Ethernet start-ups Solarflare Communications and Level 5 Networks will merge, to make 10 Gig Ethernet server adapters that can use low-cost common network cabling.

Solarflare makes 10 Gig Ethernet chips and Level 5 makes network interface cards (NICs). Until now, Level 5's 10 Gig NICs have been fibre-only, but Solarflare's 10 Gig chips for Ethernet switches and NICs use unshielded twisted pair (UTP) wiring. Level 5 NICs also provide protocol offloading and acceleration features.

The combined company will keep the Solarflare name, and is worth more than US$50 million in cash. Prior to the merger, Solarflare and Level 5 had respectively raised $78 million and $39 million in venture capital, respectively. Solarflare investors include Intel and Oak Investment Partners, which is also an investor in Level 5, as is IDG Ventures. (IDG is the parent company of IDG Ventures and Techworld.)

The new Solarflare will continue selling network silicon to switch and NIC vendors, as well as selling Level 5-based NICs to enterprises and channel partners. The company also plans to combine its technologies in developing a 10 Gig Ethernet copper server NIC with advanced protocol and memory handling features. The combined entity will be headed by Solarflare chief executive Russell Stern, and use Solarflare's Sunnyvale, California headquarter., Level 5's office in Cambridge, UK will become a development centre.

The IEEE is expected to ratify the 10GBase-T standard for 10 Gigabit/s Ethernet over copper in June, so users can expect to see 10GBase-T products later this year.

"Today, we're not talking about product announcements," said Stern. "But we would like to be one of the first, if not the first company out there with a high-performance 10Gbase-T NIC." When 10GBase-T products come to market, users could expect per-port pricing as much as eight to 10-times lower than current optical-based 10 Gig Ethernet products, Stern adds.

The new Solarflare may find itself in a situation where it is supplying 10GBase-T physical layer (PHY) components to competing NIC vendors such as Neterion and Chelsio. But "there's a level of co-opetition in most businesses," Stern says. Solarflare also sells chips to switch vendors such as Cisco, Force10, Foundry, Extreme and Nortel, among others.

Founded in 2001, Level 5 has partnerships with Sun, HP, Dell, IBM and Intel. The company's EtherFabric architecture, launched last September, distributes a separate, virtual TCP/IP software stack to each application running on a server (as opposed to all applications having to access a single TCP/IP stack embedded in the operating system). Its hardware is designed to give each application direct access to the memory space on the NIC hardware, thus eliminating the need for applications to copy data to system memory, which causes higher CPU use and introduces latency into server I/O performance.

"The new Solarflare now has a significant software portfolio," with the addition of the EtherChannel technology," Stern says. "We're combining software and Ethernet system expertise, right down to the physical layer. So it’s a great complement," Stern says.