DATAQUEST ANALYST, JEREMY DONOVAN, predicted last year that the security IC market appears ripe for consolidation. With many players, and many more joining the fray, he expected quite a few to wind up and not be found this year. Hifn Inc., which Donovan said commands an 80% share of the IPsec (Internet Protocol security) chip sector, has seen its market capitalization drop to $110 million, from around $500 million a year ago, according to company reports. “The current crop of merchant network processors is largely lacking proper hooks to allow for high-speed encryption and decryption,” says Eric Mantion, an analyst at InStat Inc. in Phoenix.“Security is, in many cases, an afterthought,” Mantion says. “A lot of first-generation network processors have an I/O to the physical-layer side and an I/O to the switch side. But a crucial problem is there's not a single network processor at this point that has a third fast I/O bus for a security processor to tie up to.”

Dwindling markets. Complex technical challenges. And scarce venture funding. Despite these seemingly unsurmountable hurdles, two young “techies” set out to play the market, in Tempe, Arizona. Today, Corrent Corporation has busted myths, crossed hurdles, and has landed its first client: big blue IBM. Just over two years old, Corrent is gaining quick traction with other OEM clients, and founders Satish Anand, Hemanshu Bhatnagar, and current CEO, Richard Takahashi are upbeat about revenues. “Increasing network bit rates have thrown a wrench into the designs of many companies that did just fine at slower OC-3 speeds,” says John Davis, chief systems architect at Corrent. “Once you get above OC-3 and start looking at gigabit rates, the architecture has to fundamentally change. Companies have been trying to add more and more cores to their chip to get more steam out of it. But you can't just keep making the same chip bigger.”

Tough Security Market
How did Corrent manage to work around these challenges? “We bring very strong cryptography technologies, and the experience in applying those technologies in silicon,” says Hemanshu Bhatnagar, a co-founder, who now leads the engineering as a vice-president. The core team brings skills and experience honed at VLSI Technologies (now Phillips Semiconductors), where Anand and Bhatnagar worked, prior to founding Corrent.

“Cryptography,” explains Anand, “is the term for privacy and authentication algorithms, that ensure secure information exchange over the Internet and private networks.” There are many public algorithms in the market: AES, RSA, DSA and so on, which are complex mathematical computations ensuring the three main needs in a transaction: functionality—that secures the process, authentication on either side to clear identities, and non-repudiation—which helps in ratifying the deal, so that neither buyer nor seller can claim that the transaction did not happen. Based on Internet standards, e-commerce security and network security has taken on greater importance, post 9/11.