Project Management

Corporate Profile: Alteon Web Systems

Alteon recently raised $79 million at an IPO, and has carved out a niche market with server adapters and Web switches. Alteon, whose customer list is a virtual Who's Who in Web sites, is one of the fast-growing small businesses in the U.S.


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Description
Alteon Web Systems is a developer of server adapters and Web switches, which are ultra-fast Ethernet switches with integrated IP traffic-control functions. The company employs 200 people. Customers include corporations, Web hosters, Internet service providers (ISPs), content providers, and e-commerce and portal sites. Alteon was started with $37 million from private investors.

Corporate officers
  • Dominic Orr, president, CEO and chairman of the board
  • Jim Burke, chief financial officer
  • Joe Booker, vice president of operations
  • Selina Lo, vice president of product management and marketing
  • Shirish Sathaye, vice president of engineering
  • Bart Burstein, vice president of business development
  • Tony Narducci, vice president of worldwide sales

Major investors
The company went public in September 1999, raising $79.6 million with their initial public offering.

Market
Alteon’s niche is the Ethernet server switch market, estimated by IDC to be a $1 billion market. The company ranked 47th in the 1999 Entrepreneur and Dun & Bradstreet Hot 100 listing of the fastest-growing new small businesses in the U.S.

Strategic advantages
The company has partnerships with IBM, Lucent, Compaq, and HP. Customers include UUNET, Cable & Wireless, Yahoo, Buy.com, DLJ Direct, Inktomi, CMP, Lycos, Excite@Home, and WebTV.

Sales information
With a fiscal year ending in June, Alteon reported its 1997-1998 sales were $13.57 million, and its 1998-99 sales were $26.3 million in June 1999. Sales grew by a record 62 percent in the first quarter of 1999, and 93 percent in the next quarter of 1999. Alteon showed a net loss of $12.5 million for the fiscal year 1999. Alteon trades on Nasdaq under the symbol "ATON."

What others are saying about Alteon
“Although some companies may just be catching up with IP switching, cutting-edge companies have moved on to URL switching, offered by vendors such as Alteon WebSystems Inc. and ArrowPoint Communications Inc. This new breed of content switch … will allow companies to manage Web content in much more flexible ways. For instance, the cookie in a URL could be used to direct a request to a specific server. Content switching will also enable more effective use of Web caches. By looking at the type of content requested in a URL, a content switch can direct static pages to a Web cache, while dynamic content is served directly from the Web servers. URL switching also simplifies capacity planning because "hot" content can be easily segregated and attended to.”

“What's so great about URL switching?” by Pankaj Chowdhry, PC Week, September 13, 1999

50 Great Oaks BoulevardSan Jose, CA 95119Tel: 408-360-5500Fax: 408-360-5501www.alteon.com
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