Airespace Inc. During the last few quarters, Airespace has pulled away from the pack of wireless LAN players. The latest numbers from Synergy Research Group Inc. tell the story: For the third quarter of 2004, Synergy shows Airespace made revenues of $18.2 million, making the company the third largest supplier of enterprise 802.11 gear after Cisco Systems Inc. (Nasdaq: CSCO) and Symbol Technologies Inc. (NYSE: SBL). By way of contrast, Synergy says Airespace’s closest startup rival, Aruba Wireless Networks, made $6.9 million in sales for the third quarter of 2004. This jibes with what Unstrung editors and analysts have been hearing.

During its three-year history, Airespace has inked partnership deals with Alcatel SA (NYSE: ALA; Paris: CGEP:PA), NEC Electronics Corp., and Nortel Networks Ltd. (NYSE/Toronto: NT), among others. Airespace has gathered almost $60 million in venture funding. Earlier this year, the startup even floated [ed. note: tee hee] the prospect of going public in 2005, although it has become more cautious about talking up an IPO now (see Switch Startups Mull IPOs).

Atrica Inc.

Among the private vendors of Ethernet and MPLS gear, Atrica has shown both staying power and the ability to land customers of every stripe, from operators you may never have heard of, to the metro networks of major incumbents such as France Telecom SA (NYSE: FTE) and Deutsche Telekom AG (NYSE: DT). (See Pau Touts Optical Ethernet, KVH Telecom Deploys Atrica, and Atrica Supplies Deutsche Telecom GSN.)

Atrica apparently has the right product for the right time, as a recent Heavy Reading report found that many major service providers plan on granting big contracts to Ethernet-services gear vendors in 2005 (see HR Sees Ethernet Services Explosion). There should be enough money flowing into this space to sustain both the big guys and a few newcomers.

Atrica's global reach positions it well (watch for a big win in India), as does a reseller relationship with Fujitsu Ltd. (OTC: FJTSY; Tokyo: 6702). (See Atrica Closes in on Indian Deal and Fujitsu, Atrica Sign Reseller Pact.) All this activity could add up to steady revenue growth for Atrica, which should build up enough confidence on Wall Street to take it to the streets.

BigBand Networks Inc.

Here’s an easy one: a company that’s already planning for a 2005 IPO. BigBand is playing in one of the hottest areas of telecom infrastructure at present -- advanced cable services -- and has been building its revenues, customer base, product set, and financial backing (to $100 million in total) during 2004. (See BigBand Adds Two Deployments, BigBand Shows Off CMTS, BigBand Raises $25M, and BigBand Buys ADC's IP Cable Unit.)

It now boasts eight of the top 10 U.S. cable operators among its customers, including Adelphia Communications Corp. (Nasdaq: ADLAC), Comcast Corp. (Nasdaq: CMCSA, CMCSK), and Cox Communications Inc. (NYSE: COX). BigBand was already headed toward an IPO, but the purchase of some ADC Telecommunications Inc. (Nasdaq: ADCT) assets pushed those plans into next year (see BigBand Holds Off IPO Plans).

BigBand’s potential has also attracted the attention of Heavy Reading chief analyst Scott Clavenna, who identified the vendor as a leading potential acquisition target in his "Telecom Recovery Investment Opportunities" report earlier this year (see Heavy Reading: Startups on the Rebound).

Force10 Networks Inc.

Maybe venture capitalists were too skittish about Cisco Systems Inc. (Nasdaq: CSCO) competition, or maybe they just thought the stuff looked too dull next to WiFi and VOIP. Whatever the reason, Force10 is the only meaningful startup in the running for 10-Gigabit Ethernet Switches and Routers, and as a result, it's looking like a great candidate to go public.

In addition to the technology, Force10 has the big-ticket partnership that every startup vendor needs these days, having paired up with IBM Corp. (NYSE: IBM). And the company has racked up some noteworthy wins with Google (Nasdaq: GOOG), MCI Inc. (Nasdaq: MCIP), and NTT-ME. Its 6.9 percent market share, by number of ports shipped, ranks third behind Cisco and Foundry Networks Inc. (Nasdaq: FDRY), according to Synergy Research -- and that's in a market destined to grow to $900 million in 2008 from $120 million last year, according to The Yankee Group. (See Force10 Gets Big Blue Partnership, NTT-ME Upgrades With Force10, and Tracking Google's IT Booty.)

