Privately held Vivace, a 4-year-old start-up based in San Jose, California, offers IP switches for the edge of the network that Tellabs says will complement its own series of transport and access systems. By expanding into the service provider edge router and switch market, Tellabs claims to be entering a market that analysts Infonetics Research estimate will be worth $3bn this year and will grow to $5bn by 2005. Tellabs CEO Michael Birck said the acquisition was the next step on its path to profitable growth.
However, Tellabs is a long way from that goal. In April it bid farewell to 665 employees, or 14% of its workforce, to cut costs. In its first quarter to March 28, the Naperville, Illinois-based company reported a net loss of $43m, compared with a net profit of $5.3m, on revenue 40% lower at $222.5m.
Source: Computerwire
