Santel Has Left the (Telecom) Building

There's a bit more going on at Santel Networks Inc. than meets the eye. The company has changed CEOs, added a board member, and is scrambling to get out of the telecom market.

Yesterday, Light Reading reported that telecom chip maker Santel had shut down temporarily because of funding issues. The company did indeed shut down for two weeks. But its new CEO, Sid Agrawal, says the closure wasn't for financial reasons but rather so that it could start afresh and chase a different market.

"We're redirecting our engineering resources to an adjacent space, which we will announce soon," Agrawal says. He says Santel is aiming for the enterprise market but won't get any more specific for the time being.

Santel reopened Monday after having been closed for two weeks. Agrawal took the helm on June 10, replacing Stefan Braken-Guelke (see Santel Appoints CEO). The company was founded back in 2000, and its only announced funding round of $25 million came in January 2001.

Agrawal was previously the founder and CEO of Zambeel, a storage startup that raised $66 million from A-List investors, but ultimately couldn't sell its systems fast enough to stay in business (see Zambeel Znuffed Out, SAN Startups on the Block, and 30 Zambeelians Get Pink Slips).Prior to his storage stint, Agrawal was the CEO and founder of Layer Five, which Juniper Networks Inc. (Nasdaq: JNPR) acquired in 1998. Presumably through Agrawal's Juniper connection, Lloyd Carney, executive VP at Juniper, has recently joined Santel's board of directors.

Santel has had a choppy history, but Agarwal says he's working to right the ship. The company was building a dispersion compensator that used electronics to correct polarization mode dispersion at 10 Gbit/s. However, the company met with hardware problems and increasing competition and eventually decided the telecom market wasn't the place to be (see Santel Undeterred by Chip Glitch and Dispersion Battles Continue).

"We have plenty of funding left to pursue this new space," Agarwal says.

Phil Harvey, Senior Editor, Light Reading