Resolute Nabs More Funding

The combined companies of Lycium Networks and Redux Communications now have a name and a few dollars more to pursue their work in circuit-emulation chips.

Resolute Networks Ltd. unveiled its new identity earlier this month. The company was formed in November when Israeli startups Lycium and Redux combined forces, but the new name wasn't unveiled until last month. Given the name, one presumes the company is, indeed quite resolute -- or maybe they're just trivia-happy Star Trek geeks[ed. note: like the present author, apparently]. (See Redux, Lycium Tie the Knot and Redux, Lycium Get Resolute.)

As a wedding present of sorts, Resolute has received a small funding round from the startups' combined investors -- Accel Partners, Benchmark Capital, Delta Ventures Ltd., Genesis Partners, Giza Venture Capital, and Partech International. The company isn't disclosing numbers, but the funding is "on the order of several million dollars," bringing the companies' total funding to nearly $40 million, says Daniel Bar-Lev, Resolute's vice president of marketing.

The two companies had split the market. Redux was targeting speeds up to T3 (45 Mbit/s), while Lycium worked on T3 up to STM1 (155 Mbit/s). Moreover, Redux was doing systems, modules, and chips, while Lycium focused on just chips. Combined, they'll be targeting OEM deals with systems vendors, and Lycium's chips will soon make their way into Redux's products, Bar-Lev says.

Combined, the companies have about 45 people. Although the deal was characterized as a merger, most of Resolute's management comes from the Redux side, including CEO Zeev Pritzer. From the Lycium camp, CTO Ron Cohen retains his title with Resolute.

Circuit emulation, also called TDM over IP, allows TDM traffic to be placed onto -- guess what? -- Internet Protocol (IP) networks. It's a subset of pseudowires, which are a collection of technologies for placing older traffic such as Asynchronous Transfer Mode (ATM), Frame Relay, or even Ethernet onto packet networks.

Even though circuit emulation is a small market, it's been around long enough for a few competitors to spring up. Axerra Networks Inc., Overture Networks Inc., and RAD Data Communications Ltd. build subsystems and systems for circuit emulation, while TranSwitch Corp. (Nasdaq: TXCC) and Zarlink Semiconductor Inc. (NYSE/Toronto: ZL) compete on the chip side. (See Axerra Completes Interop Testing, RAD Plans Ethernet Access Push, Overture Awarded Pseudo-Wire Patents, Redux Revisits RAD, TranSwitch Storms ITU Telecom, and Zarlink Launches CESOP Processors.)

Service providers use the technology to move their customers' old services onto IP backbones. Bar-Lev notes that Resolute does have Tier 1 carriers lined up, including one in Japan that is connecting customers' old TDM lines to Ethernet uplinks. This keeps the old services intact for comfort factor and lets the customer add them newfangled Ethernet services if desired.

Nice example, but Bar-Lev admits it's not a killer app. "For that Tier 1, I wouldn't say it's the biggest business in the world, but it's important for keeping their customers satisfied," he says.

Despite a slow start, circuit emulation has some good prospects, according to "Pseudowires and the Future of Transport and Access Networks," a report recently released by Heavy Reading (see Heavy Reading Salutes Pseudowires).

"Many operators remain wary of anything that sounds like circuit emulation, yet as MPLS-based solutions replace ATM-based solutions in the access network, the support for mixing circuits and packets over a common backhaul link becomes necessary for many operators," writes Scott Clavenna, Heavy Reading chief analyst and the report's author.

In a poll conducted for the report, two thirds of the 66 carriers responding said they would consider using circuit emulation to run TDM services.

"Circuit emulation has long elicited hot-or-cold responses from service providers. What Heavy Reading has found in the last six months is an increasing use of circuit emulation, due to improved technology and standards, and increasing pressure to consolidate multiple services onto a single pipe," Clavenna writes.

— Craig Matsumoto, Senior Editor, Light Reading

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