LVL7 Adds Upgrade, Cash
LVL7 Systems Inc., a company headquartered in Cary, N.C., claims the latest iteration of its Fastpath software, announced today, can save makers of networking gear up to a year of design time, along with associated costs (see LVL7 Upgrades Fastpath Software).
What's more, LVL7 says it's already sold enough earlier versions of Fastpath to chipmakers and equipment vendors to realize a 65 percent growth in revenues over the past three quarters. As a result, LVL7 say it's in line for $10 million in new funding next quarter. The startup says it will use the money to fund a sales team able to cope with an "overflow" of qualified leads.
LVL7 started in November 1999 with $10 million initial funding from Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC) and Accton Technology Corp., a Taiwanese OEM of Ethernet interface cards, switches, and routers. Founder Ernest Baker was CEO of Accton Americas and formerly worked at IBM Corp. (NYSE: IBM), as have most of the key executives at LVL7.
Going forward, experts say the 60-person startup will need all the help it can get. At least one partner says LVL7 has a product that's more complete than those from competitors. But competition from other startups is growing. And some fear that LVL7 may not be able to stand up to several of the established embedded systems players that are aiming squarely at the same niche.
Let's examine that niche. LVL7 says it can supply software to provide device interfaces, network management, routing protocols, and other basic but essential functions for ASICs (application-specific integrated circuits) or network processors. As a result, both makers of silicon and OEM equipment makers save enormous amounts of time and money and can stick to their core competency in hardware or chip design.
The need for such software is becoming increasingly apparent. Some large silicon makers have chosen to jettison network processor subsidiaries rather than sink more development and marketing into them (see Vitesse Drops Some Packets). And silicon vendors and equipment makers are looking to cut costs by outsourcing costly design and development processes.
The company began supplying functional software for specific chips and network processors, such as those from AMCC. Over time, its roster grew to include chips from Intel Corp. (Nasdaq: INTC), Marvell Technology Group Ltd. (Nasdaq: MRVL), SwitchCore AB (Stockholm: SCOR), and Vitesse Semiconductor Corp. (Nasdaq: VTSS), as well as several equipment makers that make their own ASICs (see LVL7, AMCC Integrate Solutions and LVL7, Marvell Team on GigE).
With today's announcement, LVL7 says it's taken a step toward extending its compatibility even further, by offering basic software that's generic enough to work with nearly any vendor's chips, embedded operating systems, and protocol suites.
An executive at one vendor that has worked with LVL7 -- who asked not to be named -- thinks the startup's ready to work with a broader range of silicon and operating systems: "They offer a more complete solution. The problem is they're competing in a space that's growing fast, with established players."
Almost all of LVL7's partners also are working with other so-called "merchant software" makers, ones that represent the key competitors the startup faces. The list is headed by publicly held embedded software firm Wind River Systems Inc. (Nasdaq: WIND). Also in line is Radlan Computer Communications Ltd., a company that creates production-ready Ethernet switches and subsystems, incorporating software that's generic enough to fit a range of ASICs and other vendor-supplied elements. Data Connection Ltd. (DCL), a U.K.-based firm, specializes in writing complex code involving a range of protocols, including Multiprotocol Label Switching (MPLS) and others associated with networking (see Data Connection Wins NEC Order). Future Communications Software is another protocol specialist with a focus on network processors.
There's a growing roster of newer companies too: IP Infusion Inc., specializes in core routing and switching control-plane software (see IP Infusion Adds IS-IS, IP Infusion, Consystant Collaborate, and IBM, IP Infusion, S3 Demo Jointly). NetPlane Systems Inc. features software for controlling IP quality of service (see NetPlane Aims at Simpler QoS). Teja Technologies Inc. writes software for network processors from Intel and others (see Why Intel Loves Teja ).
Only time will tell whether LVL7 can gain on this kind of competition. So far, it looks to be building good relationships. One equipment vendor, Quantum Bridge Communications Inc., gives an example of how LVL7's software helped save the cost of developing software for the 24-port Ethernet and Gigabit Ethernet cards used in its access gear. Kyoo Lee, VP of data networking at Quantum Bridge, says without LVL7 the company would have had to hire six to eight developers to work one and a half years on the software they needed.
But Lee is clear that the relationship isn't etched in stone. He says that when he needed it a couple of years ago, there weren't any other suppliers. Lee says he's not ready to change things now but will certainly look at the other players that have subsequently come down the pike if he needs to do so, despite enjoying "a good working relationship" with LVL7.
— Mary Jander, Senior Editor, Light Reading