The 2006 10 Start-ups To Watch

With cool technologies and growing business opportunities, these start-ups may one day be eligible for the NW200.

Who’s using the product?

Fidelity Investments is piloting SessonSuite as a platform for supporting remote offices with IP telephony, and for tying together legacy voice gear and Centrex services with a converged applications layer.

How did the company get its name?

Blue note is a common term in jazz, of which Burkardt and Brian Silver, CTO, are aficionados.

— Phil Hochmuth

CenterisBellevue, Wash.

What does the company offer?

Likewise, a server management software product that enables systems administrators to manage Linux machines as they would Windows servers. Centeris also sponsors the Likewise Open Agent, an open source software application that enables Linux server administration from the Microsoft Management Console.

Why is it worth watching?

Centeris couples a much-needed technology with open source. While Windows operating systems continue to dominate the market, Linux is gaining ground. Systems administrators will want to minimize the effort needed to manage multiple machines across their heterogeneous environments. Likewise couples integration tools with management features so administrators experienced in Windows can easily manage Linux machines with the same tools.

Likewise 1.0 has several components. A systems administrator installs Likewise Console on Windows machines and remotely installs Likewise Agent on Linux servers. The administrator then can use Likewise Console to configure Linux server roles and join them to Microsoft’s Active Directory. Then the administrator can manage and monitor Linux servers through Likewise Console and Microsoft Management Console.

Currently the software works in a one-to-one manner, meaning one license of Likewise can manage one Linux box. The company plans to evolve the software to support a one-to-many architecture, in which multiple Linux machines could be supported through Likewise, but has not specified a target delivery date.

How did the company get its start?

Centeris was founded in September 2004 by two former Keynote Systems executives – Brian Moran and Chuck Mount – and a former Microsoft executive, Manny Vellon. The three, who now serve as chief architect, vice president of marketing and vice president of product development, respectively, were joined early on by Gerald Carter, a well-known open source developer; Barry Crist, who last ran Mercury Interactive’s Application Management group for the Americas; and Krishna Ganugapati, formerly a Microsoft Active Directory architect.

Who’s leading the company?

Barry Crist, as CEO.

How much funding does it have?

$16.5 million, including a $11.5 million second round closed in March. Primary investors include Ignition Partners, Intel Capital and Trinity Ventures.

Who’s using the product?

A free Likewise version has been downloaded by about 1,000 potential customers since the fall of 2005, Centeris says. Enterprise customers include Eastern Financial Florida Credit Union.

How did the company get its name?

Centeris represents how the company wants its software to be perceived, which is as the tool sitting in the center of the Windows and Linux systems management worlds.

— Denise Dubie

ConSentry NetworksMilpitas, Calif.

What does the company offer?

Network access control, via its Secure LAN Controller appliance for enforcing network access policies and shutting down connections that appear to be the work of malware. It also allows for real-time monitoring of what each user is doing on the network.

Why is it worth watching?

While network access control is getting higher on security wish lists, enterprises are looking for ways to implement the technology without disrupting their networks and committing to major investments. ConSentry’s gear is an add-on to existing networks that requires no upgrades and immediately supports network access control. The platform has custom processors that limit to negligible levels the delay caused by the screening it performs.

How did the company get its start?

The company was launched in August 2003 by entrepreneurs Tom Barsi, co-founder of Vina Technologies; Mario Nemirovski, founder of XtreamLogic; and Jeff Prince, founder of Foundry Networks. They wanted to address the growing malware problem, as well as to protect networks from authorized users attempting malicious behavior. Barsi brings expertise in marketing and business development, while Nemirovski’s strength is in software engineering and Prince’s in hardware engineering.

Who’s leading the company?

Tom Barsi, as CEO.

How much funding does it have?

$31 million, including a $17 million third round closed in July 2005. Investors include Accel Partners, Invesco Private Capital and Sequoia Capital.

Who’s using the product?

BT Radianz, Continental Airlines and Las Vegas Review-Journal.

How did the company get its name?

By blending the first syllables of the words “control” and “sentry,” the founders hoped to reflect the real-time control and inspection of network traffic.

— Tim Greene

Copan SystemsLongmont, Colo.

What does the company offer?

The Revolution 220T, 220TX and 220A virtual tape library and archiving appliances, which use a technology called Massive Array of Idle Disks (MAID). With MAID, disk drives can be powered up individually or in groups, as needed. Because the disks remain powered off until an application requests the data, the power-on duty cycle for each disk is reduced, thereby increasing the service life of the drives.

