In selecting our list of 21 privately held, Boston-area firms worth watching in the coming year, one thing is clear: the rules have changed since last January. More specifically, the rules reverted to what they'd been before the Internet bacchanalia of the late 1990s.

Once again, it takes more than a swank suffix, wheelbarrows of v.c. cash and a Rte.128 address to seal success. A skeptical market has forced companies to focus on that most basic of business concepts -- making money.

It wasn't hard to get swept up, as can be proved by looking at our 20 for 2000 choices. Overall, we're proud of the picks, but we certainly didn't forsee the meltdowns in Internet consulting, e-commerce software and outsourced auctions -- which led us to rank now-struggling companies like Zefer, Mainspring, NetGenesis, Eprise and Fairmarket.

So, keeping in mind our new, old rules, we present "21 for 2001." These firms recently received financing, signed major partnerships or simply have a product or service that fills a need. Other than a strong showing by networking infrastructure companies (eight of which made the cut), it's difficult to discern a trend. So rather than overanlyze the picks, we'll just get to it.

Remember, the purpose of this list is two-fold: to spotlight exciting young companies and to trigger discussion and debate. As always, your comments are welcomed.

21) Clickshare, Williamstown, Mass.

It may be too soon to predict major success for a 10-month-old startup that's banked just $500,000 in venture cash. But we're betting that this company's technology is set to arrive. With online advertising in free fall, Net businesses are pondering how to raise cash while keeping most content free. Clickshare has created an exchange allowing sites to sell premium content -- i.e., a newspaper can sell access to either their back issues or other databases. Better still, consumers can set up one account and buy tons of content from other sites (videos, software, Napster files -- yes, some people will pay for them), without having to pass around a credit-card number or give up personal data. Clickshare is selling a nifty logistical solution to a problem staring content firms in the face.

20) Aprilis, Cambridge, Mass.

This startup aims to revolutionize the way bits and bytes are stored with a single word: holography. Using technology spun off from Polaroid in 1999, it's commercializing high-speed, ultra-high capacity holographic storage, which uses lasers to etch a 3-D image onto a special plastic disk, promising not just higher capacity but data transfer rates many times faster than those of magnetic or optical storage systems. Target markets are enterprise storage, video-on-demand, medical imaging and Web hosting. Aprilis executives tote no fewer than eight Ph.D.s, helping it grab unspecified venture money from Zero Stage Capital last month. It's unclear when Aprilis will begin selling products, but tapping into the multi-billion-dollar storage market can only mean good things.

19) Egenera, Marlborough, Mass.

This startup is young, but it plans to sell something that will always be in demand -- speed. Egenera touts its servers as "the power plants of Internet data centers of the future." It's a bold claim, but if true (the products are still in development) the company will attract a lot of interest from application service providers, Internet service providers and large corporations. In addition to improving processing power, the technology removes configuration and expansion restrictions on current servers. Founded by two former Goldman Sach executives, Egenera raised $20 million in v.c. in October and is gaining momentum. Look for additional financing rounds in 2001 and progress toward a product launch.

18) Dirig Software, Nashua, N.H.

Dependable and understated -- that's Dirig. In sum, there's little here that reminds us of the swagger, smoke and mirrors of last year's highest fliers and hardest crashers. The 3-year-old maker of application and network management software is growing. In May it landed $5 million in v.c.; a month later, it inked a tech partnership with Hewlett-Packard. The trend should continue. Just this week, Dirig unveiled a product for Allaire's popular ColdFusion application. Plus, the company has an experienced CEO in Bob Hoyt. At SSA, Hoyt led sales, operations and marketing -- three crucial areas for a young company with a strong product.

17) Brix Networks, Chelmsford, Mass.

This startup is the first of our eight optical network sector entrants. Brix makes hardware that monitors the performance of these speedy yet expensive systems. It's a good niche because telecom carriers pay penalties if they don't meet up-time requirements laid out in service level contracts. So averting problems can go a long way, both toward the carrier's bottom line and customer satisfaction. After a year in stealth mode, Brix launched in September with $25 million. The company, led by Tom Pincince, founder of New Oak Communications, is adding staff and customers. The trend should continue and even if these are dark times for Cisco, Lucent and Nortel, any one of them could light things up with an acquisition.

16) Predictive Networks, Cambridge, Mass.

This online marketing technology firm has mastered the art of deduction: it tracks the movements of hundreds of thousands of opt-in Web users and applies mathematical models to target and personalize online ads based on where they surf. Predictive doesn't know users' names, just their "digital silhouette." The 2-year-old company has generated $54 million in v.c. to roll out its service to marketers and ISPs. With a system that only targets users who opt in, Predictive appears to do what other e-marketers do not: walk the imaginary fence between privacy advocates and marketers.

