Hurrah! In this season of festive cheer and goodwill for many folks around the world, we bring you glad tidings from wireless VPN specialist NetMotion Wireless Inc. to end what has been a very tough year for the wireless data sector.
The wireless VPN vendor and Unstrung 25er has just finalized its biggest-ever order, worth $200,000, and closed an additional $5 million of funding to complete its $10.8 million Series B round, which kicked off in August 2002 with an initial $5.8 million (see NetMotion Pockets $10.8M).
August, it seems, was a good fundraising month for wireless VPN specialists. NetMotion competitors Ecutel Inc., ipUnplugged AB and Columbitech AB all raised new funds at around the same time (see Funding: Startup Roundup).
NetMotion’s VP of marketing, Shelly Julien, says there is now real momentum behind the business thanks to substantial orders from various U.S. state police forces and other public safety organizations, as well as from private sector clients in sectors such as healthcare.
“We feel a whole lot more cheerful than we did this time last year. Of course, we were positive then as well, but it’s good to see customers validate the technology to the extent they have during the past 12 months. Several of our customers placed additional orders, so it's clear they are satisfied with what we've got on offer.”
NetMotion’s solution uses proprietary client/server technology to offer session-layer mobility (as opposed to Mobile IP-based mobility), which enables persistent application sessions even when a device fades in and out of range, moves across IP subnets, or switches between different network types, such as WLAN and 1xRTT. To secure the VPN, NetMotion uses various encryption techniques, such as Triple-DES 112-bit encryption or AES/Rijndael 128-bit encryption, and security protocols such as CIFS (Common Internet File System) and Diffie-Hellman key exchange. [Ed. note: Yes, these are real terms, and not names resulting from a seasonal over-indulgence in eggnog]. It does not rely on the more common IPSec encryption, which introduces significant packet header overhead into today’s narrowband wide-area wireless networks. IPSec is nevertheless supported on the Windows 2000 and XP clients.
The firm says that although the $200,000 contract is its biggest so far, it has “quite a few other deals approaching this level.” It now has more than 40 customers and is experiencing increasing interest from utility, manufacturing and enterprise organizations. “People are beginning to think the horizon’s a little brighter and they can move ahead on trials,” says Julien.
As a result, NetMotion is looking to make between 15 and 20 new hires in product development and sales and marketing roles.
For the data-centric wireless VPN business generally, much of the activity to date has focused on laptop users and high-end PDA users who have devices actually powerful enough to run the necessary client software. But there are moves afoot to VPN-enable smaller devices, such as next-generation smartphones. Last week, for example, Nokia Corp. (NYSE: NOK) announced a deal that will see its new(ish) Symbian VPN client offered by IBM Global Services (see IBM Offers Nokia VPN). Until recently, Nokia had standardized on Certicom Corp.’s (Toronto: CIC) Symbian VPN client for its Communicator devices.
The August edition of the Wireless Oracle, "Wireless VPNs: Security and Convenience for Enterprise Data", analyzed the wireless VPN market and identified security, mobility and persistency as the key features of a mobile VPN.
At the top end of the market, the report found that a small group of venture-funded startups -- using non-standard, proprietary technology to enhance the usability of their solutions -- have got a jump start on the heavyweight competition. However, the report also questions if these smaller firms can maintain their advantage in the face of the anticipated onslaught of standards-based, network-hosted VPN services and much simpler, client-free SSL-VPNs for wireless Web applications.
— Gabriel Brown, Research Analyst, UnstrungEditor's Note: Light Reading is not affiliated with Oracle Corporation.