NetDevices Nets $25M

Data center startup NetDevices Inc. today announced $25 million in Series B funding to support its rollout of data center consolidation gear.

The round was led by new investor Castile Ventures and included previous investors ComVentures, Columbia Capital, Artiman Ventures, and JumpStartUp. The Series B dwarfs the $15 million Series A which the company picked up in 2003.

The new cash will be used to fill out the startups product line and boost its sales and marketing efforts, according to Seenu Banda, NetDevices’ CEO. The company’s first product, the SG-8 Gateway, made its debut back in June, and Banda is already planning new models. While tight-lipped on specifics, he confirms plans for both higher- and lower-end versions of the three-rack-unit high SG-8 (see NetDevices Intros SG-8 Gateway).

”You should see a fully established product line over the next 12 to 18 months,” says Banda.

The SG-8 is an all-singing, all-dancing data center box, combining a range of security, voice, and network technologies. These include firewall, VPN, intrusion detection and prevention, switching, routing, and voice over IP (VOIP).NetDevices is pushing the SG-8 as a way to help users reduce the number of devices deployed in their networks, thereby cutting operating costs and making life easier for staff. The vendor claims it's a perfect fit for the regional data center.

It's tough to tell whether usrs are getting the message yet. Mark Weiner, the company’s senior director of marketing, won't reveal any customer name or numbers. But he says NetDevices has already sold the SG-8 to medium and large enterprises and Managed Security Service Providers (MSSPs). “There’s definitely knocks [on the door] from very large carriers, too,” he asserts.

New funding could help the startup close some deals. Part of the plan is to use the money to expand into Singapore, while increasing U.S staffing levels and extending European operation from the U.K into France and Germany.

Not surprisingly, all this activity means a serious increase in headcount. Banda expects the firm to boost its workforce from around 135 to 200 within the next 12 to 18 months.

There are still challenges to be faced. Although a number of vendors, including Cisco Systems Inc. (Nasdaq: CSCO) with its Integrated Switch Router (ISR), are looking to combine a bunch of sophisticated technologies onto one appliance, NetDevices is seen as a trailblazer for packing more basic data center functions onto a single device (see NetDevices Packs 'Em In).But, for some users, deploying an all-in-one device at a remote site is seen as a risky business, because if it goes out, so does the site. However, Banda says that NetDevices has taken the single point of failure issue into consideration. The SG-8’s core architecture separates different services, such as firewall and VPN, according to the CEO. “If one service goes down, only that service goes down."

NetDevices has also added a management backplane with dedicated management processors on every linecard to the SG-8. This is designed to let an IT manager access the device even if the control and data backplanes are out of commission.

NetDevices was founded back in July 2003 by three former Cisco execs: Banda, who was responsible for Cisco's midrange routers; Rob Haragan; and Jeff Kidd. Haragan and Kidd also worked on Cisco’s routers and are now the NetDevices vice presidents of engineering.

Are there any plans to go for another round? “We believe that $25 million is a lot of money,” says Banda. “We will probably take our time to think about it.”

— James Rogers, Site Editor, Next-Gen Data Center Forum0