Spotlight

The company that created a new category

NetDevices created a new category of unified services gateways in the networking space. Vinutha V says that it will continue to innovate and add new services across customer segments.

Until the late nineties there was no major innovation in the networking space except from a few vendors offering integrated services. Otherwise, everybody joined the race by offering upgraded routers. Moreover, networking companies were hard hit by the economic slowdown around 2000. With this background, nobody was willing to risk innovating. It was left to a team of three networking veterans from Cisco—Seenu Banda, Rob Haragan and Jeff Kidd—to step up to the plate and develop a next-generation networking solution: the services gateway.

During their tenure at Cisco, they had identified certain pain points customers faced. Conventional networking hardware only performs specific functions, and is resource-hungry. Efficient and effective management of those devices turned out to be a major challenge for enterprises. Triggered by this awareness, the team of three established NetDevices in July 2003 in the US to provide a unified services gateway with remote management functionality. Now, by creating a new segment in network management services, NetDevices will compete against the likes of Cisco, Juniper and Enterasys which offer consolidated networking systems in different applications such as security, routing, switching, VPN and VoIP.

Getting funding

Networking was a concern area for VCs. “The dust of the downturn had not settled when we approached them for funding. It was not easy, and our concept was looked at through magnifying lenses. Eventually, the concept of creating a new category by re-defining networking attracted initial funding of $15 million,” recalls Uday Birje, Vice-president, India and ASEAN, NetDevices Networks. Three US-based organisations, ComVentures, Columbia Capital, and Artiman Ventures, and India-based JumpStartUp, put up the $15 million for the first round of funding.

Re-defining the network as a concept attracted VCs and a talented engineering workforce. In less than three years, the company grew from 10 employees to 200 today. Of these, 140 are employed in India. “In our domain, the quality of work is equally distributed in the US and India. Our employees at the Indian development centre work on high-end work of architectural design and inter-operability testing,” states Birje.

NetDevices believed that to be successful it had to bring solutions to the market faster as this would help in seizing opportunities and gaining credibility for the company. Initially, NetDevices involved a few software partners in the development work along with its in-house talents. For a start-up, sufficient manpower during its initial days is tough. However, they outsourced a bit of development work from a few Indian vendors. This move ensured that the company did not lose any time at all in the product development process.

The dust of the downturn had not settled when we approached others for funding. It was not easy, and our concept was looked at through magnifying lenses Uday Birje VP, India & ASEAN NetDevices	Customers identify with the benefits we offer because our solutions are engineered to remove the pain associated with owning and maintaining multiple devices Seenu Banda CEO & president NetDevices

Different models

Says Seenu Banda, CEO and president, NetDevices Inc, “The Indian centres (at Hyderabad and Bangalore) were involved in critical areas including market and product requirements definition, architecture, technology innovation, training, implementation, and hardware and software development. This is a dramatically different model from that of other companies where the Indian centres are normally seen as low-cost offshore developing units and are not part of strategic decision-making.”

Well-received

Managing networks across locations is a major concern for the average enterprise today. SG-8 (Services Gateway-8), the first product from NetDevices, hit the market in July 2005. Since then, the company has won SunGard, Northern Illinois University, Startec and RockNet as its key customers. The SG-8 has enabled these organisations to set up remote office networks, reduce costs, increase productivity and provide a rapid return on investment (RoI). “One of the advantages we have is that customers readily identify with the benefits we offer because our solutions are engineered to remove the pain associated with owning and maintaining multiple devices from different vendors at the network edge, and training people to work with them. Across geographies, customers face universal problems, and therefore the benefits we deliver remain much the same,” explains Banda.

Recently, NetDevices partnered with Astuto Telecom for the distribution of SG-8 in India and the SAARC regions. SG-8 is purpose-built for unifying multiple network services of routing, switching, VPN and firewall. Soon, NetDevices will launch the next version of SG-8 with additional IDS (Intrusion Detection System), IPS (Intrusion Prevention System) and QoS (Quality of Service). A subsequent version will include VoIP and anti-virus functionality. NetDevices is also gearing up to provide solutions to medium-sized businesses with the launch of its SG-4 product. As expected, the solution for medium businesses will be a pared-down version of its SG-8 product as they may not need all the functionality of the latter.

Second round of funding

NetDevices has now received the second round of funding of $25 million from the earlier four investors along with Castile Ventures. This injection will help NetDevices expand its sales offices globally, and help in the development of additional versions of SG-8. India will be a key market for NetDevices, but its focus will be on the US, European markets (Britain, Germany and France) and the south-east Asian region. The immediate focus for NetDevices will be to continue to innovate and continuously add new features to its services gateways. The company will extend its product line to address different customer segments, and offer solutions across the enterprise and service provider markets. By June 2006, NetDevices is targeting revenues of $10 million from India and south-east Asia. By 2008, the business services gateway market is expected to be worth about $16.6 billion according to an In-Stat report. By 2006, NetDevices aims to come out with a new solution, Office-in-Box, which will have networking services along with server functionalities.

vinutha@expresscomputeronline.com