Quarterly VC survey: VoIP is hot

NETWORK WORLD NEWSLETTER: CAROLYN DUFFY MARSAN'S ISP NEWS REPORT
09/07/05
Today's focus: Quarterly VC survey: VoIP is hot

Dear networking.world@gmail.com,

In this issue:

* VCs like VoIP companies
* Links related to ISP News Report
* Featured reader resource
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This newsletter is sponsored by Ciena
Network World Executive Guide: Application Drivers: Pedal to the
Metal

This Network World Executive Guide examines the move toward
tighter security, optimized performance and ubiquitous Web
services. Learn about new approaches to securing today's
applications. See what users are doing in their quest for top
performance. And, take a detailed look at present and future
implications of Web services and service-oriented architectures.
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Today's focus: Quarterly VC survey: VoIP is hot

By Carolyn Duffy Marsan

U.S. venture capital firms are betting heavily on VoIP.

In the first half of 2005, venture firms have invested more than
$260 million in at least eight start-ups offering hardware,
software or services for running voice communications over the
Internet.

These figures are from the quarterly MoneyTree survey compiled
by PricewaterhouseCoopers, Thomson Financial Venture Economics
and the National Venture Capital Association.

The MoneyTree survey found that the venture capital industry has
invested $5.257 billion in the overall networking industry -
including hardware, software and telecom services - during the
first half of 2005. The VoIP portion represents about 5% of the
total network industry investment, which is a significant amount
of a single technology.

The biggest VoIP deal so far this year was a $199 million
investment in VoIP carrier Vonage. Vonage has raised a total of
$393 million in six rounds of financing since the second quarter
of 2001.

Other VoIP investments in 2005 include:

* $18 million invested in General Bandwidth, an Austin, Texas
  manufacturer of telecommunications equipment that enables voice
  services across broadband Internet lines for residential and
  business customers. General Bandwidth's G6 Universal Media
  Gateway is an open standards circuit-to-packet platform that is
  deployed in a service provider's switching office. It enables
  voice communications between packet-based and circuit-based
  networks.

* $15 million investment in Teledvance Communications, a
  Louisville, Ky., provider of high-speed voice, data and video
  communications over the Internet. Teledvance's VoIP platform can
  be enhanced with conferencing services, voice mail, Web hosting,
  unified messaging, fax and more. The service is geared toward
  small and midsize businesses.

* $10 million investment in SentitO Networks, an Acton, Mass.,
  provider of carrier-class VoIP switching systems that allow for
  a gradual migration path from legacy systems to IP. SentitO's
  Intelligent Voice Gateway is a scalable, intelligent voice
  services gateway designed for the edge of carrier and service
  provider networks. Built to deliver VoIP transport services, the
  gateway combines media gateway, call control and router
  technologies.

* $7.5 million investment in LiteScape Technologies, a Foster
  City, Calif., developer of enterprise software for IP telephony.
  LiteScape's products extend interactive voice, text and image
  capabilities to telephones and other IP devices. The company's
  products include OnCast, an IP telephony solution, and
  ServicePoint, a customer and employee self-service solutions.
  
* $6.3 million invested in Sipera Systems, a Richardson, Texas
  provider of security solutions for real-time IP applications
  such as VoIP, video and multimedia. Sipera Systems' SaVoN family
  of products applies techniques such as anomaly detection and
  VoIP protocol analysis to protect VoIP networks. Sipera's
  products will be available in late 2005.
  
* $4.4 million invested in LignUp, a Mountain View, Calif.,
  provider of enterprise software that uses the Session Initiation
  Protocol (SIP) for voice applications and infrastructure. LignUp
  products include SIP-PBX, SIP-Centrex, voice mail, unified
  messaging and outbound calling. These applications run on the
  LignUp Communications Infrastructure, a standards-based software
  platform that supports Web services.

* $1.2 million invested in CrystalVoice Communications, a Santa
  Barbara, Calif., maker of enterprise voice communications
  software. CrystalVoice's products include Remote Extension,
  Click-to-Talk and Interoffice Voice Trunking. These products
  allow clear, reliable voice communications to be transmitted
  over the Internet.

Kirk Walden, national director of venture capital research at
PricewaterhouseCoopers, says venture capital firms are
interested in VoIP because it is finally living up to its
promises of lower costs.

"We all know that it's cheaper to do VoIP than traditional
voice," Walden says. "Plus, there is some loosening of the purse
strings at the corporate purchaser side of the market, which is
driving VoIP sales to the enterprise."

The top 5: Today's most-read stories

1. Microsoft warms up voice software plans
<http://www.networkworld.com/nlisp6530>

2. Cisco Catalyst 4948-10GE aces performance tests
<http://www.networkworld.com/nlisp6531>

3. Supermarket chain freezes Internet access
<http://www.networkworld.com/nlisp6532>

4. 2005 salary survey <http://www.networkworld.com/nlisp3854>

5. Katrina tests net service providers
<http://www.networkworld.com/nlisp6533>

_______________________________________________________________
To contact: Carolyn Duffy Marsan

Carolyn Duffy Marsan is a senior editor with Network World and
covers emerging Internet technologies and standards. Reach her
at <mailto:cmarsan@nww.com>
_______________________________________________________________
This newsletter is sponsored by Ciena
Network World Executive Guide: Application Drivers: Pedal to the
Metal

This Network World Executive Guide examines the move toward
tighter security, optimized performance and ubiquitous Web
services. Learn about new approaches to securing today's
applications. See what users are doing in their quest for top
performance. And, take a detailed look at present and future
implications of Web services and service-oriented architectures.
http://www.fattail.com/redir/redirect.asp?CID=112786
_______________________________________________________________
ARCHIVE LINKS

Archive of the ISP News Report newsletter:
http://www.networkworld.com/newsletters/isp/index.html

Wide Area Network Research Center:
http://www.networkworld.com/topics/wan.html
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FEATURED READER RESOURCE
GARTNER'S SECURITY HYPE-O-METER

What is hype and has it influenced your network security
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as much as they seem to be. For more, click here:
<http://www.networkworld.com/weblogs/security/009180.html>
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