Certeon Ascertains $15M

WAN optimization startup Certeon has scored $15 million in a Series B funding round, helped in part by new investor and Lucent ex-CEO Richard A. McGinn. (See Certeon Raises $15M.)

The new round brings Certeon's total funding to date to $27 million. The company will use the money for expansion of global sales and marketing.

RRE Ventures led the round, and Sigma Partners, Globespan Capital, Dow Employees' Pension Plan, and the Union Carbide Employees' Pension Plan also contributed.

McGinn of RRE will now sit on Certeon's board. This indomitable exec's reputation precedes him: As the head of Lucent in October 2000, he took the fall when that company hit financial woes and accounting mishaps. (See McGinn: McGone and Farewell, Lucent.)

Nonetheless, Certeon's delighted to have him aboard. "We are extremely fortunate to have someone of Richard's caliber involved with us," says Certeon CEO Peter Dougherty.So far, Certeon, based in Burlington, Mass., and in business since 2003, has roughly 50 customers and about the same number of employees. Its claim to differentiation from a slew of WAN optimization players is its support of SSL encryption, along with the ability to optimize application-layer traffic without merely resorting to caching.

"We think of caching as a technology that's good for static data. Certeon is more focused on dynamic data. Caching [alone] wouldn't give you the freshness that mission-critical applications require," says Dougherty.

Certeon's customers include Energizer, Hubbell Lighting, Ideal Aerosmith, Microsoft, St. Jude Medical, and Softchoice. The startup claims its S-series appliances are especially suited to situations where remote files are frequently accessed. It tracks changes made to documents that are remotely accessed and sends only the changes in compressed and encrypted form over the network.

Certeon's technology supports Microsoft and CIFS applications, along with EMC Documentum and some other content management packages. Certeon's gear seems particularly tailored to Sharepoint and Office applications. An endorsement from Microsoft describes the S-series' use of "blueprint" technology to optimize Sharepoint and Office for remote Microsoft customers. This refers to the appliance's ability to track specific protocols and semantics of these applications and apply packet compression and acceleration geared to those characteristics.

"Certeon's acceleration solutions uniquely understand these applications to maximize their inherent scalability and performance without disrupting the customer experience or exposing mission-critical data," asserts Charles Ofori, senior program manager with Microsoft IT in an online statement. Microsoft uses Certeon boxes to facilitate Sharepoint services it uses to support big enterprise customers.Of course, other WAN acceleration products have their own claims to fame, and many players make much of their ability to reduce bandwidth usage and speed response time. (See Responding to Poor Response Time and WAN Optimization Forges On.) In addition, a few, including Riverbed, boast SSL support.

But there's a lot of demand for this kind of product, as the sheer number of suppliers attests. Ongoing pressure from Riverbed and Packeteer, along with Juniper, Blue Coat, and Cisco isn't stopping Certeon and other smaller players.

"Id classify Certeon with Silver Peak as a vendor with a couple of extensions -- in Certeon’s case, SSL handling and specific application support -- that have strong appeal to some parts of the market," writes analyst Steve Steinke of the 451 Group in an email today. "Certeon’s choice to support content management apps, such as Documentum, is interesting in that ECM is not an obvious target, but enterprises that use it really need it."

Notably, Silver Peak garnered $17 million in its own round in January. (See Silver Peak Pockets $17M.)

Dougherty says Certeon isn't yet profitable, but he hopes it will be within the next 24 months. After that, the CEO isn't averse to a couple of scenarios, especially given the segment's volatility. (See Citrix Grabs Orbital Data.) "The ultimate goal is IPO, but if somebody makes us an offer we can't refuse along the way, so be it," he quips.— Mary Jander, Site Editor, Byte and Switch