Procera's Q1: 39% of Revenues from Cox and Shaw

 

In its recent SEC filling (here), Procera Networks reports that "For the three months ended March 31, 2013, revenue from Cox Communications, Inc. represented 22% of net revenue and revenue from Shaw Communications, Inc. represented 17% of net revenue, with no other single customer representing more than 10% of net revenue. For the three months ended March 31, 2012, revenue from Shaw Communications, Inc. and Cox Communications, Inc. represented 21% and 20% of net revenue, respectively. Revenue from a third customer represented 12% of net revenues for the three months ended March 31, 2012, with no other single customer representing more than 10% of net revenue".

This translates in to the following revenues:

	Q1, 2012	Q1, 2013
Total Revenues ($M)	12.3	14.1
Cox Communications ($M)	2.5	3.1
Shaw Communications ($M)	2.6	2.4

How much Shaw Communications Spent on DPI?

Procera Networks filled its 2012 annual report to the SEC (here).

According to the report, "For the year ended December 31, 2012, revenues from one customer, Shaw Communications, Inc., represented 16% of net revenues, with no other single customer accounting for more than 10% of net revenues. For the year ended December 31, 2011, revenues from two customers, Shaw Communications, Inc. and Jet Infosystems, represented 27% and 12% of net revenues, respectively, with no other single customer accounting for more than 10% of net revenues. For the year ended December 31, 2010, revenue from one customer, Cox Communications, Inc., represented 11% of net revenues, with no other single customer accounting for more than 10% of net revenues".

This translates into $21.5M revenues from Shaw in two years. At the end of 2012, Shaw had 1.9M Internet subscribers.

Jet Infosystem ($5.3M) seems to be related to the Vimpelcom deployment (see "Vimpelcom [Russia] Deployed Procera to Manage P2P Traffic" - here)

Procera Receives $1.5M Appliance Order from US MSO

   
Procera Networks annouced it has received "a $1.5 million follow-on order from a leading North American MSO. The order includes the delivery of Procera’s PacketLogic 8920 (here) ..  Procera expects to recognize the revenue from this in the third quarter of 2012 .. The PL8920 is a highly scalable 2RU appliance supporting up to 50 Gbps of network traffic throughput accessible through six modular I/O slots that are configurable with up to 12 x 10GE or 24 x 1GE interfaces. This configuration represents 25 Gbps of throughput per rack unit, setting a new industry benchmark for IPE/DPI platform throughput density".

A known US MSO customer of Procera is Cox Communications (see "Procera: Cox Generated $2.2M in 2010" - here and "Procera Gets $3M Follow-on from US MSO; Customer Monitors Netflix and IPV6"- here).

Cox was also indirectly mentioned as a customer for Procera's high-end platform, the PL-20000 (here).

See "Leading North American MSO Selects Procera’s PL8920 for Network Expansion" - here.

[Update] Cox: "No plans for Usage-based billing; Message was a Mistake"

 
I reported yesterday that Cox Communications may be preparing for Usage-based Billing (charge overage fees over today's data caps policy), based on a message seen by one of its broadband subscribers (here).
 
Todd Spangler reports to Multichannel News that Cox has no plans to do it, according to Cox's spokesman Todd Smith (pictured): "It was completely an error that was posted .. We have made no change to our existing policy .. Cox will continue to evaluate service delivery and billing options as the industry and needs of the customer evolve".

See "Cox: Still No Plans For Usage-Based Internet Fees" - here.

Does Cox Prepare for Usage-based Billing?

 
Will Cox Communications move from data caps to metered usage, with overage fees?
 
Karl Bode reports to DSLReports that "..a user offers up the screenshot below from the company's own usage tool that indicates Cox will ultimately begin billing users for passing their cap. Customers are informed that the allowance portion of the meter website "shows the amount of data usage included in your plan each billing cycle," and that users can consume more, but "will be billed for any amount you use over your allowance .. Cox currently imposes caps on their service but it varies by local market competition, regional congestion and tier -- all broken down here".

Cox uses Procera's DPI equipment (here), and the company announced a number of orders received from Cox, recent one this week (see "Procera Awarded $2.5 Million Fourth Follow-On Order by Tier-1 US MSO for Continued Network Expansion" - here).

 

See "Cox Will Begin Charging Overages - At Least According to Their Own Website" - here.

US ISPs Agreed to Combat Major Cyber Security Threats

While US ISPs get ready to fight piracy by watching for illegal content downloads (here) they have also agreed to ".. better secure their communications networks and protect consumers and business".

