Storage Startup Scores $20M

A tiny startup with a bead on creating high-performance data center networks has scored $20 million in financing to take development to the next level.

Paceline Systems Corp. of Chelmsford, Mass., received the funds from a group of investors led by BancBoston Ventures (see SAN Startup Secures $20M). The startup says it will use the money to develop its product and expand its 30-employee business to 80 employees by year's end.

Paceline's plan is to use InfiniBand, a high-speed I/O technology developed by Intel Corp. (Nasdaq: INTC) and others and finalized as a standard this year, into a method for switching data traffic among servers and storage devices in data centers.

Paceline's product will be a switch that uses InfiniBand to link Web servers together, or to link servers with storage devices like high-performance disk drives. "Our switch could be used as a connector for systems, or, more radically, as a replacement for Fibre Channel or Ethernet in data centers," says John Hanratty, VP of marketing and cofounder.

What's this got to do with optical networking? Plenty. For one thing, optical networks need to be attached to computers that can keep up with their accelerated pace. Without high-speed clustering techniques like InfiniBand, today's Web server farms could choke on emerging high-speed services. And that, in turn, could slow applications such as storage networking -- which are cited by service providers and equipment makers alike as key drivers for business in metro networks (see Storage Networks Supernova).Hanratty emphasizes that Paceline isn't looking to eliminate other networking methods. Initially it will be aiming to link servers and storage devices equipped with InfiniBand connectivity. But the company will team with others to incorporate more connectivity into its products. Hanratty cites Crossroads Systems Inc. (Nasdaq: CRDS) as an example of such a company. Crossroads says it's working on a router to convert data traffic from InfiniBand to other types of protocols, such as SCSI, Fibre Channel, and gigabit Ethernet. No delivery date has been set.

Paceline is a new vendor in a brand-new industry. Even the necessary building blocks are just starting to emerge. Intel, which is credited with starting the drive to the spec, still hasn't come up with finished silicon to support development. In the meantime, one other vendor, Mellanox Technologies Ltd., has released several components designed to fuel product development.

Paceline won't say whether it's using Mellanox parts. But spokespeople say Paceline will need to join with a third party in addition to making its own ASICs (application-specific integrated circuits).

Analysts say that Paceline could be ahead of its time. "This market is a difficult one to forecast," admits Bert McComas, founder and principal analyst at InQuest Market Research. Carriers' decision to use InfiniBand in data networks, he says, won't be an easy one, because Fibre Channel and Ethernet are evolving just as fast to support 10-Gbit/s, and in some cases that solution may prove to be a better way to link servers and storage.

None of this dampens Paceline's optimism. Hanratty says this will be the year when servers start to grow Infiniband adapters, advancing the need for switching. "IDC tells us switching will be a $1 billion market by 2004," he says.In addition to Hanratty, who directed business development for systems at Lucent Technologies Inc.