Here's an article about a company called Actelis which just received another round of venture funding. It looks like a direct competitor. Except for the name of the company, you could almost say this article was written about Elastic. The fact that Elastic's technology is Ethernet-based might give it an advantage. I'd like to see a head-to-head comparison. And if Actelis "bucks the trend" of telecom, Elastic deserves as much.
thestandard.com
<<A Heyday for Actelis
By Vishesh Kumar
Jun 25 2001 09:53 AM PDT
The fiber company's shrewd strategy gets VCs to open their wallets in the 3rd round.
When it comes to the slaughter engulfing the telecom sector, Actelis bucks the trend.
The Fremont, Calif.-based startup, which designs and builds technology that allows for advanced fiber-optic capacity over traditional copper wire, recently raised a $26 million third round of funding from Carlyle Venture Partners, New Enterprise Associates, Walden International and US Venture Partners. And defying a trend that is plaguing young companies in this tough environment, Actelis raised the capital at a higher valuation than its previous rounds.
Using Actelis' technology, Regional Bell Operating Companies (RBOCs) can transmit at speeds between 45Mbps to 155Mbps, comparable to speeds over fiber, using their already-installed copper infrastructure. The company plans to target carriers in second- and third-tier markets, where it could take businesses years to get a fiber connection. According to a study by Morgan Stanley Dean Witter, the majority of U.S. businesses still will not have access via fiber by 2009.
The traditional problem with Actelis' approach has been so-called cross talk, or the interference caused by transmitting such vast amounts of data over copper wire with low capacity. This generally would have caused high error rates. But Actelis has overcome this hurdle. "We get around this using Spatial Division Multiplexing," says chief exec Yuval Baron, explaining that the company has developed an algorithm that allows for error correction, allowing the high amounts of traffic to pass over copper wires without a problem.
Coupled with the company's groundbreaking technology is a shrewd business model. The company addresses a real pain point to real customers. Although the so-called inter city, or long-haul area of most carriers' networks, has been built, the last mile zone that Actelis targets has been a major problem. And rather than sell to the new and recently beleaguered carriers like Level 3 and Global Crossing, Actelis has targeted blue-chip customers; RBOCs and Incumbent Local Exchange Carriers (ILECs) still have money to spend.
Best of all, the company's solution is crafted around understanding its customers' current position. Using Actelis' product, the carriers can leverage their installed base and generate new revenue. "It is very appealing to carriers because it allows them to do more with less," says Anand Gowda, a principal at Carlyle Venture Partners.
Delivering a product that is in tune with a customers' current technology infrastructure was a critical success factor for the wildly successful Cerent, which was acquired by Cisco for $6.9 billion. Rather than buy into the hype of an "all-optical" network, Cerent allowed carriers to leverage off what they already had installed.
Actelis' approach underscores a fundamental aspect of success forgotten during the exuberant days of the communications sector. Great technology isn't enough. Someone has to want to pay you for it.
A classic illustration of fascinating technology that didn't find a market is Corvis. The publicly traded company pioneered the "gee whiz" ultra-long-haul transport market, where its products still offer a longer reach than that of rival Ciena's. Although Corvis' technology probably caused its engineers to high five one another, it didn't address its customers' needs. The stock is now more than 97 percent of its 52 week high.>>
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