Optical/IP Networks

Laurel Networks Scores Big Round

Laurel Networks, a router startup, today snagged a $60 million second round of funding.

How did this 100-person outfit manage to attract such a fat round at a time when many VCs are battening down the investment hatches? The answer is probably that it’s targeting what is potentially a hugely lucrative market: helping carriers make money from IP services.

The Cliff Notes version: Laurel plans to build a specialized router that includes bandwidth management and billing features. Service providers need such services to turn bits into bucks.

“Today’s router products lack the necessary control and accounting features. Without them, service providers can neither make money off of IP, nor migrate their ATM and frame relay accounts onto it,” says Steve Vogelsang, vice president of marketing at Laurel.

Laurel’s router will be installed in service provider POPs (points of presence) between the metro and long-haul network. While the company has not yet announced product details, it says that it plans to replace the standard forwarding engine found in today’s routers with a more sophisticated “service routing plane.” This element will implement IP QOS (quality of service) and security, as well as traffic counters that identify packets and track usage for use in billing reports, it says.

It’s a good idea. The problem is that a lot of other people have had the same one. A partial list of the vendors developing products with the same target market in mind includes Amber Networks Inc., Caspian Networks, Cisco Systems Inc. (Nasdaq: CSCO), Jasmine Networks, Juniper Networks Inc. (Nasdaq: JNPR), Tenor Networks Inc., Unisphere Solutions Inc. (Nasdaq: UNSP), and Village Networks Inc..

In other words, Laurel has its work cut out to differentiate itself against its myriad competitors, and to convince service providers to give its product a shot.

Trinity Ventures led the vendor’s latest round. The other participants were CommVest, New Enterprise Associates (NEA), Rein Capital, WorldCom Venture Fund (the venture arm of WorldCom Inc.; Nasdaq: WCOM), and WorldView Technology Partners. Laurel had previously received $17.3 million in funding.

-- Stephen Saunders, US Editor, Light Reading http://www.lightreading.com

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