Sandvine targets DSL and wireless for future growth

Sandvine is banking that the rising use of deep packet inspection (DPI) software by ISPs will give it a competitive edge in the largely untapped DLS and wireless markets. DPI, also referred to as broadband intelligence, allows an ISP to manage its bandwidth to provide a high quality of service. The system can give an ISP "unprecedented visibility" on network activities, such as the number of online gamers on the network, the number of people making Voice over IP calls and the amount of bandwidth that is being consumed, Caputo said at an investors' conference last year. Cable-based ISPs were early adopters of the company's broadband intelligence solutions, but in recent months Sandvine has won some key contracts with DSL and wireless providers in North America and Europe. Sandvine doesn't reveal the identity of its customers. President and CEO Dave Caputo spoke of the opportunities ahead both in its traditional cable ISP space as well as the emerging DSL and wireless markets during the company's fourth-quarter and year-end financial results conference call last week. "We believe that within four years every major service provider in the world will be at some stage of deploying intelligent broadband network solutions," he said. "We believe that the early adopters among the world's largest DSL and wireless service providers will make their move in 2008. Broader adoption among these service providers could begin as early as 2009, so we are preparing now with increased investment in both R&D and sales and marketing."It will be difficult though to predict the specific adoption cycle particularly for the large telcos and DSL providers. "We've predicted that we will win four to six DSL or wireless customers sometime in 2008 and we're comfortable with that. There's no question that the DSL/large telco market has been slower to move, on the DSL side specifically. But we're seeing no shortage of interest in people wanting to understand the solutions and what types of differences it will make it in their networks," he said during the call. Caputo also identified key trends that Sandvine will capitalize on: a doubling of the broadband market in the next three years; the increased number of applications being delivered over the Internet; the continued migration of service provider networks to 10 Gigabit Ethernet; and the massive investments service providers are making to roll out next-generation networks. However, Sandvine won't have it easy with heavyweights such as Cisco Systems Inc. and others making waves in this market. And with last Thursday's announced acquisition of Sandvine competitor Ellacoya Networks by Arbor Networks, more movement could be afoot in this emerging sector. In a news release announcing the Ellacoya acquisition Arbor noted that its security services combined with Ellacoya's DPI software creates a US$750-million market opportunity in 2008 and could top US$1.5 billion by the end of the decade.

Sandvine targets DSL and wireless for future growth

News | January 21, 2008

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