Why Cisco Likes Quake
The funding round was notable not just for its size but for its contributors -- including equipment vendors Cisco Systems Inc. (Nasdaq: CSCO) and Mitsubishi International Corp., as well as VCs Bowman Capital, the Emerging Alliance Fund, and Mohr Davidow Ventures.
Indeed, the presence of Cisco and Mitsubishi as strategic investors indicates the importance they place on what Quake's trying to do -- specifically, create chips that support higher data rates in less space and with lower power requirements.
"We have more integrated functionality than other providers," says Dan Trépanier, Quake's CEO. Speaking in an exclusive interview with Light Reading in Ottawa earlier this month, he described his company's strategy -- namely, designing ICs for emerging high-speed Ethernet, Infiniband, and Fibre Channel products with optical networking capabilities.
"We've put the functions of six or seven chips in three," he says.
It's a boast Trépanier's been making for months (see Quake Tools Up With $12 Million). But the firm's apparently been living up to its claims. Since Christmas, Quake's been shipping samples of a laser driver, a transimpedance amplifier, and a 10-Gbit/s serializer/deserializer (SerDes) for use with serial lasers -- all silicon germanium CMOS designs. Customers include two leading optical transponder makers and a series of system makers, including Cisco, Lucent Technologies Inc. (NYSE: LU), and Nortel Networks Corp. (NYSE/Toronto: NT), says Trépanier. He says the firm's planning a 40-Gbit/s SerDes for unveiling later this year.
It's easy to see why Cisco and Mitsubishi are attracted to Quake. Cisco has made high-speed Ethernet a key goal for its networking gear (see Juniper Wins Monster Router Test). And Mitsubishi has been working hard to close multisource agreements with other 10-Gbit/s component suppliers (see 10-Gig Transponder Group Grows and 10-Gig Ethernet MSA Group Grows).
But what about the VCs? "A large investment is definitely a vote of confidence," says Kirk Falconer, director of research and analysis at Macdonald & Associates Ltd., a firm that tracks VC activity in Canada. He says VCs, while getting choosier about where they invest, are tending to drop bigger amounts of cash on companies they believe in.
So far, Quake's agility to market has put it in a class with the likes of Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC) and Broadcom Corp. (Nasdaq: BRCM).
On the downside, it may be tough to keep up with the big boys in specific areas, such as the addition of forward error correction. So far, Quake's products lack this increasingly essential function, although it is slated to be added across the product line.
In the meantime, Quake will stay focused on its immediate goals. The company will use its new funds to continue expansion, including a move of its 65 Canadian employees from the first floor of a crowded Ottawa professional building to sleek new digs in Kanata, Ontario, June 1. A small office in San Jose, Calif., will "never be huge," Trépanier says, but will remain essential for competitive sales.
- Mary Jander, Senior Editor, Light Reading