Tellabs announced plans to acquire Vivace Networks, a start-up building multiservice edge switches, for $135 million in cash and employee stock options.
The acquisition enables Tellabs to expand into the global service provider edge router and switch market, estimated at $3 billion in 2003 and growing to $5 billion by 2005, according the companies. Vivace is currently shipping two multiservice IP edge switches that combine native Layer 2 switching and Layer 3 routing capabilities, enabling Frame Relay, ATM, Ethernet and IP services to be transported over an MPLS core backbone. The Vivace platforms will be matched with the Tellabs 5000, 6000 and 7000 series of transport and access systems.
The acquisition is expected to close in Q3. Tellabs plans to retain Vivace Networks’ employees and offices in San Jose. Vivace CEO Ken Koenig will become Tellabs senior vice president, advanced data products, and report to Ed Kennedy, president of Tellabs North America.
http://www.tellabs.com
http://www.vivacenetworks.com
- Vivace Networks’ Multiservice IP switches are designed for delivering native Frame Relay, ATM, Ethernet and IP services. The Vivace platform, which is already in deployment by a Tier 1 US carrier, uses five custom ASICs to provide deterministic Layer 2 switching and “hard�? QoS with Layer 3 routing at 10 Gbps rates. The system’s deep packet processing tracks millions of carrier-defined customer flows and provides service differentiation down to the application layer.
The Vivace platform is currently deployed by a Tier 1 IXC in the US for carrying Frame Relay and ATM traffic, as well as by a Tier 1 PTT in Asia for carrying Ethernet.
Vivace’s flagship Viva5100 switch scales to 320 Gbps of full-duplex switching in half of a 7 foot rack. A multi-chassis system could scale up to 256 customer ports at 10 Gbps. The company is also shipping a Viva1050 model with 16 Gbps of port density and measuring 3 rack units in height.
Vivace Networks has raised $120 million in venture funding since its inception in July 1999. Principle investors include Brentwood Venture Capital, Foundation Capital, IVP, JP Morgan, Meritech Capital Partners, Putnam Investments, Redpoint Ventures, Sutter Hill Ventures, and USBancorp Piper Jaffray.
Vivace was founded by Ken Koenig (CEO) and Mitri Halabi (VP Engineering), both formerly of OnStream Networks, a developer of ATM WAN access products that was acquired by 3Com. Its technical team also includes Andrew G. Malis (CTO), who formerly served with Lucent Technologies / Ascend / Cascade, where he helped shape MPLS, IP, Frame Relay and ATM technology.