Why is it worth watching?

Copan is marketing a unique technology and making a good value proposition of it. Because disks are spun only when data is needed, the cost of disks and the amount of power consumed by the Revolution array is close to that of tape. The company has gained use by a number of high-profile customers and gathered a good amount of venture capital to fund its operations. It has a few competitors, among them FileTek, which archives fixed content data, and Asaca and Exavio, both of which focus on digital prepress, broadcast and postproduction markets.

How did the company get its start?

Four seasoned storage and technology executives – Aloke Guha, Will Layton, Chris Santilli and Eric Sumpter – founded the company in March 2002 with the belief that at the right price point and with the ability to extend drive reliability, disk-based storage could replace traditional tape systems. As they formulated plans, disk-drive capacities were increasing and the cost per gigabyte falling. With these market conditions, they were able to a hit a tape price point for their disk-based system. Guha, most recently founder and CEO of Datavail (now CreekPath Systems) serves as CTO; Layton, most recently entrepreneur in residence with Austin Ventures, is vice president of sales development; Santilli, formerly a storage system design engineer at Compaq and StorageTek, is chief architect; Sumpter, most recently founder and CEO of RLX Technologies (now HP), is COO and vice president of manufacturing.

Who’s leading the company?

CEO Mark Ward, most recently principal of Ward Capital. Ward has held executive positions with EMC and StorageTek.

How much funding does it have?

$56.5 million, including a $17.5 million third round closed in March. Investors are Austin Ventures, Credit Suisse, Globespan Capital, Horizon Technology Finance, Pequot Ventures and Pinnacle Ventures.

How did the company get its name?

Derived from Copan, the largest known Mayan-era archeological site in Honduras. At Copan, archeologists found a large quantity of undamaged artifacts, which yielded massive amounts of information about this ancient civilization. Copan Systems’ intent is to provide an array that lets users archive and retain information undamaged for long periods of time.

Elemental SecuritySan Mateo, Calif.

What does the company offer?

Elemental Security Platform (ESP), a policy-based application aimed at integrating traditionally discrete areas such as network access control, configuration management and compliance management.

Why is it worth watching?

Elemental Security is on a course to unify compliance requirements and system security. Its ESP combines traditional security features with policy-based computing – which is associated more often with user activity than with monitoring gear. With ESP, companies can use a single application to define policies, monitor hardware and users for noncompliance with those policies, and take action against unsecured devices.

Driving the platform is Fuel, a scripting language for policy writing developed by the creator of the Python language, Guido van Rossum. Fuel lets users outline security policies using familiar terms that match those used in corporate policy documents. For example, a user could express a policy such as “Only users in the finance department can connect to SAP ERP servers,” and ESP translates that simple phase to something understood by corresponding directory systems, applications and hardware.

ESP relies on agents to monitor devices on a network, and a dashboard keeps tabs on compliance with active security policies.

Elemental’s biggest challenge is the size of its competition, which includes network and security vendors such as Cisco and Symantec, as well as management players such as CA and IBM, which are working to provide similar capabilities in integrated product suites. So far, so good. Since releasing its first product in April 2005, Elemental Security has increased its customer base to more than 30 companies and signed 10 channel partners. The company expects to generate $6 million in sales this year.

How did the company get its start?

Technologist Dan Farmer and executive Dayne Myers co-founded Elemental Security in December 2002 to help corporations more easily implement and monitor policy-based computing. Farmer, who is CTO, co-authored various security tools, including SATAN. Myers, who had been CEO and is now a board member, has a long history in private equity, management consulting and executive management.

Who’s leading the company?

Peter Watkins, former entrepreneur-in-residence at Bessemer Venture Partners, as CEO.

How much funding does it have?

$21 million, including an $11 million third round closed in June 2005 and led by Lehman Brothers Venture Partners.

Who’s using the product?

30-plus customers, including Aegon Insurance, Catholic Health Systems, John Wiley & Sons, Purdue University and Shutterfly.

How did the company get its name?

“Elemental” describes the vendor’s goal of providing a solid foundation and essential building blocks for enterprise security.

Mu SecuritySunnyvale, Calif.

What does the company offer?

The Mu-4000 appliance, which provides protocol-based security analysis for network equipment.

Why is it worth watching?

