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Networking - Friday, September 30, 2005

BlueNote Networks - Profile

HQ: Tewksbury, MA

Founded: 2005

Management: Tom Burkardt is Chairman and CEO. He was a venture partner at Fidelity Ventures. He was also Chairman of WaveSmith Networks when it was acquired by Ciena for $172M and he was CEO of Castle Networks, a voice switch company, which Siemens bought for more than $300M.

Investors: In September 2005, Fidelity Ventures and North Bridge Venture Partners invested $8.4M in Series A.

Business Model: BlueNote began when Fidelity Investments began a search for a system that would allow it to run its phone system with all its bells and whistles over IP. No answer was apparent but a VC with Fidelity investments took note, and got permission from the company to launch a startup using Fidelity as the model client and even using Fidelity software. The company, which will be in beta-testing until 2006, will license VoIP-based telephone systems at $100 per seat to enterprises. That compares to an average $500 per seat cost with traditional PBXs.

BlueNote Networks says its software, which includes modules for handling everything from Session Initiation Protocol (SIP)-based call control to applications such as voice mail, video and conferencing, could be used to replace a TDM or IP PBX. The software works with IP phones such as Cisco's. One module provides VoIP network monitoring and configuration and another does connectivity with legacy PBX and public switched telephone network connections, and another module allows traffic to pass through firewalls and gateways.

Competitors: Avaya, Siemens, 3Com

Dirt: At this point, everybody, even tech illiterates, knows that Vonage, Skype and other VoIP companies are putting the hurt on traditional phone companies. Now its time for startups to whack at the enterprise PBX companies. Cisco has sped this process up by making a great IP phone with video. Nobody knows what BlueNote has in store, but we love it that big-brother Fidelity is giving them a start, and that management team seems to know how to spot the green stuff.