  

An FCC press release announced that ".. an industry advisory group for the Federal Communications Commission (FCC), the Communications, Security, Reliability, and Interoperability Council (CSRIC), unanimously adopted recommendations for voluntary action by Internet service providers (ISPs) to combat three major cyber security threats, including botnets, attacks on the Domain Name System (DNS), and Internet route hijacking .. Chairman Genachowski applauds voluntary commitments by nation’s largest Internet Service Providers, including AT&T, CenturyLink, Comcast, Cox, Sprint, Time Warner Cable, T-Mobile and Verizon".

• Under the Anti-Bot Code, ISPs agree to educate consumers about the botnet threat, take steps to detect botnet activity on their networks, make consumers aware of botnet infections on their computers, offer assistance to consumers whose computers are infected and collaborate with other service providers that have also adopted the Anti-Bot Code
    
• DNSSEC is a set of secure protocol extensions that prevent such fraudulent activity
    
• CSRIC recommended an industry framework to prevent Internet route hijacking, which is the erroneous routing of Internet traffic through potentially untrustworthy networks 

Some examples from other countries: Sri-Lanka, Nigeria, Egypt, India, Korea, Argentina. AT&T also announced several security initiatives (here , here and here).    

See "FCC advisory committee adopts recommendations to minimize three major cyber threats, including an anti-bot code of conduct, ip route hijacking industry framework and secure DNS best practices" - here and more details (here).

Vendor Review: Procera Launches 100GE DPI Device and Shares Market Insights

 
Procera Networks is announcing today the latest addition to its DPI devices, the PL-20000, the first in the industry to have 100GE interfaces. To understand the needs who led the company to come this early with the 100G device, I spoke with Cam Cullen (pictured), VP Global Marketing for Procera. Cam went beyond new product story and provided me with an updated view of the recent trends they see in the DPI market.

Cam explains that their biggest customers (see "Procera: Cox Generated $2.2M in 2010" - here) are looking for high-capacity and high port density in DPI-based, policy enforcement devices. Some need large number of 10GE ports (72, for the PL-20000), some ask for 100GE ports, now.

Prospects are saying "if you have it now, I'll buy" Cam says. Cam expects the PL-20000 will start selling in Q2 with 10GE ports, and during the 2^nd half of 2012 for the 100GE equipped devices (although trials will begin earlier). Other performance parameters (number of subscribers etc) are updated too, and may be seen in the chart below.

As can been seen by the product's picture, Procera continues to based its hardware on ATCA.  Although ATCA chassis are based on 40G backplane, a number of vendors now support 100GE ports (see an example - here).

Performance is not just the number of ports and ability to process traffic. Interaction with PCC and subscriber management systems is extremely important as well, and Procera measures now performance in two dimensions - Gbps and TPS - over the control plane (transaction per second of Gx, Gy, RADIUS and similar interfaces). Cam claims that Procera outperforms its competitors in both dimensions.

One reason for Procera success (the company confirmed recently they will doubled their annual revenues in 2011, to $40M -here) , according to Cam, is their simplicity in setting up a full solution (data and control planes). Customers need and require now to apply new services in a matter of weeks "the competing products are complex", says Cam.

On other matters:

• Market Trends - operators look now for solutions that will help them understand what's happening on their network, implement "intelligent charging", and offer application-aware service plans that prioritize certain applications.
  
  An example that is expected soon is the US Super-Bowl, that will, for the first time, be streamed live to iPads, Verizon mobile phones and NBC web site and later this year the 2012 London Olympics will set a similar challenge and opportunity.
   
• US fixed Operators - Procera does see the opportunity there. After so many years of putting traffic management on hold, they expect some traction in 2012.
  
  If appears that fixed services operators are adapting the 3GPP PCRF-PCRF model (and the Gx/Gy Interfaces) for their fixed services as well, based on the good experience and vendors relations they accumulated in the mobile side of business. Procera sees RFPs asking for 3GPP based solutions by US and international operators.
    
• Congestion Management - Cam believes that we will see more cell-aware congestion management solutions this year. Current solutions are still somehow limited (either by network architecture or the solution performance) but new solutions will be show up this year. 

See the press release - "Procera Launches the PacketLogic™ PL20000, the Industry’s First 100GE-Capable Intelligent Policy Enforcement Solution" - here.

DPI Win: Procera Gets $3M Follow-on from US MSO; Customer Monitors Netflix and IPV6

   

Procera Networks announced a "a $3 million follow-on order from a Tier-1 US MSO" (usually refers to Cox Communications see "Procera: Cox Generated $2.2M in 2010"- here);

According to the press release, the customer is "expanding deployment of Procera's PacketLogic solution set across more geographies for this service provider .. One area in particular that this customer has been monitoring is Netflix and video streaming  and they are now actively managing capacity and capabilities with the information provided via PacketLogic Report Studio [here] .. The customer is also beginning an IPv6 deployment, for which Procera is providing new analytics and data feeds into existing security solutions to save the operator on CAPEX for new IPv6-capable solutions in existing routers".

