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Managing Editor

Hammerhead swims out of stealth

Jan 26, 20042 mins
Data CenterFinancial Services Industry

Hammerhead Systems, a start-up targeting the Layer 2 multiservice edge, this week said it landed $25 million in Series B financing, bringing its total funding to $43 million since its founding in January 2002.

New investor Pequot Ventures led the round, and Pequot General Partner Greg Rossmann joined Hammerhead’s board of directors. All of Hammerhead’s first round venture firms participated in the Series B round, including Mayfield, Foundation Capital, and Enterprise Partners.

Hammerhead, which has been in stealth mode up to now, also said its Layer 2 edge switches are in trials with an RBOC and a “leading U.S.-based network service provider.” The company would not disclose the identity of these carriers, but sources say they are BellSouth and AT&T, respectively.

A Hammerhead spokeswoman would neither confirm nor deny that information.

Hammerhead’s switches are intended to help service providers manage the transition of their legacy – but revenue-rich – data services from an ATM core to an MPLS core. The company, like start-ups WaveSmith Networks and Gotham Networks before it, is targeting the $20 billion frame relay and ATM market, and the blossoming Ethernet opportunity.

WaveSmith was acquired by Ciena after landing a deal at SBC and showing promise in Verizon’s next-generation Layer 2 multiservice edge trials. Gotham went out of business.

WaveSmith/Ciena and Hammerhead are addressing a market need opened up by incumbent vendors Lucent, Nortel and Alcatel: a slower-than-expected migration away from frame and ATM to IP and MPLS, as carriers continue to feed the cash cow while nurturing its heir. While start-ups are more nimble and agile in developing this cutting-edge migration technology, they do not have the long-term track records with which to win business with carriers.

As a result, they are looking to forge partnerships with the incumbents, and Hammerhead is no different. Hammerhead officials would not say who they are in discussion with, but Lucent is the market leading in frame/ATM switching and thus has the largest void to fill. Also, Hammerhead’s CEO is a former Lucent executive responsible for the company’s Access operations.

So, speculation is rife that Lucent and Hammerhead may become very close. Lucent was developing a “WaveSmith killer” before financial challenges and a relationship with Juniper scotched the project.  Hammerhead officials say they now possess the WaveSmith killer because their switches are optimized for the frame relay opportunity, while WaveSmith’s are targeted predominantly at ATM-based DSL aggregation.

by Jim Duffy
Managing Editor

Jim Duffy has been covering technology for over 28 years, 23 at Network World. He covers enterprise networking infrastructure, including routers and switches. He also writes The Cisco Connection blog and can be reached on Twitter @Jim_Duffy and at

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