Topspin Aces $20M Round

Topspin Communications Inc. today announced it has secured $20 million in a third round of funding, sending another signal that InfiniBand can make a place for itself in the enterprise.

Meritech Capital Partners led Topspins oversubscribed third round of funding. All investors from the second round -- Accel Partners, Advent International, Duff Ackerman & Goodrich, Presidio Venture Partners LLC, and Redpoint Ventures -- were also involved in round three.

Topspin has raised more than $67 million since its inception in April of 2000, and CEO Krish Ramakrishnan said he expects the current funding will take the company through profitability in around 18 months.

“I don’t see the need for another round,” Ramakrishnan says. “I think this will take us to cash flow position, and we’ll see that in the middle of ’05. We can last that long. They [investors] realize we are in a revenue stage and getting a lot of revenue from our customers... In the last year or so, it’s been hard for any startup company to gain traction, and we are gaining traction.”

He notes that Topspin plans to use the money to expand its sales and marketing operations and support its growing business.Topspin’s latest funding comes six weeks after IB competitor InfiniCon Systems Inc. raised $15 million to bring its total investment to $48 million (see InfiniCon Corrals $15M Round). InfiniBand has had its ups and downs over the past two years, but has settled into the narrow high-performance computing (HPC) and database clustering market.

“In the last six months, InfiniBand seems to have found itself,” analyst Arun Taneja of the Taneja Group says. “It seems to have found the corner or the niche that applies to it rather than being all things to all people as it was trying to become at one time. I believe InfiniBand has a role -- particularly in the so-called Adaptive Infrastructure from Hewlett-Packard Co., the N1 initiative from Sun Microsystems Inc., or IBM Corp.’s Computing on Demand.”

Taneja says the InifiBand market has been reduced to a three-horse race among Topspin, InfiniCon, and Voltaire Inc.

“There’s enough market for two players, maybe three,” he says.

Topspin’s strength in that market has been with OEMs. It announced OEM deals with Sun and RLX Technologies Inc. over the past eight months, and Ramakrishnan says he will announce at least five more OEM or reseller contracts in the next few months.In March, Sun selected Topspin to provide Fibre Channel and Gigabit Ethernet I/O cards that connect SANs and LANs to 10-Gbit/s InfiniBand-based servers. RLX chose Topspin to provide software, hardware, and systems for its IB-enabled blade server for high-performance computing in June (see Sun Circles Topspin and Topspin Teams With RLX for IB).

Topspin, which has 60 employees and is based in Mountain View, Calif., offers two configurations of its switched computing system. The chassis-based Topspin 360 and the slim 1RU Topspin 90 use IB fabric switches with Ethernet and Fibre Channel Gateway modules, and host channel adapter and software.

“InfiniBand, and the way we use InfiniBand technology, is alive and well,” Ramakrishnan says. “The trend today is customers are going after a wire-once platform. They can wire once with InfiniBand and connect the gateways.”

Topspin also announced today that the Air Force Combat Climatology Center in Asheville, N.C., selected its server switch as the fabric for its new weather data network. The AFCCC system runs an Oracle 9i RAC database with a Topspin 360 Server Switch, Topspin Fibre Channel gateways, ProMicro servers with Topspin InfiniBand HCAs, EMC Clariion storage, and Texas Memory Systems RamSan 220 solid state storage.

— Dave Raffo, Senior Editor, Byte and Switch