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Crescent Angles for the Edge

Light Reading
News Analysis
Light Reading
7/1/2002

Crescent Networks Inc. says it closed a $24 million funding round back in April, bringing its total funding to date to $66 million. The investors -- Jafco Ventures, Bessemer Venture Partners, St. Paul Venture Capital, and Venrock Associates -- were all previous Crescent backers, says Crescent CEO Gerald Wesel.

The revelation comes as Crescent, a quiet company, has decided to come out of its shell a little and talk to some press and industry analysts. "We're not going to do a press release," explains Wesel. "We're just telling people in person."

The company makes an edge router, the VRX-1000, that is similar to Redback Networks Inc.'s (Nasdaq: RBAK) SmartEdge 800 edge router in its approach. The box sits in a central office between a core Multiprotocol Label Switching (MPLS) or Asynchronous Transfer Mode (ATM) switch and an enterprise access device. In a single chassis, the product supports several "virtual routers." Like a separate physical router, each virtual router runs its own instance of routing protocols, routing tables, buffer memory, and management software (see Redback's Edge Router Redux).

The theory behind this approach to edge routing is to allow a carrier to fix a problem in one of the virtual routers without bringing down the whole box. Also, it saves the service provider from having to put a dedicated physical edge router at each customer site -- and it's presumably better than having a chassis with dozens of router line cards, because of its ability to scale.

"We can literally support a thousand isolated, secure, quality-of-service-enabled virtual private network customers on one box," says Wesel.

Crescent claims its VRX-1000 can work better in a network with older ATM switches than can Redback's SmartEdge 800.

"They claim to do about 500 virtual routers per chassis, and their virtual routers don't have quality of service or service-level agreement guarantees, since their virtual routers are connected over an IP backbone supporting GRE [generic routing encapsulation]," says Abhay Joshi, Crescent's VP of business development and strategy. "Our virtual routers are more flexible in terms of access and core interfaces. They work over ATM, MPLS, IP through GRE, or any alternative technology such as optical."

Redback's VP of marketing, Shailesh Shukla, says Joshi's comments are off the mark. "We've demonstrated 2,000 virtual routers per chassis on the SmartEdge 800. We support the entire range of quality-of-service features required in networks. And we have the ability to provide any service or any protocol over any circuit on any port on any slot."

"Crescent is obliged to assert some differentiators -- because, otherwise, why pay attention to them?" says Ron Westfall, an analyst at Current Analysis.

Besides baiting its competitors, Crescent is collecting praise for its engineering bent. Bradam Group Principal Doug Green, who did some consulting work for Jafco, says he's impressed with Crescent's routing focus. "There are a lot of Layer 2 MPLS switches out there that say they'll add routing, but the few companies that do routing well are those that have been very focused on it. To [Crescent], routing isn't just a hobby."

Green adds that the value of Crescent's box is that a large incumbent carrier could go to its frame-relay customer base and sell Layer 2 or Layer 3 virtual private networks (VPNs) as an added service, without having to uproot its existing core switches.

"They do appear to be doing more with less," says Westfall. "They're doing a good job of avoiding the 'God box' trap because their whole proposition rests on edge routing. They'll likely avoid the mistakes made by Sedona Networks and Gotham Networks, which tried to be too many things to too many people." (See Sedona's Sad Demise.)

In March, Crescent announced a distribution agreement with Japan's NTT-ME, the systems integrator affiliate of NTT Communications Corp. So far, NTT-ME is Crescent's only paying customer, but Crescent says it has been focused exclusively on supporting the company for a while and hopes its dedication will pay off with some carrier sales through NTT-ME in the near future.

Though Redback is Crescent's closest competitor, the company also competes with Allegro Networks Inc., Cisco Systems Inc. (Nasdaq: CSCO), CoSine Communications Inc. (Nasdaq: COSN), Juniper Networks Inc. (Nasdaq: JNPR), and Nortel Networks Corp. (NYSE/Toronto: NT).

— Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com Want to know more? The big cheeses of the optical networking industry will be discussing this very topic at Opticon 2002, Light Reading’s annual conference, being held in San Jose, California, August 19-22. Check it out at Opticon 2002.

