Taking on Cisco Systems (CSCO)
is no easy task, and once proud start-up Ipsilon Networks
may be feeling the
strain of such an undertaking.
The company that once framed the debate on ways to send traffic based on
IP--the network transport protocol for the Net--to its destination was
plucked today by Finnish mobile telephone giant Nokia for $120 million.
As recently as May, Ipsilon insisted its plan was to take the company public and build it up
through high demand for IP-based networking equipment.
Such is the life for a combative start-up hell-bent on taking on the
800-pound Gorilla of networking, according to industry pundits.
"I think Ipsilon, in a sense, caused their own demise--so religious,"
Craig Johnson, an analyst with Dataquest, said. "I don't think any start-up
has targeted Cisco and won."
Now the company faces an uncertain future as the data networking cog in
Nokia's vast telecommunications holdings. Nokia has held a minority
interest in Ipsilon since June.
Nokia said its intention in purchasing Ipsilon is to expand
the company's role in the booming American data networking market.
Sunnyvale, California-based Ipsilon's more than 100 employees will be
subsumed into the telecommunications arm of the Finnish company.
Ipsilon's president and chief executive, Brian NeSmith, will continue to oversee the
Ipsilon side of Nokia's business. The company will remain in its Sunnyvale
John Carosella, Ipsilon's vice president of marketing and business
development, said the company saw an opportunity to expand into the
wireless data networking space and could not pass on the chance to
take advantage of Nokia's multibillion-dollar backing. "Sometimes you can keep
your blinds on and go after the same old, same old," he said.
With the word "convergence" on the tips of many tongues in the networking
industry, Nokia's play for a broader role in the data networking market--and
the accompanying marketing muscle of an $8.5 billion firm--could be a
boon to Ipsilon's IP-over ATM (asynchronous transfer mode) line of
But the anti-Cisco bluster of Ipsilon's past may largely be silenced as the
remaining members of the company's engineering team grow more and more
comfortable within the corporate structure of Nokia.
Ipsilon executives admitted the days of Cisco bashing are over. "I think we
will continue to push innovation in the space," Carosella said. "I don't
think we'll be taking an adversarial role with Cisco.
"In the end, customers didn't want that from us anyway. They wanted us to
solve their problems," he added.
Cisco was forced to respond to the IP-based switching craze, developing a
next-generation router for high-end service provider accounts that appeared
this spring and floating a concept called "Tag Switching" last fall that is
currently being debated within the Internet
Engineering Task Force.
Now Cisco may have the last laugh.