NETWORKS

Solarflare Communications and Level 5 Networks, two leading early stage Ethernet companies, announced today that they have signed a definitive agreement to merge and raise new funding, increasing the cash balance of the new company to over $50 M. The merger was driven by the common vision shared by the two companies to deliver high-performance, cost-effective, standards-based Ethernet products that enable one network for compute, storage, and network traffic. The merged company will be called Solarflare Communications and will retain its headquarters in Irvine, Calif., with development centers in Sunnyvale, Calif. and Cambridge, UK. Russell Stern, Solarflare President and CEO, will head the combined company. Stern is enthusiastic and said, “I’m extremely excited about the merger on several fronts. First, our combined products are highly compelling and satisfy end users’ needs for easy-to-use, standards-based, high-performance Ethernet solutions. Second, this merger combines two highly distinguished and talented teams of engineers with proven track records in physical layer devices, network systems, and protocol software. And finally, we have a proven executive team that can meet the stringent quality and delivery requirements of our OEM and channel customers.” Through this merger, 10 Gigabit (Gb) Ethernet will deliver on its promise to be one ubiquitous network as witnessed by Bob Metcalfe, the inventor of Ethernet: “Ethernet has proliferated and evolved amazingly over the last 33 years, with a quarter billion new Ethernet switch ports shipped worldwide in 2005 according to IDC. Ethernet has evolved from local area network (LAN), to wireless (WiFi), to wide area network (WAN), and most recently to metro Ethernet services. To meet growing demand for speed, Ethernet has gone from 10 Megabit per second (Mbps) to 100 Mbps to 1 Gigabit per second (Gbps), and is now moving inexorably up to 10 Gbps, on its way in future years to 100 Gbps.” In regard to the merger, Metcalfe commented, “Level 5 Networks and Solarflare Communications have been committed to the Ethernet model of standards, performance, and fierce interoperable competition. Combining these two companies will help their data center and enterprise customers to build converged, high-performance networks for storage, network, and compute traffic easily and cost-effectively.” Solarflare is the leading developer of 10GBASE-T chips which enable simple, relatively inexpensive 10 Gb interconnects that leverage the installed base of twisted-pair copper cabling and Ethernet switching infrastructure. Level 5’s innovative, high-performance 1 Gb/10 Gb Ethernet controller technology is consistent with the Ethernet paradigm. By the simple installation of its accelerated Ethernet controllers, server system performance is increased with no need either to change existing applications or to deploy new protocols. Mike Bennett, Senior Network Engineer, Lawrence Berkeley National Lab, California, stated, “The synergies of the technologies behind this merger are self-evident. Both the10GBASE-T and the high-performance controller technology are plug-and-play Ethernet. A 10GBASE-T NIC with the accelerated Ethernet technology represents a significant improvement over non-Ethernet solutions because there will be no need to engineer the link or install new infrastructure. It just works.” Top tier venture capitalists supported this merger and invested in the new company. These include Oak Investment Partners, Foundation Capital, Accel Partners, Amadeus Capital Partners, Anthem Venture Partners, IDG Ventures Europe, and Miramar Venture Partners. Bandel Carano, Managing Partner at Oak, commented, “This merger and the significant level of funding give Solarflare the critical mass and resources necessary to deliver solutions that will accelerate 10 Gigabit (Gb) Ethernet adoption in data center and enterprise networks. This combination removes any doubt that high-performance, high-volume, low-cost 10 Gb Ethernet products are imminent. Solarflare Communications will have a profound effect on the networking industry in building a true 10 Gb Ethernet company.”