NetVmg: A Bandwidth Cost Cop
The answer is no, according to NetVmg Inc., a Silicon Valley startup that today announced plans to sell software that will enable corporations to optimize their Internet connections in cases in which they use multiple carriers -- known in the business as “multi-homing.”
In a multi-homing environment, a company has multiple Internet service providers that might range in service quality and cost. NetVmg’s product consists of software loaded onto PC-processor hardware that sits behind the corporate router and automates the management of how these multiple connections are used. The product, called the Flow Control Platform (FCP), watches what's going on at various carriers networks by monitoring routers using the Border Gateway Protocol (BGP). It can then make decisions about where the Internet traffic is going.
For example, NetVmg officials say its product could be configured to always send the bulk of traffic to the lowest-cost provider, spilling over to more expensive providers only when bandwidth has run out. In another example, the software could be configured to send high-priority application traffic to the more reliable service provider or distribute traffic in such a fashion that it’s always headed for the pipe with the best service at any given time.
The idea of monitoring and optimizing data connections is not new. Companies such as Akamai Technologies Inc. (Nasdaq: AKAM), Inktomi Corp. (Nasdaq: INKT), and Packeteer Inc. (Nasdaq:PKTR) have worked on products that help speed up the access of data on large Internet-based networks. But none of the products from these companies specifically addresses multi-homing.
Analysts say the use of multi-homing is growing and such products may prove their worth to corporations trying to manage these connections.
"This has become a big deal because there are so many enterprises doing multi-homing," says David Passmore, an analyst at the Burton Group. Passmore says the launch of several companies in this area should get notice. "All of the companies have different models of how they offer the services. But most of this stuff isn't even on the radar screen because it's so new."
Indeed, NetVmg is not alone. Emerging competitors include Sockeye Networks and RouteScience Technologies Inc., both of which have received venture funding. NetVMG and RouteScience appear to be most similar, in that they are targeting the same customers and business model and they are roughly at the same stage of development. NetVmg plans to ship its products next month, and in August RouteScience said its PathControl product would be available by the end of October. Sockeye has not yet announced any specific product details.
In NetVmg’s case, the model is to sell the Flow Control Platform to enterprises at a price starting at $20,000 but ranging up to hundreds of thousands of dollars, depending on the size of the installation. NetVmg is also looking to resell the product through equipment OEMs, perhaps eventually packaging it with other hardware devices such as edge routers.
What's the selling point? If NetVmg can show that its software can either lower the cost of multi-homing connections and/or improve the performance of Internet service in multi-homed environments, companies would have a return on investment (ROI) case for buying the product.
There are also challenges. For example, the company is launching a software product at a time when most enterprises are scaling back technology spending. And although it has raised $27 million in equity venture funding from a group of investors led by blue-chip venture capital firm Accel Partners, it is likely to need more money soon to ramp its sales and marketing infrastructure.
-- R. Scott Raynovich, Executive Editor, Light Reading