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BobbyMax
BobbyMax
12/4/2012 | 10:10:43 PM
re: Crescent Angles for the Edge
It is hard to believe that Crescent has decided to stay in business in spite of very crowded market. There are over 30 Edge Router products. Most of these products are very similar with essentially no product distinction.

But the concept of virtual routers is nothing new and claims along similar lines were made by vendors.

The virtual router, if it is a technology, does not offer enough of a product distinction.
ipoverbus
ipoverbus
12/4/2012 | 10:10:35 PM
re: Crescent Angles for the Edge
yawn...

agree with BobbyMax's comment.
There is nothing in the
press coverage by LR seems to show that
Crescent has any jaw-dropping features
that are to die for...
plumpy
plumpy
12/4/2012 | 10:10:34 PM
re: Crescent Angles for the Edge
Brilliant, another edge router. What is the
brain trust at Bessemer thinking ? (Bessemer, like Will Rogers, never met a deal that they
did not like.)

The VCs in this deal are taking the stance
of an army with rifles facing Stealth bombers.
"Let's get everyone to fire in a different
part of the sky and maybe we will hit one."

As for the late announcment. Several possibilities: Round linked to performance,
finally a single network customer (no money or applications announced-sounds like a onesee in
a lab, or VC need to look busy.)

24 million will buy about 1/3 of a router development for a year. No marketing, sales, or
prototypes.

Kudos !
p
realdeal
realdeal
12/4/2012 | 10:10:34 PM
re: Crescent Angles for the Edge
ARE THESE THE SAME GUYS WHO CLAIMED THEY HAVE A "ROUTER-LESS ROUTER" OR ARE THEY THE GUYS WHO DRIVE AROUND IN THE WHITE VAN WITH "RO-RO ROUTER" INSIDE?

HEY, INTEL HAS THE "INTEL-INSIDE" SLOGAN WORKING. CRESCENT OUGHT TO tm THE "RO-RO ROUTER" SLOGAN IF ELLACOYA DIN'T ALREADY TAKE IT.
LightMe
LightMe
12/4/2012 | 10:10:34 PM
re: Crescent Angles for the Edge
Late? Rumor has it that this deal closed in January and couldn't score any additional lead investors. Hmmmmm, wonder why?

And another edge router? Not at all. This is a Virtual Edge router, which is not the same as a smartedge router, which is not the same as an multi-router, which is not the same as a 7500, or ERX or...what were we talking about again?
LightMe
LightMe
12/4/2012 | 10:10:33 PM
re: Crescent Angles for the Edge
>>Rumor also has it that this is the only startup edge routing platform that works. Less hype more product...

Which explains all the VC interest and customer wins, of course...
networksguru
networksguru
12/4/2012 | 10:10:33 PM
re: Crescent Angles for the Edge

Rumor also has it that this is the only startup edge routing platform that works. Less hype more product...
realdeal
realdeal
12/4/2012 | 10:10:32 PM
re: Crescent Angles for the Edge
"Rumor also has it that this is the only startup edge routing platform that works. Less hype more product..."

When it's only known within the walls of the company we call it "drinking the Kool-Aid", not a rumor.

jamesbond
jamesbond
12/4/2012 | 10:10:30 PM
re: Crescent Angles for the Edge
Rumor also has it that networksguru works for
this piece of shit.
fletch
fletch
12/4/2012 | 10:10:29 PM
re: Crescent Angles for the Edge
You've got to be kidding me. Wesel told the employees of Crescent in DECEMBER 2001 that they had closed on the financing. He then went on to say that they were looking for an additional $6 million to make it an even $30 million. Now they're saying the $24 million closed in April. Why is it that in this time of financial woe, a company wouldn't make a huge announcement that they had received additional funding? It's simple...their product isn't any good, they don't have any REAL customers, and they are playing in a space that's occupied by many competitors. No matter how much funding they have, Crescent won't make it!! Gee, there was no mention of the 20% lay-off they had in January and the lay-off they had in April...even the VP of Marketing was let go!
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