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Crescent Comes Out

Light Reading
News Analysis
Light Reading
9/15/2000

Crescent Networks, the latest in a long line of IP service provisioning vendors, will announce its arrival on Monday.

At first glance, the vendor seems to have many of the ingredients necessary for success. It has a strong management team, led by former Lucent Technologies Inc. (NYSE: LU), Nortel Networks Corp. (NYSE/Toronto: NT), and Fore Systems employees. And it has already secured $13 million in first-round backing from top venture capital firms like Bessemer Venture Partners, St. Paul Venture Capital, and Venrock Associates. It's also targeting a hot market: IP service provisioning for the metropolitan area network. Crescent claims its product will blow the socks off the competition by offering "virtual router" capabilities that are exponentially more scalable than those of its competitors. Virtual routing enables service providers to create separate routing tables for each customer on one routing platform. The technique makes it easier to offer virtual private network (VPN) services and other differentiated IP services (see Ironbridge Goes Virtual).

The problem is that the company has provided absolutely no evidence that it can actually do any of this; it flatly refuses to discuss how its product works. “They say they can scale the virtual routing substantially, but I need to see numbers,” says Ron Westfall, senior analyst with Current Analysis. "Nobody has any details. We're waiting to see if what they’re talking about is true.”

Crescent is far from being alone in this crowded market. CoSine Communications Inc., Nortel, Lucent, Ennovate Networks, Unisphere Solutions Inc. (proposed Nasdaq: UNSP), and Quarry Technologies Inc. all want a piece of the action. Already some consolidation has begun. Nortel acquired Shasta Networks last year, and Lucent acquired Spring Tide Networks this summer. Some analysts speculate that Cisco Systems Inc. (Nasdaq: CSCO), Alcatel SA (NYSE: ALA), and possibly Nokia Corp. (NYSE: NOK)could be shopping around for startups. There's no shortage of potential candidates.

-- Marguerite Reardon, senior editor, Light Reading, http://www.lightreading.com

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