See "Procera Awarded $3 Million Follow-On Order by Tier-1 US MSO to Support Network Expansion" - here. See also "Procera News - $6M Follow-on Deal" - here.

Who Shapes Traffic in the US?

   

New technology, developed by Partha Kanuparthy (picture) and Constantine Dovrolis from Georgia Institute of Technology, allows to detect if ISPs are using traffic shaping,

See "End to end Detection of ISP Traffic Shaping using Active and Passive Methods" - here.

"First, we develop an active end-to-end detection mechanism, referred to as ShaperProbe, that can infer whether a particular path is subject to traffic shaping, and in that case, estimate the shaper characteristics. Second, we analyze results from a large-scale deployment of ShaperProbe on M-Lab over the last few months, detecting traffic shaping in several major ISPs. Our deployment has received more than one million users so far from 5,700 ISPs. Third, we modify the Shaper-Probe detection algorithm so that it can be applied passively on the traffic of any TCP-based application".
So which ISPs are using traffic shaping? 4 case studies are presented in the paper; see also the table below:

• Comcast - "We observed many shaping configurations in our observations between October 2009 and May 2011" (no need to repeat the Sandvine-Comcast history)
   
• Road Runner - "94% of upstream runs did not detect shaping, while 64% of downstream runs found shaping"
   
• Cox - "we found Cox to have a significant number of upstream shaping detections of 20%" (see - "Procera: Cox Generated $2.2M in 2010" - here)
   
• AT&T - "We look at properties of the 10% of AT&T runs which were diagnosed as shaping.. we see that about a third of these runs show a strong shaping rate mode and an associated burst size mode"

Procera: Cox Generated $2.2M in 2010

   

Procera Networks announced its results for 2010 (see "Procera Networks Announces Fourth Quarter and 2010 Year End Results" - here - similar to the preliminary results announced in January).

In its 10-K SEC filling, the company states that "We are currently not dependent on any single customer. For the years ended December 31, 2010 and 2009, revenue from one customer (Cox Communications, Inc.) represented 11% and 44% of net revenues, respectively, with no other single customer accounting for more than 10% of net revenues" (here).

This translates into revenues of $2.23M in 2010, vs. $8.86M in 2009, of which ~$500K generated in the 2nd half of 2010 (See "[Update - 10% Customer:Cox] Procera Reduces Revenue Guidance" - here).

Security as a Broadband VAS

  
Interesting article by Greg Masters, SC Magazine, "Should ISPs take responsibility for exploits?" - here.

"Is the ISP a pipe or conduit or should it be responsible for fixing problems?" asked Craig Spiezle, executive director of Online Trust Alliance, a nonprofit that seeks to enhance the security of e-commerce and online services .. He also spoke admirably of his personal ISP provider for sending warnings when his son's computer was infected, which provided instructions for remediation. Web providers such as Comcast and Cox Communications have rolled out similar programs. Other ISPs believe it is not their job to fix machines, he said."

Related posts:

• Australia: ISPs Should Detect Virus Infected Computers - here.
• TalkTalk Uses Huawei to Detect Malware - here  
• Virgin Media [UK] Helps Customers to Fight Malware - here

 

 

[Update - 10% Customer:Cox] Procera Reduces Revenue Guidance

 

2 days ago I posted a report on Procera's Q2 earning call (here). Since then Procera had filled its quarterly report with the SEC (10-Q form - here).

The report has information about Procera's 10% customers, as follows:

"..  for the year ended December 31, 2009, revenue from one customer accounted for 44% of net revenue with no other single customer accounting for more than 10% of net revenue. For the three and six month periods ended June 30, 2010, revenue from that same customer represented 23% and 21% of net revenue, respectively, and for the six month period ended June 30, 2010, revenue from another customer represented 11% of net revenue, with no other single customer representing more than 10% of net revenue. Moreover, the proportion of our revenues derived from a limited number of customers may be even higher in any future quarter"

Further in the document we can see that Cox Communications is disclosed as the 2009 44% customer:

"For the three and six month periods ended June 30, 2010, revenue from one customer (Cox Communications, Inc.) represented 23% and 21% of net revenues, respectively, and for the six month period ended June 30, 2010, revenue from another customer represented 11% of net revenues, with no other single customer representing more than 10% of net revenues. For the three month period ended June 30, 2009, revenue from three customers represented 29%, 14% and 10%, of net revenues, respectively, and for the six month period ended June 30, 2009, revenue from three customers represented 20%, 15% and 12%, of net revenues, respectively, with no other single customer representing more than 10% of net revenues."

So revenues from Cox were $8.9M in '09 and $1.7 M in H1 of '10, totaling to $10.6M. Cox seems to be the customer behind the $9.9M tier-1 orders announced in "Procera Networks Secures Large Follow-on Order" - here.