Mr. Aiello: Infrax is an infrastructure software company. We provide a fiber optic management operational support system software package that allows companies to manage fiber optic assets, both at the physical and logical layer, track their inventory and provision their circuits. One of its primary functions is fault isolation and fault detection - the ability to find a fiber break or fiber fault within five feet of the actual occurrence, using GIS mapping coordinates. Infrax's primary function has been in the fiber optic space but has been gradually migrating to other infrastructure technologies to provide those similar support services for wireless capabilities, for Wi-Fi, WiMAX, and then most recently for power line communications formats as well.
TWST: Give us an idea of what the market is, as you're looking at it today.
Mr. Aiello: The fiber optic marketplace had been somewhat stagnant. After the tech bubble burst, deployments of fiber had declined steadily. However, over the last several years, there have been both mandated activities and business activities that have caused a resurgence of the deployment of fiber optic communications, primarily in the energy and utility sectors, with the emerging smart grid and all of the federal funding that has gone towards the creation of an intelligent grid. Two or three years ago, the overall market was in the hundreds of millions of dollars for fiber optic software on a global basis, but that number has magnified itself probably a hundred-fold just in the last several years with the deployments of fiber in the utility space. Additionally, as the energy companies and the electric utilities have been deploying fiber further out to the edge, many of them have strong ties to the municipalities they serve. So the municipal governments have also taken this opportunity to deploy significant amounts of fiber optic cable to manage their municipal networks and to provide additional services to their citizens. We've seen the marketplace go from fairly stagnant to very high growth in a short period of time. Over the last six months, we have started to modify our software to provide the same types of infrastructure services to other means of communications because of deployments of AMI, or advanced metering infrastructure. What is critical to the smart grid is the ability to have two-way communications in a secure fashion, which fiber optics will provide. As a company, we've shifted ourselves from a one-product focus to a multiple-product organization. We've been very heavily focused on the smart grid energy sector, which is estimated over the next five or 10 years to be a $10-plus trillion marketplace globally. Communications infrastructure software and components represents a significant chunk of that market, upwards of 10% of capital spend right now. So our focus has been to keep ahead of that curve and migrate in front of those technologies as they're being deployed.
Tickers included in this excerpt: IFXY
For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.