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Geyser Spouts Off

Light Reading
News Analysis
Light Reading
8/8/2000

Yet another Sonet startup has entered the crowded metro fray. But its savvy backers may ensure this outfit a better than even chance of survival.

Geyser Networks Inc. announced today that it has scored $37.5 million in second-round funding. Led by VantagePoint Venture Partners , with contributions from Access Technology Partners, Boston Millennia Partners, Crimson Ventures, Sequoia Capital, and Access Technology Partners, the round brings Geyser's total funding to $44.5 million.

"We'll use the money for last-stage development, production, channel expansion, and beta testing," says CEO Joe Savage. The startup has about 67 employees today, about 50 percent of whom are engineers.

Geyser's product, Savage says, will be unveiled before the end of this year. The pitch is the Old Faithful: Geyser is making a platform designed to maximize bandwidth efficiency in the metro space -- a market that's getting noticeably crowded with formidable competitors, including Cerent (now part of Cisco Systems Inc. [Nasdaq: CSCO]), Cyras Systems Inc., Metro-Optix Inc., and Siara (now Redback Networks Inc. [Nasdaq: RBAK]).

Like most other metro vendors, Geyser says it plans to use a combination of DWDM and Sonet, running at rates up to OC192, to carry a variety of services -- including ATM, TDM leased lines, frame relay, and gigabit Ethernet. And, like some, Geyser says it will move IP traffic through its box in native format, unchanged and untunneled. Another differentiator -- although it's one that has been heard before -- will be the ability to "allocate bandwidth to various services dynamically," as Savage puts it.

In fact, however, it's not the technology that gives Geyser its best chance of succeeding; it's the backers -- namely, Wu-Fu Chen, optical entrepreneur extraordinaire, and his pal Gordon Lee, founder of CopperComm Inc. and engineer with Ascend and NET. Chen clearly has a golden touch (see Wu-Fu Chen ), and any company he sponsors is closely tracked by a range of would-be investors.

Still, the Sonet metro market will pose a challenge worthy of The Germinator. Only last week at the Opticon conference in San Francisco, Chen himself held forth on the coming shakeout in the Sonet market: "There are too many companies going after the same space," he said in Thursday's keynote speech (see Wu-Fu Chen: In It for the Long Haul). "Not everyone will make it." But a key success indicator, he said, is the "team behind" an optical startup.

If that's the case, Geyser may have a leg up -- particularly since Chen founded this company, instead of stepping in after the fact. But clearly, the race for the metro space will be a hard and fast one, with the ultimate winners those that can live up to carriers' expectations with actual products in live networks.

-- Mary Jander, senior editor, Light Reading http://www.lightreading.com

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