Corona Gets a Boost
First, a bit of background: Corona was founded in 1998 and has raised more than $68 million to date from Merrill Lynch & Co. Inc., New Enterprise Associates (NEA), and others. The company announced its edge routing and IP services platform, the Corona IP Service Platform 12000, in January 2001, but it hasn't announced a customer to date.
In late 2002, hard times began to take their toll as the company reportedly tried to sell itself to Zhone Technologies Inc. -- a deal was never reached (see Headcount: Shopping, Lifting, Moving On). After being stung by a couple of rounds of layoffs, the company shut down for a few weeks at the end of 2002 and reopened as its investors continued to give it support (see Headcount: Happy Birthday!).
While no one's buying its edge routers, Alcatel has signed a contract for Corona to produce a hardware board that will plug into Alcatel's 7300 Advanced Services Access Manager (ASAM), one of the French equipment maker's DSLAM products. The board will "run the IP control plane software for IP packet routing, and a lot of other software such as L2TP [Layer 2 Tunneling Protocol], PPP [Point-to-Point Protocol], etc.," says one source. "Corona is doing the revised version of the ISM module."
Before Alcatel would put pen to paper, it wanted to know that Corona's investors would keep the company afloat -- and they chipped in on cue. According to sources close to Corona, the startup closed an $8 million Series D financing round from its existing investors and a deal with Alcatel was closed shortly thereafter. The contract was not announced publicly at the time.
Interestingly, a similar deal was almost struck between Alcatel and Redback Networks Inc. (Nasdaq: RBAK) in mid 2002. At least one Redback source claims that Corona's win, in this case, was Redback's loss (see Redback, Alcatel Close to Alliance).
Meanwhile, Corona's own service module technology is being redesigned by Wipro, an IT services consultancy, at a software development center the two companies set up in India. The original service module, which provides IP packet processing for access-side interfaces such as OC3 and DS3 connections, was using obsolete components and was expensive to produce and repair, according to one source.
So while Corona is building a new I/O module for Alcatel, someone else is building a new I/O module for Corona. Despite the circular nature of this deal, the bottom line is that Corona appears to have extended its life and may yet stay around long enough to convince its trial customers to buy its edge routing product.
Corona representatives couldn't be reached prior to this article's publication. Alcatel and Wipro have not yet responded to requests for comment.
— Phil Harvey, Senior Editor, Light Reading