The Mu-4000 appliance is intended to uncover unknown weaknesses in network devices (though not at the application layer) in a lab environment. As such, it can help vendors catch security flaws before their products ship and provide enterprise customers with a way to find glitches. The Mu-4000 also is capable of comparing products. Since it may uncover a wealth of unknown vulnerabilities, use of the appliance, generally available this month, could spur considerable dialogue on protocol-based security. A danger is that the Mu appliance might be used by attackers, giving them insight into new ways to subvert security.

How did the company get its start?

Having identified the need for better tools to discover vulnerabilities in network equipment, security entrepreneurs Kowsik Guruswamy and Ajit Sancheti launched the company in March 2005 after the previous company they worked at, OneSecure, was acquired by NetScreen (now Juniper). Guruswamy, who is CTO, and Sancheti, who is CEO, came up with a technique they call “protocol spidering” to allow in-depth probing.

Who’s leading the company?

Ajit Sancheti

How much funding does it have?

$4 million, from Accel Partners and Benchmark Capital, in one round closed in January.

Who’s using the product?

Undisclosed vendors and large enterprises, including government agencies

How did the company get its name?

“Mu” is said to stand for “mutate the protocols” because the security-analysis appliance bombards a target device with hundreds of thousands of attacks that simulate how hackers could manipulate routing, authentication, FTP, HTTP and other protocols to gain access to or bring down a network device.

NeoPath NetworksMountain View, Calif.

What does it offer?

The NeoPath File Director, an appliance that consolidates file systems residing on distributed file servers and network-attached storage devices into a virtual environment that can be managed from a single console.

Why is it worth watching?

The ability to aggregate file storage for better utilization, provisioning or migration is in high demand. NeoPath is representative of a number of companies that aim to provide this functionality, including 1Vision, Acopia, Attune Systems, NuView (recently acquired by Brocade) and Rainfinity (acquired by EMC). Like others, NeoPath’s appliance manages unstructured data, an area that the Enterprise Strategy Group says comprises more than half the data on networks.

How did the company get its start?

It was founded in April 2002 by former Ingrian Systems executives and engineers who came up with the idea while trying to manage the accumulation of files across computers on their home networks. Founders are Rajeev Chawla, executive vice president products; Anand Iyengar, CTO; Panagiotis Tsirigotis, vice president and chief software architect; and Thomas Wong, vice president of engineering.

Who’s leading the company?

CEO Alan Baratz, who was the first president of Sun’s Software Products and Platforms (JavaSoft) division.

How much funding does it have?

$18 million, including $12 million second round closed in September 2004. Investors include August Capital, DCM-Doll Capital Management and Gabriel Venture Partners.

Who’s using the product?

Ball Aerospace & Technologies and Ubicom, among others.

How did the company get its name?

Named for providing a new (neo) path to information.

— Deni Connor

Reva SystemsChelmsford, Mass.

What does it offer?

The Reva Tag Acquisition Processor, a rack-mounted network appliance and Java software to manage large numbers of RFID readers, capture and process lots of data from RFID tags, and push this data into line-of-business applications.

Why is it worth watching?

Reva’s product gives a system-wide view of an entire RFID network, collecting not only tag data but also data about the behavior of the readers and the state of the radio waves. The software can adjust the radios, bring readers online or offline, assess data quality continuously, and pinpoint problems and their locations. A variety of APIs link Reva to back-end databases, messaging services and enterprise applications. Cisco validated Reva’s approach last fall when it unveiled a Catalyst 6500 blade featuring an embedded version of RFID middleware from ConnecTerra (now BEA Systems). In this rival infrastructure, the blade filters raw RFID traffic at the network edge and passes it to the data center and on to applications.

How did the company get its start?

It was founded in April 2004 by Ashley Stephenson and Dave Husak, with backgrounds, respectively, in high-speed Internet access equipment and network processor design. Looking at the RFID market, they concluded that what customers would need to make large-scale deployments possible was an RFID infrastructure that would integrate with existing enterprise nets and applications.

Who’s leading the company?

CEO Ashley Stephenson, who also founded Xedia, a maker of high-speed Internet access equipment acquired by Lucent in 1999.

How much funding does it have?

$6.5 million, raised in a first round that closed April 2004. Currently raising a second round, with $10 million pledged so far; lead investors are Charles River Ventures and North Bridge Venture Partners.

Who’s using the product?

Accenture and HP are publicly announced customers, though Reva says several others also have installed the appliance and software in production mode.

How did the company get its name?

One of the first employees suggested Reva, which is a Sanskrit word meaning “new beginning,” as well as the name of a river in his native India. It met co-founder Husak’s non-negotiable criteria: two syllables and an available Internet domain name.

