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Castle targets migration from voice

The networking start-up is hoping it can ride the hype surrounding the convergence of networks all the way to the bank.

Networking start-up Castle Networks is hoping it can ride the hype surrounding the so-called convergence of networks all the way to the bank.

The company believes it can provide a more cost-effective combination of hardware and software to regional carriers hoping to make a market out of providing voice and data networking services in second-tier markets.

Castle is betting that small carriers will want an alternative to multimillion telephone switches provided by Lucent Technologies and Nortel Networks in certain segments of their layouts, distributing functions associated with these huge "class five" switches with their own equipment.

The start-up is the latest firm to include talent formerly of Cascade Communications, now a part of Ascend Communications. Others in the organization, now more than 50 people, hail from both the voice and data equipment worlds--a combination of "Packet-heads" and "Bell-heads," according to Tom Burkardt, president and chief executive.

Castle is hoping to take advantage of an emerging shift in how networks are built, a trend dubbed "convergence" that refers to the manner in which voice and data traffic is treated on a network. Due to the low cost of data traffic as compared to voice fees, carriers and service providers are increasingly looking to offer services over a data scheme, offloading over-burdened circuit switches built for the voice world.

Castle, which was founded in November of 1997, plans to unveil its system--what it calls a Services Mediation Switch--in the first quarter of next year for testing, with hopes that the equipment will generate revenue by the middle of next year.

Castle's technology aspires to be a "generic" engine that can exist in the voice and data worlds, combining a set of software that can access a variety of older databases for voice records with new functions allowing similar services to be offered across a data layout based on the Internet Protocol, or IP, and asynchronous transfer mode (ATM).

"It's a perfect transition box--no one's making anything like this," said Deb Mielke, analyst with Treillage Networking Strategies, a McKinney, Texas-based technology consultant. "I think they've got something very hot."

Castle also disclosed it has completed a second round of financing bringing the total investment in the embryonic firm to $18 million. Among the institutions filling Castle's coffers are Atlas Venture, Bessemer Venture Partners, St. Paul Venture, and Venrock Associates.