15) Wheelhouse, Burlington, Mass.

This startup could adopt a variation on Greyhound Bus Lines' theme: "Leave the e-marketing to us." Founded in late 1999 by former Shiva CEO Frank Ingari, Wheelhouse, which has $66 million in venture backing and 200 employees, aims to help businesses plan and manage "multi-channel" (e-mail, direct mail and telemarketing) campaigns. From developing strategy, to partnering with vendors (such as Vignette, E.Piphany and NetGenesis) that build technology platforms, to managing all databases, software applications and the network itself, Wheelhouse is growing fast by helping businesses deliver personalized ads without getting lost in a technical jungle.

14) eYak, Boston, Mass.

In the two years since it opened, this firm has banked $76 million to develop a service integrating Internet telephony with traditional phone offerings. In addition to deep pockets, eYak is full of operators. Founders David Friend and Jeff Flowers have collaborated on four businesses. Their most recent, FaxNet, sold to Critcal Path for $200 million. The company also added Reed E. Hundt, former chairman of the FCC, to its advisory board. With v.c. money, management's knowledge and connections and a strong product, eYak should be talking about some serious growth in 2001.

13) PhotonEx, Bedford, Mass.

Here's a company making a long-range fiber-optics bet which probably won't take long to pay off. Unlike many optical gear startups helping carriers deliver services or link metro networks to the Internet backbone, PhotonEx is developing equipment to boost the backbone itself. With forecasts predicting a need for up to 1,000 times more backbone capacity to handle growing Net traffic, there's room for this 16-month-old company to move. And with execs hailing from MIT, $88 million in venture capital and a product set for launch this year, PhotonEx looks to be in the right place at the right time.

12) Taqua Systems, Hyannis, Mass.

This 2-year-old Cape Cod firm has a jump on competitors building switches and other equipment to help telecom carriers deliver voice and data traffic easily and cheaply. Ten months ago Taqua bagged $83.2 million in venture backing, and since then it's moved into new Hyannis headquarters, opened R&D facilities in Texas and Connecticut and attracted a CEO from a Lucent networking division. It plans to double its staff this year -- and, boasting products that keep winning industry awards, that's likely to be the least of its accomplishments.

11) iBelong, Waltham, Mass.

With vendors fleeing the Net in droves, it doesn't promise to be a banner year for many application service providers, the companies that rent software through the Web. But iBelong promises to be an exception, selling for monthly fees nifty technology that helps complex organizations (like the AFL-CIO, Avon and the Democratic National Committee) set up portals under their own names and individualize them for thousands of users. Headed by Open Market co-founder Shikhar Ghosh, the 2-year-old startup last year shifted business models, now selling to corporate customers in addition to non-profits. Venture capitalists liked the shift, giving iBelong $22.6 million. We like it, too.

10) Athenahealth, Waltham, Mass.

In a sickly year for health-related Internet firms, this firm was rosy-cheeked, adding customers, partners and staff. And with $30 million in new capital it should do more of the same in 2001. Unlike those struggling in the sector, Athenahealth isn't about content. Rather, it provides billing products that cut outstanding bill time to 43 days from 70. Bottom line? Athenahealth cuts red tape, something the health care industry has been wrapped in for years. CEO Jonathan Bush believes his firm is an attractive IPO candidate. That probably won't happen this year, but if a few managed care groups pick Athenahealth as a standard, the prognosis is very good.

9) ManagedOps.com, Bedford, N.H.

In March, this application service provider scored $50 million in v.c.-- one of the largest cash investments on record for an ASP. ManagedOps used the cash to hire dozens of workers and open a new $12 million, 93,000-square-foot facility, modeled after a 19th century mill building. While it will be hard to top that in 2001, the firm has solid partners in infrastructure (Compaq, Cisco Systems, Citrix) and software (Microsoft, Great Plains, Siebel) and is aimed at mid-sized ($10 million to $250 million) businesses -- far better than serving the small business sector, an attractive but elusive market. Finally, you have to like a company that is ranked both as one of the fastest growing in New England and one of the best to work for.

8) LingoMotors, Cambridge, Mass.

