Who better to compete against networking giant Cisco Systems and high-flying Juniper Networks than the man who designed some of their key technologies?
A secretive but well-financed Silicon Valley networking start-up co-founded by a former Cisco and Juniper engineer is creating quite a stir as it quietly builds technology that some sources say could take on the two networking companies.
Procket Networks executives won't comment on the company's plans or when it will ship products. But some sources say the 2-year-old start-up has big potential--and believe it is building next-generation, high-speed routers, which telecommunications service providers need for their networks to handle the explosion of Net traffic. Routers send Net traffic over a network at high speeds.
Cisco and Juniper are the two dominant players in the fast-growing high-end router market, which is expected to reach $2.1 billion in sales this year and $12 billion by 2003, according to market research company RHK. A raft of other networking players have entered or plan to enter the market, including Alcatel, Avici Systems, Lucent Technologies and numerous start-ups, including Caspian Networks.
Procket, which has raised $34 million in venture capital, was co-founded by Tony Li, a former Cisco and Juniper engineer, along with two former Sun Microsystems engineers who designed forthcoming versions of Sun's flagship UltraSparc processors. Its advisory board includes Internet pioneer Vint Cerf and executives from Internet service providers UUNet, Excite@Home and Verio.
But much of the buzz surrounding Procket revolves around Li, who is spearheading the start-up's development efforts.
Li, 39, helped develop the software that runs on all Cisco routers. Then he jumped ship to Juniper in 1996, where he designed the software for the company's high-end router, which has better performance than Cisco's technology. Though routers are often thought of as a hardware technology, it is the software "brains" that run inside the machines that make the devices so useful for network operators.
In just two years, the young Juniper has captured 30 percent of a market that Cisco has historically dominated. Analysts said Cisco is scrambling to make its high-end routers perform as fast as Juniper's and is expected to come out with new products in the coming months.
"Li is a really bright guy," said a source familiar with Procket. "He was very instrumental in getting Juniper's products off the ground. And he was a cornerstone in building Cisco's IOS (Internetworking Operating System) software."
A hint of things to come
While Procket has been mum about its technology, the San Jose, Calif.-based company two weeks ago issued a press release saying it has released a test version of its Internet infrastructure software--and that seven service providers, including Metromedia Fiber Network, are testing the technology. Metromedia could not immediately be reached for comment on its Procket tests.
Network equipment start-ups often test the software that goes into their hardware before designs are completed for the devices they are building. This way the company can know how bulletproof the software code is and can tweak it accordingly.
One source familiar with Procket believes the company is building new high-end optical routers, a niche expected to be hot in the coming years as more telecommunications carriers attempt to get more out of the fiber-optic networks they operate.
Other networking companies, however, say it's too early to tell what, exactly, Procket's business strategy is. Some suggest Procket could be focusing on one element of a routing system, such as a new chip or a new set of software.
"It's too soon to tell if they will be a competitor of ours," said Pete Wexler, Juniper's vice president of engineering and Li's former boss at Juniper. "There's a bunch of rumors flying around and we're not sure exactly what is true."
Wexler said he's heard that Procket may be selling everything from networking software to networking processors. Either way, Wexler said, it's tough to build a high-end router.
"You have to have huge depth in a bunch of areas: really deep silicon expertise, software and protocol expertise, and deep system design expertise," Wexler said. "I have no doubt there are smart people around who can be innovative, but you have to be innovative in all the areas to deliver a product in this space to be competitive."
In Juniper's shoes?
Analysts say the word on the street surrounding Procket is similar to that of Juniper when it was just starting out. In fact, the two companies share two of the same financial backers: New Enterprise Associates and Institutional Venture Partners.
That doesn't necessarily mean Procket will share the same success as Juniper, which had a huge initial public offering and is now a substantial competitive thorn in Cisco's side.
One of Procket's financial backers believes Procket has a great shot at success because of its strong management and engineering team.
"Tony Li is one of the two or three people in the world with the level of routing expertise to build the software that is capable of supporting the Internet," said Stuart Phillips, general partner at U.S. Venture Partners and Li's former boss at Cisco.
Phillips declined to be specific about Procket's product strategy, however.
"They have a fantastic market opportunity and an incredible differentiation with the companies that would vaguely be considered their competitors," he said. "It is appropriate to say they are addressing the network space, but they are very much in stealth mode and have a right to be cautious about what they communicate with people."