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Narus Nails $30M for DPI

Ray Le Maistre
10/31/2006
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Software-based deep packet inspection (DPI) specialist Narus Inc. has raised $20 million in new funding and secured a $10 million credit line as it seeks to capitalize on the increasing demand for IP traffic management systems. (See Narus Secures $30M.)

The new cash round is led by American Capital Strategies Ltd. and includes existing VC backers such as Mayfield , JPMorgan Partners , and NeoCarta Ventures Inc. . The new round takes Narus's funding to more than $100 million. (See Narus Scores $15M, Names CEO.)

The vendor says the money will be used to develop the next versions of its NarusInsight IP traffic inspection products and to expand its global sales channels as the market for DPI grows.

And according to a recent Light Reading Insider report, "Deep Packet Inspection: Taming the P2P Traffic Beast," the market is set for major growth in the coming years. The report's author, research analyst James Crawshaw, estimates that carriers will spend more than $580 million on DPI technology in 2010, compared with less than $100 million in 2005. (See Insider: P2P Drives Use of DPI.)

Narus's products -– software that runs on standard server hardware that is positioned in multiple locations around a network -- enable carriers to identify IP traffic, detect and protect against security threats and network attacks, and facilitate lawful intercept of IP traffic. The company says it has more than 20 carrier customers, including AT&T Inc. (NYSE: T), China Telecom Corp. Ltd. (NYSE: CHA), Orange (NYSE: FTE), KT Corp. , KPN Telecom NV (NYSE: KPN), and T-Mobile US Inc. . (See Narus Unveils New Software, Narus Unveils VOIP Analyzer, and KT Secures With Narus.)

Narus is probably the least well known of the deep packet inspection vendors, which include Allot Communications Ltd. (Nasdaq: ALLT), CacheLogic , Ellacoya Networks Inc. , Sandvine Inc. (London: SAND; Toronto: SVC), and Cisco Systems Inc. (Nasdaq: CSCO) -- courtesy of its P-Cube acquisition. (See Cisco Plucks P-Cube for $200M and Deep-Packet Offerings Proliferate.)

But as Crawshaw points out in his report, "Narus offers a different kind of solution that enables a broader overview of network traffic and actually works along with other DPI specialists, such as Allot and Cisco's Service Control Engine (SCE)." (See Insider: P2P Drives Use of DPI.)

That's because the focus of Narus's software-based solution has been on "correlating information from hundreds of high-speed analyzers in a central logic server to monitor anomalous traffic and security threats and measure QOS."

That approach comes from Narus's previous focus as an IP mediation specialist, collating network information for billing and revenue assurance purposes. (See Narus Compartmentalizes OSS.)

As a result, Narus is often deployed alongside other DPI vendors to collate network-wide information that can then be acted on by hardware-based traffic managers and media controllers. It counts Caspian and Cisco as partners and also has a close relationship with Juniper Networks Inc. (NYSE: JNPR).

Narus's technology can also be used to block particular services, including VOIP. For example, the Shanghai Telecom subsidiary of China Telecom is using the vendor's VOIP Discovery application module to "detect and mitigate rogue VOIP traffic on their network, enhancing the quality of experience for the users of properly configured and authorized VOIP services."

Narus said in April of this year that its technology is being used by the carrier to detect VOIP traffic to determine whether it is authorized on the network. If the VOIP traffic is unauthorized, NarusInsight alerts the system to take action and block the traffic.

Narus said at the time that the carrier was not using the product to block Skype Ltd. traffic, despite suggestions to the contrary.

— Ray Le Maistre, International News Editor, Light Reading

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