Endace moves upmarket with appliance strategy

US and other markets targeted

Network monitoring systems developer Endace will redevelop its technologies into an appliance this year to target a US$1 billion international market.

Marketing vice president Mike Riley says the strategy will allow Endace to move up the value chain, from providing the core card of a monitoring system to delivering the entire system in one appliance.

“That’s what the customers are asking for; a card, Intel server and software that they can plug in and turn on,” Riley says.

He says an appliance product announcement can be expected within the next two months.

New Zealand-based Endace’s main customers are telecommunications carriers, government agencies and financial services companies. It is currently helping one large US interchange carrier pick single packets out of traffic on its 40GB per second backbone, Riley says. Traditionally this would be done by using network cards (NICs), but these do not handle missing data very well.

Endace fixed that problem by making the hardware do the processing through firmware rather than handling this at the protocol level.

He says issues of homeland security have increased the need for carriers to be able to monitor traffic with precision. They use technologies such as Endace’s to comply with US requirements for “lawful intercept” under the Communications Assistance for Law Enforcement Act (CALEA). However, telecommunications interception is just one application for Endace’s technology.

It is also used to implement chargeback for internal network use and to monitor quality of service on the network. For instance, the system can time-stamp individual packets on a network and track their arrival times to ensure network performance is optimised.

Endace is about to embark on a major recruitment drive to attract up to 30 engineers to support its appliance strategy and for further technology development.

The company, which was commercialised out of Waikato University in 2002 and listed on the UK’s AIM market in 2005, makes PCI boards capable of monitoring high-performance network traffic in real-time. Riley says the card market is worth US$100 million a year, but the appliance market is ten times that size.

Endace’s technology was first developed at in the late 1990s by Dr Ian Graham. His was one of several projects that helped Waikato University build an international reputation as a leader in the development of real-time processing technology.

Endace is both profitable and cash-flow positive, Riley says. In fact it’s a very Kiwi start-up, having never gone to market for venture capital funding. It has also received funding from New Zealand Trade and Enterprise.

Riley says engineers are the “fuel” of a company such as Endace. He says the New Zealand education system is producing good candidates because, as in his native UK, we tend to specialise early. The talent coming out of Waikato is also excellent, he says.

Endace will also be focusing on its channel, infrastructure and reach, targeting major systems integrator partners and analytics software makers, as part of its market repositioning.

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