– John Cox

Silver Peak SystemsMountain View, Calif.

What does it offer?

The NX Series of network acceleration appliances.

Why is it worth watching?

Silver Peak offers an alternative to traditional WAN optimization and application acceleration technologies while reducing the need for dedicated servers and storage at branch locations. The NX Series appliances install in the data center and all branch offices with no changes to clients, servers or applications. They communicate with each other over the IP layer.

Within each appliance, Network Memory technology inspects all inbound and outbound WAN traffic – be it from TCP or UDP, interactive or transactional, or real-time or streamed applications – and stores a local instance of the data in memory on each appliance. The appliances then compare real-time traffic streams with stored patterns. If a match exists, Network Memory sends a short reference pointer to the appropriate remote NX appliances and instructs those devices to deliver the traffic pattern from the local instance. The client application is irrelevant; employees at one branch office might download a CEO presentation off the corporate Web servers while employees at another location get the presentation via e-mail. The data will still come from the same local instance. If content is modified, the appliance detects the change at the byte level and updates the memory. Only the modifications get sent across the network; the local appliance combines the modifications with the original content. The appliances come in three versions. The largest provides 2TB of local storage and support for as much as 155Mbps WAN bandwidth, and the smallest provides 500GB of local storage and support for 10Mbps of WAN bandwidth.

How did the company get its start?

Founder David Hughes, who has held senior architect positions at Cisco, Nortel and a variety of other network vendors, conceived an idea for a next-generation WAN optimization and application acceleration appliance while working as an executive in residence at Benchmark Capital. In June 2004, he founded the company and took on the CTO role to develop a product that would take a network-layer, application-independent approach to reducing the amount of data needing to traverse the WAN.

Who’s leading the company:

CEO Rick Tinsley, who co-founded Turnstone Systems in 1998 and served as its CEO for six years.

How much funding does it have?

$21.5 million, including a $13 million second round that closed in January. Benchmark Capital, Duff Ackerman & Goodrich, Greylock Partners and Pinnacle Ventures provide funding.

Who’s using the product?

The company says 150 enterprises, across a range of industries, are in varying stages of product evaluation, testing and deployment. Construction firm Quality Built is one publicly named customer.

— Beth Schultz

TelloSan Mateo, Calif.

What does the company offer?

Tello Basic and Tello Enterprise, for instant communications and collaboration between networks, applications and devices. The Basic service is for individual users, while the Enterprise version is for corporatewide deployment.

Why is it worth watching?

Tello is upping the collaborative ante by offering users a tool that ties together disparate real-time communications applications. Whether it is using AOL’s Instant Messenger or Sprint’s ReadyLink push-to-talk application, Tello customers will know which business partners are available and can communicate with them using the company’s service.

How did the company get its start?

Tello was founded in late 2004 by wireless pioneer Craig McCaw, VoIP visionary Jeff Pulver, John Scully of Apple fame, and Michael Price, senior managing director at investment firm Evercore Partners.

Who’s leading the company?

Doug Renert, in his first gig as CEO. He comes to Tello from an eight-year stint at Oracle, where he most recently was vice president of applications development.

How much fund

TelloSan Mateo, Calif.

What does the company offer?

Tello Basic and Tello Enterprise, for instant communications and collaboration between networks, applications and devices. The Basic service is for individual users, while the Enterprise version is for corporatewide deployment.

Why is it worth watching?

Tello is upping the collaborative ante by offering users a tool that ties together disparate real-time communications applications. Whether it is using AOL’s Instant Messenger or Sprint’s ReadyLink push-to-talk application, Tello customers will know which business partners are available and can communicate with them using the company’s service.

How did the company get its start?

Tello was founded in late 2004 by wireless pioneer Craig McCaw, VoIP visionary Jeff Pulver, John Scully of Apple fame, and Michael Price, senior managing director at investment firm Evercore Partners.

Who’s leading the company?

Doug Renert, in his first gig as CEO. He comes to Tello from an eight-year stint at Oracle, where he most recently was vice president of applications development.

How much funding does it have?

$5 million in one round, closed in April 2005, by Eagle River, Evercore Ventures, Intel Capital and Rho Ventures.

Who’s using the services?

Tello has no enterprise customer names to share at this time.

How did the company get its name?

Co-founder John Scully came up with the word “Tello” by joining the word “telecommunications” with the greeting “hello” creating a logical name for a real-time communications company, he believes.