Force10 Rakes It In

Force10 Networks Inc. today announced a $74.9 million round of funding, a sum it says will allow it to become a public company next year.

The company has raised $284 million to date, a considerable pile for a company that started life in 1999. Meritech Capital Partners and Morgenthaler co-led the latest funding round, with new investor Crosslink Capital joining existing investors U.S. Venture Partners, New Enterprise Associates (NEA), and WorldView Technology Partners.

Force10 has recently made some notable customers wins, including NASA, the Department of Homeland Security, NTT-ME , and MCI Inc. (Nasdaq: WCOEQ, MCWEQ).

VP of marketing Andrew Feldman predicts that the company will be profitable next year, while expanding its sales operation to about 100 people from 55.

That momentum helped Force10 claim the pole position in Light Reading's list of Top 10 Private Companies (see Force10 Networks).

The Milpitas, Calif.-based company was the first to market with a full-featured switch capable of wire-speed performance at 10 Gbit/s, and has already partnered with IBM Corp. (NYSE: IBM) in the enterprise space. Force10’s core offering is the E-series range of switch/routers.

Analyst firm Yankee Group says the 10-Gbit/s swtich market will grow from about $120 million in 2003 to a whopping $900 million in 2005 (see 10-Gigabit Ethernet Switches and Routers). Despite this, the R&D required, the competition, and startup costs make the market prohibitive for new entrants.

Comings and goings within Force10 have also suggested that an IPO is in the offing. For example, Ralph Harms was hired as CFO, thanks to his track-record for taking companies public.

As far back as 2001, Force10 was also plucking staff from Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (Nasdaq: JNPR) (see Force10 Plucks Cisco, Juniper Talent).

At that time, Marc Randall, a seven-year Cisco engineer, was lured to Force10 to become vice president of engineering. Randall is now the company’s CEO.

Feldman won't talk about specific products on the horizon, but he notes that security will be a top priority. The company is planning to improve its access control list features, its denial-of-service (DOS) attack prevention, and its ability to fend off worms.

He also says Force10 will be working to drive down the cost of 10-Gigabit Ethernet over the coming months. This new funding round helps Force10 weather the storms created by price cuts in an ultra-competitive sector.

Force10's head-to-head competitors include Foundry Networks Inc. (Nasdaq: FDRY), Extreme Networks Inc. (Nasdaq: EXTR), and Cisco, which is doing its utmost to unsettle its rivals with a cut-price offer (see Cisco Bombs 10-GigE Pricing).

— James Rogers, Site Editor, Next-gen Data Center Forum

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light-headed 12/5/2012 | 1:37:55 AM
re: Force10 Rakes It In Profitable next year... blah, blah, blah... IPO on the horizon... blah, blah, blah... heard this story before... getting old. Last year it was gonna' be 2004, now it is gonna' be 2005, next year it will be 2006. Feldman came from Riverstone - now that was a GREAT IPO! Glad I bought those shares at $20 and held them down to $1. Sorry to be so negative but when is everyone going to wake up and find out it isn't 2000 anymore.
Truelight1 12/5/2012 | 1:37:54 AM
re: Force10 Rakes It In EOM
KillDozer 12/5/2012 | 1:37:47 AM
re: Force10 Rakes It In You should be sorry. If you continue to measure companies against 2000 you will continue to be let down. Are you a sad sack engineer who is disapointed because you have had to spend 4 years working and expected to be rich? Well this should be a lesson to you. You cant get rich quick. It might take more than 5 years to become sucessful.

Maybe you can tell us, what you would do if you were there?
light-headed 12/5/2012 | 1:37:45 AM
re: Force10 Rakes It In Maybe you can tell us, what you would do if you were there?

I would take a lot of Xanax/Prozac and Pepcid AC!
Tony Li 12/5/2012 | 1:37:44 AM
re: Force10 Rakes It In HD,

What if there is some kind of acquisition in the cards?

HD-NET 12/5/2012 | 1:37:44 AM
re: Force10 Rakes It In As a former Force10 S/E, I'm suprised to see VC groups willing to fork it out for another round. They must know something they're not sharing. So many ethernet switch vendors have near line-rate 10GE these days that I gotta wonder why a customer would choose Force10. Compared with Cisco, the feature set is (or was) remarkably lacking. One of my service provider customers wanted to do metro ethernet. After having discussions with the customer, I started lobbying for TLS on the roadmap. Made the developers angry but marketing understood the potential. Only problem was that there was no good spec for TLS at the time. Just too many situations of having to explain to customers why we didn't have even the most basic features of IOS. Let's see, what version is IOS now? Again, why would someone risk their project to a bunch of guys working frantically on version 1 of some kind of VxWorks stacked routing or switching protocol? I fail to see the value proposition.
OpticOm 12/5/2012 | 1:37:43 AM
re: Force10 Rakes It In Hmmmm.
I know a couple of other "high flying" start-ups who did not get good offers, only to end up crashing to ground.
It does not seem to be a smart move so far...
signmeup 12/5/2012 | 1:37:43 AM
re: Force10 Rakes It In Word is they just turned down an offer from Juniper. Fairly substantial offer at that.

I would have jumped on it if I were them.

HD-NET 12/5/2012 | 1:37:31 AM
re: Force10 Rakes It In If the rumour of the Juniper offer is true then maybe F10 is holding out for a better offer. Seems like a Juniper/F10 combination would make a lot of sense. Something to watch....
Honda_Elise 12/5/2012 | 1:37:24 AM
re: Force10 Rakes It In I would think a Juniper/Foundry combination
would be better. Foundry has a much wider
portfolio and a solid customer base.
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