An acquisition would still be possible, but the price by now is too much for an easy pickup. Having raised $287 million, Force10 would command more than $500 million (probably much more) in an acquisition by the likes of Cisco or Juniper Networks Inc. (Nasdaq: JNPR).

Fortinet Inc.

High-performance security: It doesn’t get any hotter than that. The VC money is still rolling into high-performance firewall vendor Fortinet, including a $50 million mezzanine round earlier this year (see Fortinet's Money Machine Rolls On).

But it’s not just the volume of the funding that was impressive; it was also the timing. The mezzanine round came on top of $30 million received in August 2003, bringing the company’s total funding to $93 million (see Fortinet Score $30M Funding Round).

A key element of Fortinet’s story is its strong product set. The company was among the first to offer the high-speed security "God-box": the FortiGate line, combining firewall, antivirus, intrusion prevention, VPN, anti-spam, and Web-content-filtering capabilities. The next big Fortinet target is the managed security services market (see Fortinet Fires Up Managed Services). Most importantly, though, Fortinet has success in its genes; its founder Ken Xie, also founded NetScreen Technologies, which did fine on its own before receiving a $4 billion buyout offer (see Juniper Buys NetScreen).

Speaking of which, Fortinet itself would make a nice acquisition target. Cisco seems a likely suitor, with other possibilities including Network Associates Inc. (NYSE: NET), Nortel, and Symantec Corp. (Nasdaq: SYMC). But given Fortinet's strength and the demand for high-speed security products, it seems more likely to hold out for an IPO.

Huawei Technologies Co. Ltd.

Chinese equipment vendor Huawei says it will stage an international IPO sooner or later, and when that day comes, the offering is likely to be a whopper. Huawei says it is already racking up revenues of $5 billion a year and hopes to double this by 2008 (see Huawei Set for $5B in 2004). That would place the company among the biggest telecom equipment manufacturers in the world, behind Cisco but ahead of Lucent Technologies Inc. (NYSE: LU) and Nortel.

There’s no doubt Huawei’s profile has risen in the last few years, and its name pops up frequently in discussions about big-carrier requests for proposal (RFPs). It's not just a China thing, either; sources say Huawei has particular momentum in Europe.

The IPO appears all but certain (see Is Huawei Edging Closer to IPO?). But the timing hinges on investor perception. Huawei also has to get its books and operations in sync with Western standards for financial reporting, to draw North American and European investors. Huawei, which claims to be squeaky clean in every respect, says it's got a serious team of accountants working on this process.

Competitors, of course, like to dredge up issues associated with Huawei's Chinese heritage, such as governmental support, connections to the military, and intellectual property rights (see Cisco Drops Huawei Suit and Huawei in Spying Flap). But with its high-profile lawsuit with Cisco recently resolved, many of these complaints are losing their force (see Cisco Drops Huawei Suit). Huawei is planning a major marketing campaign to address these perceptions.

Starent Networks Corp.Founded in August 2000, Starent Networks weathered the wireless downturn and is now the lone startup operating in the once crowded GPRS gateway support node (GGSN) and packet data serving node (PDSN) market. As rivals hit the wall, Starent built up serious revenue from a series of impressive big-name customer deals for its ST16 Intelligent Mobile Gateway -- most notably, China Unicom Ltd., KDDI Corp., SK Telecom (Nasdaq: SKM), and Virgin Mobile USA LLC. All these deals have been secured in the face of competition from Cisco. (See Starent Extends Chinese Deal, Starent Networks KDDI, Starent's Startup Double-Up, and Virgin Deploys Starent.)

As wireless data services really begin to take off, Starent can expect further wins from carriers needing to invest in their packet infrastructure, and the thinned competitive herd means Starent is poised to strike for the No. 1 spot in the market. In terms of funding, Starent raised $80 million from VCs, with no further investment expected, and IPO rumors have been rife all year following some 2003 REG-D filings with the SEC that indicated some new private equity investments (see VCs Shine on Starent and Starent Prepping for IPO).

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