Our list of the private companies that showed innovation, ingenuity, and potential for disruption in 2013.

Sarah Thomas, Director, Women in Comms

September 12, 2013

8 Min Read
2013 Leading Lights Finalists: Company of the Year (Private)

Private Company of the Year is a tough category to judge, not only because there are no quarterly financials to compare, but also because of the quality of applicants that enter.

This year was no different as we had a list of more than 20 strong candidates covering all facets of the communications industry. In choosing the finalists, we looked for those companies that may be new on the scene, have raised substantial funding, are challenging the status quo, and could go public or become an acquisition target in the next year to 18 months.

That said, you'll also see some well-established companies on the list that are nominated because they've just had a particularly exciting year.

You can see the full Leading Lights finalist list here. And, here are the seven private companies that made this year's list (in alphabetical order to avoid conjecture).

ActiveVideo Networks Inc.
ActiveVideo has had an undeniably big year in the cable industry. It has racked up wins for its cloud-based IP video and user interface platform, CloudTV, with several prime cable operators, including Charter Communications Inc. and Cablevision Systems Corp. (NYSE: CVC) in the US, Liberty Global Inc. (Nasdaq: LBTY) and Ziggo B.V. in Europe, and Sumitomo Corp. in the Asia/Pacific region.

In the last couple of months, ActiveVideo has also scored deployment deals with several large telco IPTV players in Europe. The list includes Deutsche Telekom AG (NYSE: DT) and KPN Telecom NV (NYSE: KPN). Plus, it's in trials with several more pay TV video providers on both sides of the Atlantic.

ActiveVideo has also ventured beyond service providers this year to ink deals with Net2TV to reach Roku Inc. boxes and with major set-top box makers like Cisco Systems Inc. (Nasdaq: CSCO) and Arris Group Inc. (Nasdaq: ARRS).

The chief reason for ActiveVideo Networks' growth is that it's playing to the heart of two important, cloud-driven TV trends: next-generation program guides and multi-screen video services. Cable and IPTV providers are hell bent on offering both, but neither service has been perfected, which means the middleware company still has more runway to grow. Don't be surprised if you see ActiveVideo Networks become an acquisition target in this upcoming year.

Arista Networks Inc.
A company that can achieve a technology first and give the big players a reason to worry is exciting and worthy of inclusion on our list. Arista Networks Inc. has done both of these things. In May it introduced the industry's densest 100Gbit/s so far, the 7500E, which puts 12 100Gbit/s ports on each card, for a total of 96 per chassis. The advancement put big players like Cisco on notice and convinced some that it could help Arista float an IPO in the near future.

At the same time, Arista is also finding allies in some of the market's big players such asMicrosoft Corp. (Nasdaq: MSFT) and VMware Inc. (NYSE: VMW), its partners in helping customers build an open IT infrastructure.

BTI Systems Inc.
BTI Systems Inc. is one of those companies that has been around for ages and built a solid reputation in its sector, optical transport equipment. What qualified BTI for the shortlist, however, was the new excitement it generated in the past year. Its focus has shifted to software defined networking (SDN) for data center interconnection, which has paid off as it has allegedly received more business from Google (Nasdaq: GOOG) than it can even handle. BTI has also pulled in $90 million in new funding, no small feat for a market in which many of its competitors are struggling with financial pressures. The company has an approximate annual run rate of $100 million or more, thanks to its more than 380 customers.

BTI also recently appointed former Newbridge Networks exec Ken Taylor to its CFO slot. Taylor has a lot of IPO experience on his resume -- that, coupled with BTI's sales growth and recent $10 million funding round suggests that a public offering may be in his new company's future as well.

Embrane Inc.
Embrane Inc. is another company that's burst on the scene to challenge larger competitors in the classic David versus Goliath sense. The startup beat out Cisco and Juniper Networks Inc. (NYSE: JNPR) to ink a deal with hosted services provider Peer 1 Network Inc. for Layer 4 through 7 SDN. There isn't a hotter technology than SDN in the communications industry, so Embrane's early progress is notable.

The company also works with any industry-standard x86 server, something the wireless operators will appreciate, as the promise of SDN is the promise of not being tied to one vendor partner. It's still early days in what will continue to be a hotly contested market segment, but Embrane's progress makes them one start-up to watch.

