By Camila Moreira
(Reuters) - Virtual networking company Embrane has won hosting company Peer1 as a customer for its Heleos product, beating out larger vendors such as Cisco Systems Inc and Juniper Networks Inc.
Embrane is one of a number of startups in an emerging and rapidly growing technology segment that has become known as software-defined networking (SDN).
SDN products allow businesses to reduce the amount of networking gear in data centers by replacing much of their functionality with software that is centralized in one or more servers.
"Juniper and Cisco did not have a viable SDN solution that was truly heterogeneous, truly cross vendor," said Greg Rusu, general manager of Peer1's cloud hosting service, Zunicore.
Rusu said the company looked at offerings last summer and liked that Embrane's product was compatible with any underlying hardware.
Juniper said the industry and company strategy had evolved significantly since it discussed SDN with Peer1 almost nine months ago.
A Cisco spokesman declined to comment, but noted the company had introduced a number of new products earlier this month as part of its SDN architecture.
The SDN market is still considered nascent, but is expected to grow to $3.7 billion by 2016 from an estimated $360 million this year, according to research firm IDC.
The technology has been in the spotlight ever since VMware Inc bought SDN startup Nicira in August for $1.26 billion.
Heleos was unveiled in 2011 and has been used in trials by a number of companies. Peer1, which counts Internet telephony company Vonage and blogging platform Wordpress among its clients, is one of the first large customers to buy the product.
IT services company SunGard will be using Heleos as well, Embrane said.
Heleos allows users to create virtual appliances such as firewalls in a matter of seconds instead of days or weeks.
"Network services can be up and running in less than two minutes and capacity can be scaled up or down in less than a minute," Embrane Chief Executive Dante Malagrino said. "We provide the kind of agility at the network level that people expect from computing."
Embrane was founded in 2009 by Malagrino and Marco Di Benedetto, who were part of the founding team of Cisco spin-off Andiamo Systems, a maker of network data storage equipment.
Embrane is backed by Lightspeed Venture Partners, NEA and North Bridge Venture Partners.
(Reporting By Nicola Leske. Editing by Andre Grenon)