August - 2000 - issue > Cover Feature

What are “converged” networks, in the first place? The term mainly relates to standardization on the basis of logic (moving from multiple protocols to a standard Internet Protocol), on the basis of payload (with different types of data traveling over the same network), on the basis of the physical details (payloads with different quality specs moving over the same physical wires) and on the basis of applications (with single applications uniting various functions).


Old-line chip manufacturers are rapidly ditching the PC as their main source of growth, and shifting to preparing chips that will drive network convergence. For example, Advanced Micro Devices is moving rapidly to become the world’s largest producer of flash memory in the world: it shipped $750 million worth in 1999, and ended the year by hogging 16 percent of the market. These flash products are put to use by cellular handsets, set top boxes and networking manufacturers.


Now, an AMD veteran is moving behind the scenes to effect major change in the networking sector: Atiq Raza, who was instrumental in developing AMD’s PC microprocessor line, as well as its communications business. Then, last summer, Raza resigned from his positions as president, chief operating officer, chief technical officer and director of AMD, all in one shot. His latest venture, Raza Foundries, is turning out to be camera shy, but relentlessly prolific progenitor of future technologies.
One of its jewels, Vxtel, is just emerging from a 15 month-long gestation where it has been scrubbed and polished every which way. Vxtel has raised almost $15 million to date from Sequoia, TeleSoft and the Raza Venture Fund. (It is currently in the process of closing a third round.)

Converged Networks
CEO Shri Dodani, who has just jumped on board from Carrier Access Corporation, where he was where he was VP of engineering, says that Vxtel has a simple vision: to lead in the convergence of voice, data and video.


Historically, there have been three kinds of networks, one each for voice, video and data. Separate leased lines had to be installed for video, and a combination of leased lines — frame-relay and ATM — worked for data.


The present challenge for telecom firms is to optimize multiple streams of traffic over a single network. The advantages that accrue from a converged network are bandwidth efficiency, lower overall bandwidth requirements, ease of management and the ability to deploy applications efficiently. One of the first applications that will probably emerge is true unified messaging, where a single application can be used to store, retrieve and display different kinds of messages. Thus, voice mail messages can be downloaded as WAV files if a person is traveling. A second promising application is in the arena of voice portals.

The Builders
The firms building these converged networks include Level 3, which has bagged $2.5 Billion from Kiewit Capital to build the fiber optics necessary; similarly, Global Crossing, Sonus Networks and Lucent have put aside any hard feelings to do the same. “IP enjoys a hundred-to-one cost advantage over switched networks,” declares the rather ambitious Level 3 CEO Jim Crowe.


Of the $50 billion being invested in new telecom infrastructure, approximately $5 billion has been targeted at voice-over IP systems.


One of the key features of sending voice over these converged networks is the ability to use specialized algorithms to convert the data into digital signals, massage the signals to remove any aberrations when it travels long distances and finally reverse the conversion process.


This is where Vxtel steps in. The firm, which bills itself as a “Silicon Solutions” company, has developed highly optimized signal and packet processors, in addition to firmware software tools and reference designs. The firm has split up its development efforts based on those classifications. While its headquarters in Fremont does the silicon-level design, their office in office Irvine, California does the firmware development; an office in Boulder, Colorado manages the system-level design; and an office in India specializes in DSP (Digital Signal Processing ) software and tools.


But rather than take on the gigantic beasts already romping through the marketplace, Vxtel intends to be the Machiavellian man behind the throne by selling its products to telecom suppliers. And, ever since the Telecom Act of 1996 opened up the industry to competition, 300 companies have registered as Competitive Local Exchange Carriers (CLECS).

Clarion Call
Vxtel has come up with the algorithms for DSPs that focus on optimizing voice transmission. Currently, most DSPs are generic, in that they haven’t been optimized for one type of bit stream, and do not gel with the next-generation switches that are being developed.


Vxtel claims to have developed a processor design that provides an almost ten-fold improvement over current telephony processing operations. The firm purports to have developed a core platform with two layers that will allow the release of one new product every quarter.


The current focus is on developing voice-over-packet systems supporting thousands of channels across all voice processing applications will probably soon be expanded to dealing with data and video.
Vxtel’s solutions are very early for this field. Its only competitors at the high-end seem to be AMD, PMC Sierra (which recently acquired Malleable Technologies) and perhaps Texas Instruments. At the startup level, SiliconSpice — Vinod Dham’s venture, which has pulled in funding from Kleiner Perkins, and rumored to be in acquisition talks with Cisco — is just shedding its three-year research and development quiet period.


CEO Shri Dodani says that most DSP solutions to date have been generic, when “a certain class cannot be solved in that manner”; Vxtel, on the other hand, has designed its solution specifically for sending voice using IP protocols.

If it executes flawlessly, Vxtel will probably exceed even the ambitious expectations inherent in its illustrious gene pool.

Krishnan Sethumadhavan works in strategic planning for a startup in Connecticut.