Startup Gets $40 Million To Loosen Cisco's Hold

MOUNTAIN VIEW -- A Mountain View startup company has lined up $40 million from an all-star list of industry heavyweights in a bid to challenge Cisco Systems' dominant position as the Internet's traffic director.

Juniper Networks Inc. said yesterday its latest investors include Northern Telecom and LM Ericsson, leading makers of the switches that control telephone networks, and 3Com Corp. of Santa Clara, one of the top providers of Internet equipment.

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Kriens said his startup has a chance to challenge the incumbent because the Internet, which carries computer data, is on the verge of merging with the telephone system.

This change will require new devices that can send electronic traffic -- be it phone calls or e-mail -- without the traffic jams that occur on today's Internet.

But these new devices Juniper hopes to build will also have to track electronic traffic in a new way.

Currently, Internet users are generally charged a flat rate regardless of usage. Internet service providers want to become more like phone companies, and charge users based on such variables as time of day and whether they need guaranteed delivery.

Juniper, which was founded in February 1996 by a technical team led by computer expert Pradeep Sindhu, hasn't showed off how it plans to accomplish this traffic speed up. But the investment by industry leaders puts a stamp of approval on the startup's efforts.

``This is not like brash young kids thinking they can conquer the world,'' said 3Com Chairman Eric Benhamou. ``They have some of the best management and technical people in the industry.''

Kriens, for instance, was a co-founder of StrataCom, a network firm that was bought by Cisco. Sindhu helped design high-performance computers for Sun Microsystems.

Tiny Juniper's big ambitions have not escaped the notice of Cisco, the $6.4 billion giant whose devices are the main traffic routers on the Internet today.

Richard Palmer, director of product marketing for Cisco's Internet business, said the need for a next-generation traffic controller that could handle voice and data and send out bills was such a good idea that Cisco started work on it two years ago.

``The partners that have invested in Juniper have realized they better hustle if they are gonna catch up to us,'' Palmer said.