Making headway in the U.S.

* Exinda Networks’ chief executive talks about U.S. expansion and unified performance management

The WAN optimization market is heating up, and venture capitalists are taking notice. The latest is OpenView Venture Partners, which just led Exinda Networks’ first infusion of outside funding -- a $6 million round announced this week.

As the funding news broke, I caught up with Exinda Networks’ CEO Con Nikolouzakis, who talked about the company’s growth plans and how its “unified performance management” message is resonating with customers and prospects. Read on to hear some of what Nikolouzakis had to say.

NW: What led the company to accept venture funding?

Nikolouzakis: What we’ve seen in our company the last three quarters or so is high growth -- growth that has exceeded our expectations. That to us signaled that the demand for our products outstrips the supply. So we started looking at how we could scale our business and take advantage of that opportunity. It’s the first time we’ve ever really needed to raise funds. We’re a profitable company, and we only really needed to raise $6 million for this particular task that we’re undertaking… [OpenView Venture Partners] made contact with us in the later part of 2006… We were just starting to really think about going and raising some funds, so their timing was impeccable.

NW: What are your plans for the $6 million?

Nikolouzakis: Today we have an office in Boston, and we’re looking at establishing another office on the west coast. We’re also significantly increasing our staff, starting with our sales-oriented staff in Boston.

NW: Exinda got its start in Australia?

Nikolouzakis: We originated as an Australian company. We’re now a U.S. company and our Australian entity is our R&D center and a subsidiary of the U.S. company… The trick of the game for us, and where we’re really focusing right now, is becoming as efficient as possible. We understand that we have got some catch-up to do. We’re a relatively new player in the U.S. market. We’ve been strong in Europe and Asia, but the focus really now is to grow in the U.S.

NW: Late last year Exinda started talking about unified performance management. Can you explain that?

Nikolouzakis: It’s really about our ability to have integrated all components of unified performance management into our product. There are four key areas for that: Application visibility, application response measurement, WAN optimization, and application acceleration. We can deliver it at price point that becomes affordable and allows this technology to be acquired by companies that can’t afford the more expensive solutions or those that might have many branch offices and don’t want to spend $5,000 or $6,000 at each branch. With our solution they can spend $2,500.

NW: How is the concept resonating with customers?

Nikolouzakis: The UPM pitch has been very successful. People have been able to look at the security space, with unified threat management, or UTM, and see the relationship very quickly. UPM is similar to UTM, except it’s not security, it’s acceleration. But the unified concept is the same. It just makes sense: The fewer boxes you have in the branch office the better. It’s not just about the capital purchase, it’s about the ongoing management costs and the infrastructure costs.

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