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Interview with Cymphonix

Last week, Sandy, Utah-based Cymphonix Corporation ( closed a round of funding from Intel Capital for its gateway appliance technology. We thought it would be interesting to talk to the company about their products and this recent round of venture capital financing, so we spoke to Kevin Santiago, CEO of Cymphonix, and Mike Montrose, VP of Sales and Marketing, of the firm.

Techrockies: Congrats on the round of funding. What’s Cymphonix about, and what are your products?

Mike Montrose: Thank you. Cymphonix creates smart gateway appliances that sit between the firewall and the switch at the network gateway. We look at all the traffic coming in from and out to the WAN and Internet. Our technology integrates multiple security and performance functions, and by converging both of those worlds allows for what we call “event correlation.” Our product allows you to see the complete picture of what is happening in the data stream with regards to the big three – users, applications, and threats. Our mantra is that the biggest current problem in networking is not connectivity—moving data from point to point—but what’s within that data stream. Now that the industry has done a great job of enabling connectivity, users are flooding these resources with data. Some of that data is very powerful, mission-critical information such as key applications and transactions. However, a lot of that data is garbage, such as user-driven time wasters and peer-to-peer activity—people bringing problems into the network environment. For the typical IT administrator, the biggest problem we hear them talking about is their users and the problems they are creating on the network.

Techrockies: How are you different from existing product on the market?

MM: The biggest differentiator is event correlation, which allows us to do very sophisticated network analytics. Unlike single purpose or disparate security and performance devices, we present multiple dimensions of data in one interface to help network administrators manage their network proactively. Our interface makes it extremely easy to gain visibility into what is actually going on your network. Our network analytics provide sophisticated analysis of several dimensions, such as threats, applications running on the network—even identifying very unique, customized applications created for an organization—as well as the whole user dimension. We tie these all together to provide administrators access to the actionable data they need to diagnose their problems. Through our interface, they can also apply controls and policies for optimizing and managing their network. Ultimately, their network runs clean, and is not polluted or compromised with “garbage” data.

Techrockies: It sounds like what you have is an appliance—hardware and software?

MM: We are primarily a software company. We have a branded hardware and software offering called Network Composer and we also license our software to OEM and licensing partners. We sell the Cymphonix appliance as our primary mechanism to move our software to market. Our Network Composer offerings are segmented by user count, with our smaller platform handling 75 users, then 400-, 1500-, and 3000-user options. Those products can also be combined for distributed environments. Currently, we typically handle about 6000 users in distributed environments, through a combination of appliances at various locations.

Techrockies: Let’s talk a little bit about your funding. How did your funding come about?

Kevin Santiago: We connected with the Intel Capital team about a year ago as we were just beginning to work on our Series A round. As you know, Intel, as part of their investment strategy, looks at synergistic technologies that will complement their products and platforms. They went through a due diligence process to see what kind of software they could add to one of the platforms they were developing—the Converged Application Platform. They were looking at applications for the platform that could demonstrate its capabilities. During that search they determined there was synergy with our company. Once they determined that, we moved forward with them on the licensing side and as part of our Series A round.

MM: A lot of Intel’s new technology initiatives are geared toward the convergence of more and more data over IP. This Converged Application Platform, or CAP, is one of Intel’s forays into developing platforms to enable convergence. Even in a normal network, mission-critical traffic is constantly jeopardized. These critical apps will be working fine, then suddenly they don’t. This is especially problematic as our industry continues to move additional functions, such as voice, to Internet protocol. With voice running over IP, “no network” means “no business.” So as more and more of these applications are moved to IP, more intelligence is required in gateway devices to ensure that all of the critical traffic is managed and prioritized. That’s where Intel sees the value. CAP is one of three or four initiatives lining up within Intel as opportunities to leverage XLi Technology.

Techrockies: It looks like this is an extension of a round you closed last May?

KS: That’s correct.

Techrockies: What are you using this round of funding for?

KS: There are two fronts where we’ll apply the new funds. We have some aggressive development schedules we are pushing forward—some advances in our technology that will be exciting to the market. We’re also scaling the technology to larger enterprises, particularly to distributed enterprises, with features to more effectively manage permissions and controls across multiple locations. We’ll also use the capital to continue to fuel our sales and marketing efforts. The challenge that any startup has is how to get out to the marketplace and to let people know what you have. We’ve had great success and will use some of these funds to help us to continue to grow rapidly.

Techrockies: It seems like you started out on the WAN side of things?

MM: Yes, in fact our roots go back seven years ago to when Kevin was one of the pioneers in the wireless ISP industry. He and his team were deploying infrastructure and lighting up communities in the west with wireless connectivity. Back in 1998, as they were trying to use that early equipment to deliver consistent quality to subscribers, they found that there were some unique challenges. One of those was college campuses where they had many student subscribers. This was when Napster was huge, and all of a sudden they found that the students were dominating all of the network resources. To solve the problem, they started to develop the ability to scan the data stream, performing deep packet inspection, to identify peer-to-peer activity—not to cut if off completely, but to shape it to be appropriate to the student subscribers and to free up resources for the rest of the subscriber base. Our core technology—the XLi, or Cross Layer Intelligence—was developed over the years that Kevin was working in these wireless ISP environments. At Broadband Solutions, which was where Kevin was at in 2003, they determined that this XLi Technology was a pretty strong value proposition for businesses. They added a graphical user interface, took it to Gartner’s VAR Vision, and won best of show! This validation of the technology and value proposition resulted in the spin out of the technology into its own company in 2004—roughly two years ago. So our core competency came from the performance side of things—identifying applications and prioritizing them. With that strong core of deep scanning to identify apps, we quickly realized that we could add security functions while we were scanning. We began to reference out to multiple libraries to identify virus activity, spyware, and so-forth—even analyzing and logging web requests to enable content filtering. We then started to apply analytics, which is part of my background, to those security and performance worlds. Prior to this I was with Omniture, and had worked with their SiteCatalyst product. Omniture’s tool provides high-end web analytics to large, enterprise web sites. I was able to help leverage understanding and learning from that industry, and apply some of the relevant principles to this “smart” network gateway solution.

Techrockies: Are you shipping product?

MM: We have been shipping since 2004. We are ramping quickly, with customers and sales personnel located around the country. We’ve deployed to city governments, state governments, manufacturing, and have a very aggressive growth path in education. It’s almost viral where we’re working with school districts, since the value proposition is so strong for them. We’re also in libraries, and have a partnership with Sirsi-Dynix, which has over 24,000 libraries using their products. We’re a key new partner offering for Sirsi-Dynix as they continue to expand their presence into those libraries. We’ve also deployed in healthcare—lots of hospitals—and banks, credit unions, and other financial institutions, who all find that being able to control, manage and report on users is critical. We help them comply with Sarbanes Oxley and HIPPA regulations, and features such as our instant messaging recording are extremely valuable as those customers experience a growing need to manage, record, and document their WAN and Internet communications.

Techrockies: How do you get to market--direct or through the channel?

MM: We get to market exclusive through channel—we’re approaching 400 reseller partners nationally.

Techrockies: Thanks!





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