One to Watch: Seaway Networks Inc.

One to watch is a series that profiles young technology companies. It is not an endorsement, but an exploration of the firm’s potential.

Stephen Goodman envisions a day in the not-too-distant future when an ISP can bill its customers based on their specific Internet needs, instead

of through flat-fee subscriptions. He works for a 20-month-old Ottawa startup called Seaway Networks Inc., which hopes its first product will play a key role in bringing pay-per-use to the Internet and virtual private networks (VPNs).

Seaway has engineered a semiconductor chip, the Streamwise SW500, to scan data passing through networks in real time. That function would allow network operators to see how individual users gobble up bandwidth — whether it’s from e-mail, financial transactions or streaming audio/video. Since less bandwidth is needed for, say, a quick e-mail than a MP3 download, ISPs would be able to precisely bill customers based on the resources they’re using.

“”The future of the Internet, I believe, is based on the ability of the service providers, the operators, to bill the users individually for the content that they use,”” says Goodman, Seaway’s vice-president of marketing and business development. “”One of the problems of the Internet — maybe even part of the problem with the telecommunications downturn — is that the Internet hasn’t been able to evolve into what we thought it would be at this time. (That’s) because of the inability to monitor the specific flows of data.””

The chip would be useful in allowing VPNs to offer premium packages to clients needing faster service and more bandwidth for teleconferencing use, says Bob Hafner, vice-president of Gartner Canada.

“”Determining packet types is clearly an important task,”” he notes. “”Right now, every piece of traffic is considered equal. If you’re sending a video stream or an audio stream in a conversation, you’d want to give that priority over some kind of e-mail or data transfer that may not be time-sensitive.””

But that’s not all the chip — slightly smaller than a man’s palm — can do. The semiconductor could also help ISPs deal with security issues, since it can look at information exactly as it goes through a network. Gatekeepers would then be able to stop a virus, hacking or denial-of-service attack in mid-data stream.

The 13 engineers who formed Seaway Networks in January 2001 seemed to realize they were onto something. They broke away from Nortel Networks — which originally commissioned the semiconductor — before the project could be axed in the massive corporate restructuring and layoffs of last year.

Now, that group of lucky 13 has expanded the company to 42 employees. This year, Seaway received $18 million in first-round venture capital funding from three firms. Seaway plans to unveil Streamwise for product sampling by year’s end to manufacturers like Nortel and Cisco Systems, who can install the chip in firewall boxes and network chassis infrastructure, like blades. However, Goodman adds that the company is willing to license use of the chip out to lesser-known firms.

“”There’s a lot of utility in up-and-coming companies . . . who are willing to, at risk, develop the next generation of products,”” he says. “”They’re very important to us as well, because some of them are going to be there when the economy rebounds.””

But Andrew Cole, spokesperson for Bell Sympatico, suggested the chip might ultimately be of service to the telecoms themselves, since it would help the ISP industry cook up new billing schemes to better reflect the evolving nature of Internet use.

“”This (chip) certainly sounds interesting,”” he says. “”We obviously have to gauge the amount of content our customers are using, because there is a small percentage using a disproportionate amount (of bandwidth). If there was a tool that allows for ISPs to differentiate the content customers are using, without actually determining the actual content itself, it may make for an interesting evolution in pricing.””

Ottawa correspondent Zachary Houle is a regular contributor to


Previously in “”One to Watch””:

Analog Design Automation Inc.
Gavagai Technology Inc.


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