& cplSiteName &

Ellacoya Finds Deep Packets Up North

Light Reading
News Analysis
Light Reading
7/18/2005
50%
50%

Broadband traffic management company Ellacoya Networks Inc. knows how to pick its friends. The Merrimack, New Hampshire-based company is on the business end of a $13.5 million round of new funding led by BCE Capital, an affiliate of Bell Canada (NYSE/Toronto: BCE).

“The reason we like those folks,” says Ellacoya CEO Jerry Wesel, “is because of their contacts and their operational experience both on the equipment side and on the service provider side, not to mention the relationship that Bell Canada has with other carriers around the world that we can leverage pretty easily.”

Is the investment a sign that Ellacoya’s deep packet inspection devices are already in, or headed for deployment in, Bell Canada’s networks? (See Bell Canada Reports Q3.)

“Bell Canada is now actively looking at this technology,” says BCE Capital managing director David McCarthy, adding he's unable to provide more detail. “Venture capitalists, unfortunately, get to hear a lot more due diligence [information] than you journalists do,” he explains.

McCarthy says the engineers at Bell Canada had a voice in BCE’s decision to sign the multi-million-dollar check to Ellacoya.

“Of course we always have that dialogue,” McCarthy says. “Of course I can’t tell you exactly what they said, but, as a standard part of our relationship with Bell Canada, we do include them in the process; we solicit their feedback.” Of course.

“We do operate independently of Bell Canada and tend to invest in things that are a little bit out in front of where Bell Canada currently is,” McCarthy says (see Nortel, Bell Canada Research Rural Divide).

If it’s not a slam dunk at Bell Canada, then what exactly is the draw for the VCs? Ellacoya says it’s now “getting traction” with Tier 1 carriers after 6 years of existence (see Ellacoya Lands Korean Deal). The company has already announced wins at Shaw Communications Inc. in Canada and @NetHome in Japan (see Ellacoya Sees Deep Packets at Shaw).

But an in at Bell Canada would do much for the company’s prospects, and perhaps the patience of its investors -- especially Lightspeed Venture Partners, which has stuck it out since 1999 (see New Startup: Ellacoya). (Disclosure: Lightspeed is an investor in Light Reading).

The other three original investors have since gotten out. They are: Bessemer Venture Partners, Centennial Ventures Inc., and Goldman Sachs & Co.

Atlas Venture and Flagship Ventures joined Lightspeed as investors in 2003 (and did a restructuring of the company). (See Is Ellacoya on the Comeback Trail?.) The three did another $7 million round last summer, Wesel says (see Ellacoya Snares $7M).

This latest round of funding, Ellacoya’s fifth, also includes money from new investor Canaan Partners.

Presidio Venture Partners LLC and Sumitomo Corp. have also invested at some point along the way, according to the Ellacoya Website. By Light Reading's calculation, Ellacoya has gone to the well for around $132 million to date.

Wesel and McCarthy are confident that a payday is on the horizon. Wesel says Ellacoya now has several unannounced wins with Tier 1 carriers, and is currently trialing and testing with multiple others. Ellacoya’s 2004 revenues tripled over its 2003 numbers and continue apace for 2005, Wesel says, but declines to give specific numbers. And Ellacoya's product, Wesel points out, now has six years and $100 million of development behind it.

Ellacoya sells a traffic management hardware and software “kit” that broadband providers use to differentiate between various types of packet traffic running over their networks. With that information providers can set up tiers of service or bandwidth usage caps, or reserve bandwidth for applications (like gaming) that require real-time user interactivity.

Ellacoya began by offering a suite of broadband service delivery products, but hit hard times after the boom years and has since focused its products on IP traffic shaping and control (see Ellacoya Cuts Staff -- Again). The company’s portfolio currently includes the e30 switch for large carriers and the smaller 4000 series switch for smaller operators (see Ellacoya Tweaks Service Control).

Wesel says cable companies were the first to adopt Ellacoya’s solution, and they still comprise about two thirds of the company’s 75 customers (see Ellacoya Demos Cable VOIP Stuff). The cable companies, however, will contribute only about half of Ellacoya’s revenues this year.

Ellacoya’s headcount is now “just north of 72,” Wesel says, but that the new investment money will pay for "significant hiring" of engineering and sales and marketing staff.

