The network processor landscape is sometimes like the "Bring out your dead" scene in Monty Python and the Holy Grail. Every now and then, someone sits up and says, "I'm not dead yet!"

Despite rumors of its demise, Teradiant Networks Inc. is still kicking. But the company is casting a net to find an acquirer, looking to get picked up by a large company, CEO Satchit Jain says.

"The revenue generation is not what expectations were, and it's getting pushed further into the future," he says.

Part of the problem, Jain notes, is that customers are skittish about buying from startup chip firms, because there's too much risk that the company -- and the chip -- will just vanish. Larger companies might cancel new development on the chip but would have the resources to continue shipping the part.

It didn't help that Teradiant had phone problems during the past week. Vice president of marketing Subhash Bal says many callers have been getting a busy signal, the result of some San Jose construction that ruined a telecom cable in the California neighborhood.

Teradiant has developed a 10-Gbit/s traffic manager, having dropped earlier plans for a high-speed network processor (see Traffic Managers Ready for Commute). The part is sampling, but OEMs have been slow to place any volume orders, Jain says.

Traffic managers are chips that administer QOS and enforce service-level agreements inside a system, telling linecards which packets should get sent across the switch fabric first (see Data Center Power Play and Can Traffic Managers Save the World? ). But it's also being integrated into neighboring chips -- the switch fabric, in most cases -- making it tough for a startup to live on traffic managers alone. Besides Teradiant, only Azanda Network Devices has managed to stay afloat as a pure-play traffic manager company, although executives have considered expanding the portfolio (see Azanda Moves On).

Teradiant still faces the problem of landing a good suitor, as many of the big names in network processors have dropped out or halted new development (see Freescale Halts Net Processor Line). Among the public companies, Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC) already has a traffic manager. Integrated Device Technology Inc. (IDT) (Nasdaq: IDTI) has been strengthening its networking portfolio, but the company recently acquired a traffic manager with ZettaCom (see ZettaCom Finds a Home).

Intel Corp. (Nasdaq: INTC) is a possibility on paper but seems unlikely; despite the company's presence in network processors, it's never shown interest in acquiring a switch fabric or traffic manager. "Intel seems to be not wanting to get into that space," says Jag Bolaria, an analyst with The Linley Group.

Teradiant isn't considering pairing up with another startup. Should they change their minds, the pickings don't get much richer, as companies such as Bay Microsystems Inc., EZchip Technologies, and Sandburst Corp. have developed their own traffic managers.

The company's best bet might come down to an OEM. "They could go to an Extreme that wants to do its own traffic manager -- that's one option," Bolaria says.

Teradiant has also laid off five of its sales and marketing staff, leaving the company with 25 employees. Engineering has been left intact, to continue work on a next-generation product, Jain says.

— Craig Matsumoto, Senior Editor, Light Reading

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