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India/China better markets today for tech startups – Ajit Shelat, SVP, Nevis Networks

Ajit Shelat Nevis Networks
Ajit Shelat, Senior Vice President of Engineering, Nevis Networks

Nevis Networks, a mostly-Pune-based-company (with “official” headquarters in the US, and an additional center in China), builds network switches and other network hardware that allows a company to secure it’s internal network from attacks and to enforce identity-based security policies. The company’s LANenforcer product family transparently protects the network from external malicious attacks, and also allows restricting access to different network resources based on users’ identities according to policies set by the system administrators. This can be customized to ensure different levels of access to different classes of users, employees, contractors, guests and other third parties. In addition, the product allows detailed reporting, auditing, employee activity reports that make it possible to analyze security breaches in very granular detail. And because it is hardware based, all of this is delivered in realtime with very low latency.

Nevis Networks’ customers range from financial services, healthcare, education and defense contractors and they deploy Nevis LANenforcers to protect sensitive network resources and assets, with an intention of reducing the overall costs and time to resolve security breaches and conduct network audits. The company is headquartered in Mountain View, CA, with additional R&D centers in Pune, India and Beijing, China.

The ongoing recession has hit Nevis Networks hard, and it downsized a very large fraction of its workforce late last year. On top of that, on Monday, in a report title “LSI Acquires Manpower Team of Navis Networking”, CXOToday implied that the company (which they alternately identified as Navis Networks or Nevis Networks in the article) had shutdown and the team taken over by LSI. Specifically, this is what CXOToday said:

With recession being an opportunity to invest for big MNCs, LSI Technologies, a provider of innovative silicon, systems and software technologies has acquired the team of Navis Networking based at Pune. With the R&D unit based out of Mountain View, California shutting down, LSI has acquired the manpower of the captive R&D centre in India.

After hearing from PuneTech readers that this report is misleading, we caught up with Ajit Shelat, Senior Vice President of Engineering for Nevis Networks, to learn that the reports of Nevis’ demise have been greatly exaggerated. Here is a quick report of the conversation we had with Ajit:

On the news that LSI has “acquired” the “manpower” of Nevis but not the company.

The report by CXOToday is misleading. What actually happened is much simpler. Due to the economic downturn last year, Nevis Networks was looking to downsize some of its workforce. A friendly interaction between the respective managements of Nevis and LSI led to movement of some of Nevis manpower to LSI. This was a simple case of Nevis ex-employees being hired by LSI en masse. It does not represent any sort of acquisition or even agreement between Nevis and LSI. And these are certainly not the entire team of Nevis Networks India, as implied by the CXOToday article.

In any case, Nevis networks is not shutting down. It continues to execute on a with strategy and focus.

On the current status of Nevis Networks

Nevis networks core team is still there and it is going strong. In fact, the last quarter was quite good and has been the best quarter for Nevis since the inception of the company.

What has happened is that due to the downturn, Nevis shifted its focus away from the US market to the India and China markets, reduced its workforce in the US and in India, and this new strategy appears to be working for them.

On the surprising fact that India/China are better markets than the US market

Since Nevis Networks is selling cutting edge technology, one would have expected US to be the logical market for these products. However, people really underestimate the extent of the effect the economic recession is having on the market there. While the markets really melted around September 2008, the signs have been obvious for at least an year before that, and starting Nov/Dec 2007, Nevis had started planning its strategy of shifting focus away from the US market to the India/China markets.

In tune with their new strategy, Nevis substantially reduced its India workforce. They continue to support existing customers in the US, but new customers are coming mainly from India – which is apparently not affected by the recession as much. In general, it is easier for a company with mainly Indian promoters to sell in India than in other countries.

China is another country where sales are expected to grow – Nevis is in the process of stengthening its sales presence in China. The Chinese market, having a significantly different character, takes a longer ramp up time to achieve its full potential – though a very good start has been made in terms of immediate sales. Like other markets, achieving full potential is really a function of getting the right people on the ground, and building the right relationships and customer confidence. All this effort is justified by the fact that the Chinese market has the potential to scale up dramatically.

More about Nevis Networks

Nevis Networks was founded in 2002 with the intention of building a network security solution with high speed and low latency, using its proprietary ASIC-based technology. As of last year, Nevis had raised a total of US$40 million in three rounds of funding from premier venture capital firms New Enterprise Associates, BlueRun Ventures (formerly Nokia Venture Partners) and New Path Ventures LLC. We are told that their funding situation has recently changed and an announcement to this effect is expected in the next couple of weeks.

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Comments

6 responses to India/China better markets today for tech startups – Ajit Shelat, SVP, Nevis Networks

  1. atul says:

    Cool. Good to hear that Nevis is alive and kicking. I was concerned about the multitude of typos in the press release that announced Nevs’ closure, and it made the news item quite suspicious. Perhaps Nevis should ask the publication for an explanation.

  2. Rajkumar says:

    I too read the article on CXO and it looks totally uninformed
    Good to hear that Nevis is able to get market traction in India and China.
    It is good to see the product still alive and kicking on which we worked previously.

    Ex-Nevis ASIC Engineer
    Rajkumar…

  3. Observe says:

    Nevis Networks Inc., Mountain View, Calif. РThe company, which made a range of products that protect local-area networks (LANs) from unauthorized users, filed for Chapter 7 bankruptcy. Nevis had 165 employees in its heyday, and more than $32 million in backing from some of the venture industry’s top firms: BlueRun Ventures, New Enterprise Associates and NewPath Ventures.
    [from blogs.wsj.com]

    So much for Nevis Networks “going strong” per your interview.

    • navin says:

      As far as I understand it, Ajit Shelat and others pretty much bought out the original investors in a fire-sale. Or, more accurately, the original company has filed for bankruptcy, but a new, smaller company (“Aviram Networks”, which will continue to use the name “Nevis Networks”) has been created and it has purchased the assets of the original company, and will focus primarily on the India/China market. The new company continues to claim that it is doing well under the new management and has a “fresh outlook for success”. However, I do agree with this article that it is rather ridiculous for a company that is teetering on the brink of collapse to claim that it is a “market leader” in anything.

      I would guess that the major change occurred much earlier, when the company downsized a majority of its workforce (as we did mention in our article), and the bankruptcy and rebirth is probably really an accounting change to allow the company to change owners, allow uninterested investors to exit, and write off all the debts of the previous company. (I’m guessing that vendors who were owed money by the original Nevis Networks are now out of luck, because the debts would have been written off as a part of this change.)

      In our defense, we would like to point out that

      • The “going strong” comment was made by Ajit as part of the interview, not by us
      • The main thrust of our article remains true, which is:
        • That LSI has not in fact taken over the company. “Nevis Networks” continues to exist independently
        • They think India and China markets are much better markets for their technology; a statement that should be interesting to readers of PuneTech
  4. Observe says:

    Fair point.

    I’d love to see them selling anything in China. The Chinese are way more innovative and skilled in copying complex architectures. They created networking powerhouses like Huawei. Is there a chance they’d buy anything from Nevis, rather any Indian tech company?

    Indian customers love to meet everyone and evaluate stuff, but hardly buy anything.

    Nevis should probably focus on Western markets as well.

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