— Mark Sullivan, Reporter, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
CenturyLink: Let's Get Past SD-WAN Hype

6|23|17   |   04:02   |   (0) comments


Technology becomes a "shiny object" unless it's properly focused on solving business needs for enterprise customers, says Bill Grubbs, network solutions architect for CenturyLink. He explains to Light Reading why SD-WAN deployments have to be tailored to specific needs – and more.
Women in Comms Introduction Videos
Infinera's Sales Director Paints Tech's Big Picture

6|21|17   |   4:14   |   (1) comment


Shannon Williams, Infinera's director of sales, shares how she achieves work's many balancing acts -- between her role and the broader company, today and tomorrow's tech and more.
LRTV Custom TV
SD-WAN Innovation & Trends

6|20|17   |     |   (0) comments


Versa CEO Kelly Ahuja discusses with Carol Wilson the current status and trends in the SD-WAN market, Versa's innovation around building a software platform with broad contextualization, and the advantages that startups can bring to the SD-WAN market.
LRTV Interviews
Ovum's Dario Talmesio on 5G in Europe

6|20|17   |   02:16   |   (0) comments


At 5G World 2017, Dario Talmesio, principal analyst and practice leader on Ovum's fixed and mobile telecoms European team, explains the emerging trends amongst European operators as they prepare for 5G.
LRTV Custom TV
Putting Power on a Pedestal

6|19|17   |     |   (0) comments


ARRIS's John Ulm says a major accomplishment of SCTE•ISBE's Energy 2020 program is increased focus on power cost and consumption, including inclusion of energy requirements in operators' RFPs and RFIs.
LRTV Custom TV
Gigabit Access: The Last-Mile Pipe for All Future Services

6|19|17   |     |   (0) comments


A Gigabit access platform being deployed today must be able to deliver all types of services to an increasing number of devices. A non-blocking architecture is necessary to support the ever-increasing growth in bandwidth demand. The Huawei Gigabit access solution is based on a distributed design that is fully scalable to deliver a unprecedented performance.
LRTV Custom TV
Key Factors to Successfully Deploy an SD-WAN Service

6|19|17   |     |   (0) comments


As service providers transition their SD-WAN solution from trials and limited deployments into production at large scale, there are important considerations to successfully operationalize these solutions and realize their full potential, without adding complexity, introducing uncertainty or disrupting current business operations. Sunil Khandekar, CEO and Founder ...
LRTV Custom TV
IoT Solutions: Rational Exuberance

6|19|17   |     |   (0) comments


IoT solutions are morphing from hype into viable business opportunities. Huawei has the platform and ecosystem support to help carriers successfully address new business opportunities in the IoT space.
LRTV Custom TV
Realizing ICN as a Network Slice for Mobile Data Distribution

6|19|17   |     |   (1) comment


Network slicing in 5G allows the potential introduction of new network architectures such as Information-centric Networks (ICN) as a slice, managed over a shared pool of compute, storage and bandwidth resource. Services over an ICN slice can benefit from many architectural features such as Name Based Networking, Security, Multicasting, Multi-homing, Mobility, ...
LRTV Interviews
Ovum's Mike Roberts on 5G Uptake

6|19|17   |   04:08   |   (0) comments


Mike Roberts, research director for Ovum's service provider markets group, explains why he has boosted his 5G subscriptions forecast.
LRTV Interviews
AT&T's Hubbard on Intersection of SD-WAN & MPLS

6|15|17   |     |   (0) comments


Rick Hubbard, SVP of Network Product Management for AT&T Business Solutions, discusses how AT&T's approach to SD-WAN fits in with its overall virtualization strategy, explains how SD-WAN can improve enterprise customers' use of the cloud and addresses the intersection of SD-WAN and MPLS.
Telecom Innovators Video Showcase
Keep Connected IoT Devices Under Control With Allot

6|15|17   |     |   (0) comments


Allot AVP of International Pre-Sales, Daniel Keidar, explains how communications service providers can protect infrastructure and service availability from flooding attacks caused by malfunctioning or bot-infected devices connected to their network.
Upcoming Live Events
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Montcalm Marble Arch
November 1, 2017, The Montcalm Marble Arch
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Netflix's Lesson in Culture Expectation Settings
Sarah Thomas, Director, Women in Comms, 6/21/2017
Kalanick Steps Down as Uber CEO
Sarah Thomas, Director, Women in Comms, 6/21/2017
BT Tech Chief Makes Plea to 5G Chip Vendors
Ray Le Maistre, International Group Editor, 6/20/2017
Buy American: Will It Affect the Telecom Sector?
Dan Jones, Mobile Editor, 6/21/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.