April 14, 2000 12:35 PM PDT
Netscape veteran brings smarts to start-up
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SmartPipes, a start-up in stealth mode, aims to solve an age-old problem for corporate customers: how to link their remote offices with the advanced services they need via the fewest number of communications providers as possible. Although details remain sketchy, the SmartPipes service is intended to manage and link the complex systems of separate competing service providers.
The company already has gained the financial backing of an impressive list of investment heavyweights, including former Netscape Communications and Silicon Graphics co-founder Jim Clark; Excite@Home chairman Tom Jermoluk; Kleiner Perkins Caufield & Byers venture capitalists John Doerr and Will Hearst; and David Roux, founder and managing partner at Silverlake Partners.
"I agree there's a tremendous need for (network) unification," said Elliott Hamilton, a telecommunications industry analyst at The Strategis Group. "If they have a solution, they could be successful. But it is a big order. Not only are there a lot of networks, but they're constantly changing."
The phenomenal growth in the communications and networking industries has led to dozens of new networks, scores of start-up equipment providers, and creative ways to use the various technologies.
Many technology companies are cobbling together a combination of hardware and software, calling themselves and their products an Internet "service" rather than linking themselves to a distinct product. This trend, highlighted by the notion that corporations increasingly will outsource their computing tasks to third parties, has created a new industry of services-oriented firms.
SmartPipes will announce further details about its services and plans at the upcoming NetWorld+Interop industry trade show, according to executives. The company is speaking of its strategy only in vague terms for now.
"We see the need for the emergence of a next-generation IP (Internet Protocol) services provider...What we're talking about is the implementation of IP services over multiple networks," SmartPipes chief executive Ray Bell said. "This is the emergence of the next-layer service provider. It's a service company that manages the networks."
Clark's role in building some of Silicon Valley's most high-profile companies has earned any venture he touches a close look. He founded Silicon Graphics, for years the leading company creating high-end computers used for such tasks as animation in Hollywood films.
But Clark is best known for leaving that company to found Netscape along with Marc Andreessen, later taking the company public in one of the Internet world's first explosive initial public offerings. He also helped start medical information Web site Healtheon, which had its own successful IPO early last year before merging with WebMD.
Although SmartPipes has won the endorsement of some significant investors, some analysts say that hardly ensures success.
"Sure, they're backed by some big (venture capitalists), but they're backing everyone," Hamilton said. "To me it doesn't mean anything anymore. They only need one in five to be successful."
The SmartPipes investors and executives comprise a tightly knit group who know each other from various prior ventures.
SmartPipes was founded in October primarily by executives formerly from Cisco Systems, UUNet and Fore Systems. Bell and some of his top management staff crossed paths at Oracle and Cisco, where he worked on directory-based software products.
Clark and Jermoluk know each other from Silicon Graphics, while Doerr and Hearst funded the original @Home Network and currently sit on Excite@Home's board of directors with Jermoluk. Clark and Jermoluk previously invested together in Kibu.com, a Web portal for teenage girls.
The company's board of directors includes Bell, who serves as chairman, Doerr and Jermoluk. SmartPipes has operations in Redwood City, Calif., and Dublin, Ohio.
Communications conduits often are referred to in industry jargon as "dumb pipes"--hence the SmartPipes name.
News.com's John Borland contributed to this report.