The star of Stanley Kubrick's "2001: A Space Odyssey" was HAL, a mainframe that understood (and ultimately disobeyed) astronauts' voice commands. Three decades later, the promise of talking to computers goes unfulfilled. While that won't change overnight, we believe it will be a breakout year for voice-driven Web sites and LingoMotors. The company banked $16 million in November and has more linguistic Ph.D.s (15) per square foot than anywhere in Cambridge -- including Harvard and MIT. More importantly, its product is unique. While competitors rely on statistical models, LingoMotors's Turbo Search was painstakingly programmed to decipher nuances of language. This year, look for a product launch and customer wins from financial service firms, e-commerce sites and others. Suffice it to say, 2001 will be better for LingoMotors than for Dave and his Space Odyssey crew.

7) Equipe Communications, Acton, Mass.

Here's another maker of fiber-optic equipment that's looking to capitalize on the need for telecom carriers and Internet service providers to handle growing data traffic and add services. Equipe says its first product, the still-in-development "Optical On-Ramp," will allow carriers to do so while keeping their existing infrastructure, which should provide a major market boost. With more than $60 million of v.c. in hand, the 16-month-old startup just expanded its offices in Acton and now has development and test labs fully operational. That means systems are go for Equipe in 2001.

6) Ellacoya Networks, Merrimack, N.H.

If the level of a company's venture capital funding alone guaranteed success, this telecom infrastructure startup would be golden -- it grabbed $86 million in v.c. in 2000, putting it among New England's biggest venture recipients. Alas, funding alone assures nothing (just ask HarvardNet or Zefer), but Ellacoya's business model will help. As telecom providers spend billions on new networks, Ellacoya wants to help them turn bandwidth into dollars. Its hardware and software switching system will enable carriers to deliver revenue-rich services like streaming video or teleconferences. Run by executives from top-notch networking firms, Ellacoya should be a big contender in a multi-billion-dollar market.

5) Spike Broadband Systems, Nashua, N.H.

Five-year-old Spike has found steady business installing its "last- mile" wireless broadband access equipment into homes and businesses in far-flung places like the Philippines and China, where service providers can wire a population at a fraction of the cost of laying fiber or copper. While 80 percent of sales are overseas, the company is also selling to regional U.S. telecoms. The best may be yet to come: Spike expects its equipment (which uses wireless frequencies to connect users to a backbone network) to be in the running for adoption by major carriers like WorldCom and Sprint. With $80 million in v.c., Spike appears poised to be a prime provider in a huge market.

4) GiantLoop Network, Waltham, Mass.

Started last spring and launched in the fall, GiantLoop is going about the optical networking game differently by selling services not to carriers but directly to Fortune 250 businesses. The technology is designed to handle a corporation's high-bandwidth network needs as an outsourced service, much like a company like StorageNetworks handles data storage. A team led by former EMC executives, including CEO Harry Dixon, has already collected $40 million in venture backing and is putting the pieces of its infrastructure service in place, leasing unused fiber and buying gear from Nortel Networks. 2001 should see it making a giant step or two forward.

3) Appian Communications, Boxborough, Mass.

Like a few of its list-mates, Appian is tapping into a hot niche: providing telecom carriers with a way to add profitable services to their broadband networks. The startup closed a $60 million funding round in December, bringing its v.c. total to $80 million. Appian's platform lets carriers use their broadband networks in the same way they've used their phone systems, targeting revenue-generating services aimed at corporate Ethernet users. Will Appian find success? Considering it's entered a market expected to grow to $20 billion by 2004, smart money says yes.

2) Groove Networks, Beverly, Mass.

Groove burst on the scene in October, announcing $60 million in v.c., a hot new product and a hot founder -- Ray Ozzie, who created Lotus Notes in the 1980s and revolutionized collaborative computing. Today it's called peer-to-peer computing, and that's Groove's niche. Its platform lets workers inside and outside a company collaborate with text and voice, allowing them to bypass central servers and collaborate in real-time by linking directly over the Net (a la Napster). Groove has inked dozens of partnerships to distribute its product. Ozzie has high ambitions, saying PC users will eventually have three main communication tools: e-mail, Web browers and Groove. That may be an overstatement, but it's hard to bet against a man whose Notes software has been adopted by 60 million people.

1) Astral Point Communications, Chelmsford, Mass.

It's fitting that a list filled with optical networking companies be topped by one, and Astral Point is a clear choice for Most Likely to Make 2001 Noise. The 2-year-old switch maker's coffers are filled with $113 million in v.c., and it has already cut a $100 million deal to link Time Warner Telecom's metropolitan networks with the Net backbone. Better still, just two months ago rumors of a merger with Europe's No. 2 phone maker, Alcatel, were rife, with figures like $2 billion being tossed around. Mergers may be more likely in this market than IPOs, but Astral Point is likely to do well either as a target or flying solo.