Austin American-Statesman
Mar. 5, 2001

Fourteen months ago, five Austin engineers took a gamble.

Networked personal computers couldn't keep up with the demand for faster connections among each other and peripherals such as printers. The chips that managed PC communications simply couldn't handle the flow of information fast enough.

To address that problem, Intel Corp. proposed a design for a new InfiniBand (or "infinite bandwidth") chip that could move data faster. But rival companies, including IBM Corp. favored a different design. By August 1999, seven companies, including IBM Corp., Intel Corp., Compaq Computer Corp., Dell Computer Corp. and Microsoft Corp., had agreed to develop a compromise.

Just three months later, Banderacom Inc. (then INH Semiconductor) was formed in Austin. A Motorola engineer and four veterans of Austin-based Jato Technologies, a chip startup now owned by Intel, bet they could help gain early market share by developing one of the first InfiniBand chips based upon the standards set by the new trade association.

"Very few companies got the early start we did in this market space. We've got a good year or so head start," said Phil1 Grove, Banderacom's vice president of marketing.

The company released its first prototype chip, the IBandit, in October. The chip is intended to break up the logjam of data flowing between storage and network servers by helping redirect the traffic. InfmiBand technology is designed to allow data to move anywhere from 2.5 to 30 gigabits per second. The IBandit allows the data to transfer up to 10 gigabits per second.

"We decided to go with 10 right away, even though Intel came out with a 2.5 gigabit product," said Grove. " As a startup, we wanted to go with a higher performance solution."

Though Intel is a Banderacom rival, it's also an investor. Intel Capital, the chip giant's venture fund, joined Austin Ventures, Jato Tech Ventures and Austin-based Crossroads Systems Inc. in providing $9 million in funding to the startup. Company executives said they expect to soon close on a second round (of $25 to $35 million.

" A lot of people ask how can they can be a competitor and an investor, but their core business is built on the ]idea of building faster and faster computers," Grove said. "We all realize it's a big market. It's going to take a lot of big and small innovators to make this become main-stream."

About 100,000 servers that support InfiniBand technology will ship this year, with more than 4 million shipping by 2004, according to projections by IDC, a Massachusetts-based research firm.

Austin has developed into a hotbed of InfiniBand technology. Local firm VIEO Inc. develops software to help connect high-performance clusters of computers using InfmiBand chips. And Lane15 Software Inc. has developed software to help manage InfmiBand networks. Last month, the company announced that it would partner with Banderacom to provide software to run on top of the company's chips. Banderacom execs are currently hunting for about 25,000 square feet of office space, a search that has been helped tremendously by the softening in the commercial real estate market. In November, Les Crudele, a director of Quantum Effect Devices, a Santa Clara, Calif.-based semiconductor company, joined Banderacom as chief executive officer through Austin Ventures' entrepreneur-in-residence program. Eric Johnson, the company's founding CEO, remains at Banderacom as its vice president of business development.

This year, the company expects to expand to more than double its current size. For weeks, the company has been advertising for engineers on local radio stations. The company expects to add 60 employees to the 60 it already has in the next six to nine months.

Amy Schatz