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ArrowPoint's Smart Switches Turn Cache Into Cash

Internet visitors have no patience. Instant gratification rules, and if a page fails to load in eight seconds or less they're history. One part of the problem lies in the circuitous path from server to consumer -- a journey that one company has made a bit more direct.

ArrowPoint Communications is actually the second Internet infrastructure startup company headed by Cheng Wu, who previously built and sold Arris Networks. When planning ArrowPoint, he determined that backbone and bandwidth were pretty much covered; a less competitive niche was the intelligent delivery of content. So the company designed intelligent switching mechanisms, which, when installed at a Web host or by an ISP, bring up the exact pages that the user requests in the least amount of time.

"Our main function is the ability to route requests to the best sites and the best servers, to optimize delivery back to the user," said director of technical marketing Erv Johnson. "We detect the requested URL and find the best route at that particular time for the fastest connection." In other words, the switches take on characteristics of a weather forecaster and a travel agent to find the best data delivery conditions.

The Arrowpoint solution is available from two directions. The CS-100 line is intended for small- to medium-sized Web sites, while the CS-800 is intended to support high-volume Web hosting, e-commerce, application hosting or other business-critical Internet application services.

After securing $5.5 million in seed money, the company's second round in March 1998 yielded $10.3 million from Accel Partners, North Bridge and Matrix. A $2.4 million mini round followed in December 1998, involving Westcon and NetOne Systems of Japan. The third round took place in March 1999, with $15.3 million coming from lead investors Bowman Capital and Pequot Capital Management, along with Accel, Matrix and North Bridge.

Stan Schatt, a research director at Giga in Carlsbad, Calif., is impressed with the Arrowpoint management and expects the company to "become a very attractive IPO" when they decide to go public.

"Load balancing is a niche, and there will be some others in that market," he said. "But right now, Arrowpoint appears to have the lead. Its switches are a lot smarter. There is a lot of content that is not cacheable, but these switches are able to tell the difference."

"We have been in this segment for the last three years," Johnson said. "And while other companies have recently 'picked up the beat' we have a unique head start."

Company Name: ArrowPoint Communications
Address: 50 Nagog Park, Acton, Mass 01720
Phone: (978) 206-3000
Fax: (978) 206-3200
Contact e-mail address: jford@arrowpoint.com
Web address: http://www.arrowpoint.com
Total Funding: $33.5 million
Investors: Matrix Partners, Venture Partners, Accel Partners, Bowman Capital, Pequot Capital Management


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