Lane15 Lines Up $12M

Lane15 Software has secured $12 million in second-round funding, an amount that the startups CEO says will keep it afloat until InfiniBand -- a market that has taken longer to develop than many in the industry expected -- hits volume in 2003.

“The strategy in terms of what we raised and how we plan to spend it is to support the company until [InfiniBand] becomes a volume market,” says Alisa Nessler, Lane15’s president and CEO.

Lane15, based in Austin, Texas, is creating management software for InfiniBand -- short for "infinite bandwidth" -- a scaleable switched-fabric interconnect technology for servers and storage. The company’s latest funding round has come at a critical point if it is to live to see InfiniBand widely adopted. Analysts expect InfiniBand products, which have received tremendous industry support, to start appearing in the market in late 2002 (see InfiniBand Steals the Show).

New investors in Lane15 include Index Ventures, Quanta Computer Inc. (a Taiwanese notebook PC manufacturer), and Convergent Investors, an Austin VC. Also contributing to the round were some of Lane15's previous investors: AV Labs, Austin Ventures, Dell Computer Corp. (Nasdaq: DELL), Intel Capital, and Lightspeed Venture Partners. [Disclosure: Lightspeed is an investor in Light Reading Inc., publisher of Byte and Switch.]

“We’re looking at spending this Series B round in market development and market deployment, working with partners and preparing ourselves for the volume ramp in 2003,” Nessler says. She adds that Lane15, which currently has fewer than 50 employees, will be staffing up somewhat in the new year.“Lane15 is clearly one of the real players in InfiniBand,” says Gordon Haff, an analyst with Illuminata Inc. He says that once InfiniBand systems ship -- the timing of which is certainly in question at this point -- Lane15's value will be in providing management for multiple vendors’ equipment.

Lane15 has delivered its software to hardware partners -- which include Dell, Intel Corp. (Nasdaq: INTC), Compaq Computer Corp. (NYSE: CPQ), InfiniSwitch Corp., and others -- and recently demonstrated its technology at the Intel Developers Forum (see Lane15 Manages Platforms).

Its primary competitor is seen as VIEO Inc., also based in Austin, whose backers include TL Ventures, BMC Software Inc., and Dell.

Nessler says the big differentiation between VIEO and Lane15 is that Lane15 is a software play. “That’s an advantage, because this market requires people to partner, and they’re going to want to partner with people they think aren’t going to compete with them."

The slower-than-anticipated rollout of InfiniBand can be partly attributed to the slowing economy, but it’s also because “InfiniBand is a big, complicated standard,” says Haff. The industry is crossing its fingers that the upfront work will help it avoid some of the early interoperability problems experienced by Fibre Channel.Lane15 also announced that Bernard Dalle, a partner at Index Ventures, and John Thornton, general partner of Austin Ventures, will join its board of directors.

— Todd Spangler, special to Byte and Switch
http://www.byteandswitch.com