Guavus Inc.
In the past year Guavus Inc. has emerged as an innovator in the somewhat nebulous big-data space. Well, to be clear, the seven-year old company has been around long before big-data became a big buzz word, but it's making a mark in a segment that's caught the interest of operators across the globe. Guavus raised an additional $30 million in funding this year, bringing its total to $87 million, and then turned around and used the cash to acquire rival Neuralitic Systems.

The company has big competitors, but its claim that it can take its big-data platform from trial deployment to delivering results in six weeks has attracted the interest of European operators, Sprint Corp. (NYSE: S), Verizon Wireless and possible even AT&T Inc. (NYSE: T). It also helps these operators weed through the noise to only extract the data that really matters, especially important given how massive big-data really is.

Optelian may be a small optical component company, but it's a fast-growing one. The vendor has wracked up a growing list of small carrier and cable companies as customers for its Intuitive Packet Optical Networking platform, which combines MPLS-TP based connection-oriented Ethernet with 100 Gb/s transport, ROADM, and WDM, alongside end-to-end service provisioning for the whole bunch.

We are also giving Optelian major points for the number of braniac scientist types on its team (our words, not theirs), including CTO Sheldon Walklin and Dr. Larry Tarof, with the company’s Versawave division, both of whom are former Nortel-ers who have done groundbreaking research in optical.

In addition, Optelian, which has offices on Ottawa, Canada, and Marietta, Ga., has been recognized for its growth track, landing on Deloitte North America’s Fast 500 list and PROFIT Magazine’s list of Canada’s 500 Fastest-Growing Companies, among others.

Sigma Systems
Sigma Systems is this year's comeback kid. Nearly 90 percent of the Service Provider IT (SPIT) specialist's revenues have traditionally come from its service fulfillment solutions for the residential IP video, data, and voice products of its cable and telco customers. But Sigma has spent the past year bolstering its presence with CSPs by building up its portfolio of commercially oriented fulfillment solutions.

In doing so, Sigma Systems has earned a strong reputation in the cable and telco world for such OSS tools as service mediation, provisioning, and activation. It also acquired Tribolt in the summer in order to hold its own against much bigger SPIT vendors like Oracle Corp. (Nasdaq: ORCL) and Amdocs Ltd. (NYSE: DOX).

Sigma Systems' customer roster now includes more than 50 CSPs across the globe, including such big names as Charter, Cox Communications Inc. , Rogers Communications Inc. (Toronto: RCI), América Móvil S.A. de C.V. , and Telus Corp. (NYSE: TU; Toronto: T). With this strong momentum behind it, the firm is poised to sign up more prime customers in the coming months.

What do you think of this year's private companies list? Feel free to weigh in on the message boards below. The Leading Lights winners and latest Hall of Fame inductees will be revealed at the Leading Lights awards dinner, which will be held during the evening of Tuesday, October 1 at the concerningly hip The Out hotel in New York City. (For more details, see Leading Lights 2013.)

We'll party until the wee hours then head over to the Ethernet & SDN Expo, which takes place at the Javits Center, NYC, on October 2–3. (Details and the agenda are on our show site, Ethernet & SDN Expo.)

— Sarah Reedy, Senior Editor, Light Reading

About the Author(s)

Sarah Thomas

Director, Women in Comms

Sarah Thomas's love affair with communications began in 2003 when she bought her first cellphone, a pink RAZR, which she duly "bedazzled" with the help of superglue and her dad.

She joined the editorial staff at Light Reading in 2010 and has been covering mobile technologies ever since. Sarah got her start covering telecom in 2007 at Telephony, later Connected Planet, may it rest in peace. Her non-telecom work experience includes a brief foray into public relations at Fleishman-Hillard (her cussin' upset the clients) and a hodge-podge of internships, including spells at Ingram's (Kansas City's business magazine), American Spa magazine (where she was Chief Hot-Tub Correspondent), and the tweens' quiz bible, QuizFest, in NYC.

As Editorial Operations Director, a role she took on in January 2015, Sarah is responsible for the day-to-day management of the non-news content elements on Light Reading.

Sarah received her Bachelor's in Journalism from the University of Missouri-Columbia. She lives in Chicago with her 3DTV, her iPad and a drawer full of smartphone cords.

Away from the world of telecom journalism, Sarah likes to dabble in monster truck racing, becoming part of Team Bigfoot in 2009.

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