F-BLSR for the backbone, [but they] don’t see the need for matched nodes.”
At the time, McLeodUSA remained interested in DWDM functionality on our OC-48 configurations and sough even better OC-48 optical performance. Jeff summarized the state of affairs, “They are deploying ‘454s’ today in city rings . . . Release schedule integrity is one of their TOP priorities.”
In a sign that Cerent was growing too fast in mid-1999, Trent Bonstetter made a couple of comments about the fact that he ran into some ‘newbies’ on Cerent’s Customer Technical Assistance Center (CTAC) phone line. Jeff reported, “Trent knew more about the equipment than they did.”
Fun in the Fall
On October 4, 1999, Jack DeGrace, a Cerent engineer supporting McLeodUSA in Iowa wrote, “Overall, very positive feedback on the capabilities and ease of use of the ‘454.’”
What a year!
[1] In a distributed-bandwidth-management (or “cross-connect”) configuration, performance monitoring and built-in testing capabilities of the DS1s, in particular, was a crucial feature, that the Cerent 454 did not possess in its initial Release 1 and Release 1.1 offerings. However, the fact that the Cerent 454 could address 80 percent of the small (distributed) cross-connect market more cost-effectively than Tellabs and its vaunted Titan product came as a major threat to that telecom supplier.
[2] At Supercomm 1998, held in Atlanta during June of that year, Positron Fiber Systems (PFS) Corporation of Montreal announced that its Osiris line of SONET multiplexers could be field-upgraded from its existing OC-3 or OC-12 rates to higher-rate OC-48. Positron claimed that all that was needed was a new OC-48 plug-in card to replace either the existing OC-3 or OC-12 one. Sounding like a Cerent 454, yet to be formally announced one year later, Positron claimed that service providers could directly access Ethernet and FastEthernet LANs as well as DS1 applications, such as PBXs, without having to use external bridges, routers, or lower speed SONET boxes. Having a direct DS1 to OC-48 connection was becoming a big deal. Positron started the ball rolling, but it would be Cerent that would soon eclipse PFS in this space.
[3] By the time Cisco completed its acquisition of Cerent, the upstart startup had not yet formally documented interoperability with Positron. However, Cerent had already completed interoperability with the more popular Alcatel products: The 1603SM with its OC-3, DS1, and DS3 interfaces, performed in Cerent’s Petaluma interoperability lab that Ron Ostrowski and I set up; the 1612 at the OC-12 rate in the field during the Golden Valley Electric (Alaska) installation; and the 1648 at the OC-48 rate in the field during the Grande River Communication (Texas) system line up and test.
[4] According to Acre Broadband, as of August 2017, the company presented Joe Gerke’s credentials, a portion which follows: “In 1993, Mr. Gerke joined McLeodUSA . . . he held a variety of roles in Information Systems, Research & Development, Network Services and Network Operations. He played a key role in developing the strategic proposal for the Iowa Communication Network expansion, which resulted in a $45 million network build. He was also a key team member that designed, constructed and operated of McLeodUSA ATS, one of the first ‘fiber to the curb’ networks in the nation throughout Cedar Rapids, Iowa, a network that is still operational today as ImOn Communications.” As I see it, Gerke evaluated ATM-edge technology that was soon superseded by packet-based technology to accommodate data across all telecom networks. Gerke left McLeodUSA in 2001.
[5] Cerent’s initial product release was not enough to satisfy McLeod USA. A subsequent release, due out in the summer of 1999, would be needed to support UPSR rings, VT-bandwidth management in support of the DS1 management capability, an EC-1 functionality to support SONET electrical interfaces (STS-1), and transmux functionality. Cerent also had to better define its DS1 test access capability, a feature also demanded by Williams and others. Already agreed upon was the ability of the ‘454’ to provide continuous DS1 performance monitoring and information on a planned “Cerent Management System” or CMS.
[6] On October 27, 1998, Ovation Communications visited Cerent’s Petaluma facility. Eric Clelland hosted the customer. The three attendees included Mike Boehne, Vice-president Technology Services, with responsibility for all network deployment; Greg Hutterer, Director of Product (Services) Development, responsible for new service development such as xDSL, ATM, LAN Service (TLS), and Frame Relay; and Jeff McKeefry, Director Network Engineering, responsible for deciding which equipment would be “standardized” for deployment in building the multiple city (Chicago, Milwaukee, Detroit, Minneapolis, Indianapolis, and Cleveland) interconnections. Although Ovation was using Fujitsu and Lucent equipment, Jeff was interested in looking beyond the established vendors when Eric made his initial contact with Ovation. Besides the inter-city opportunities, local ring opportunities were emerging, as well as the 3/3 and 3/1 cross-connect applications, similar to those at McLeodUSA.
[7] Keith Hanna took over the direct sales interface from Bruce Hollett in 1999 after Cisco acquired Cerent. Keith notes, “Shortly after Cisco acquired Cerent, I was hired on and ended up managing the McLeodUSA account as they ramped up during the fever pitch of the 1999-2000 market expansion. I remember that my regular travel routine was Chicago to Cedar Rapids to Minneapolis to support and serve McLeodUSA. It was quite a ride until the bubble burst in late 2000, early 2001. It was fun while it lasted.”