Intel, Global Crossing Invest in UM Vendor Tornado

SAN FRANCISCO (06/12/2000) - U.S unified messaging specialist Tornado Development Inc. announced Monday both Intel Corp. and Global Crossing Ltd. have invested in the company as part of its fourth round of venture capital funding valued at US$28 million.

The financing arms of Intel and Global Crossing were two of the four principal investors, whose contributions accounted for 75 percent of the funding, according to Jeff Scheinrock, chief executive officer of Tornado Development.

Currently attracting a lot of interest, unified messaging is a technology that enables users to access their e-mail, voice mail, fax and pager messages from a single phone or Web mailbox.

"It (the investment) is a very positive move for the company; they're finally getting recognition," said Ken Landoline, vice president and director of telecom research at Robert Francis Group, a Westport, Connecticut-based advisory services company for chief information officers at Fortune 2000 and midrange companies, in a phone interview Monday.

"Unified messaging has been hot in the market for three years, but nothing much has happened, as companies have been trying to get the best product out there and reach the best price points for the end-user," Landoline said. "We are now at the cusp of those two pieces coming together."

Last month, network backbone provider Global Crossing announced a strategic agreement with Tornado Development to offer a unified messaging service based on Tornado Messenger, Tornado Development's unified messaging engine. The arrangement would see Tornado Messenger become Global Crossing's exclusive unified messaging platform for the whole of its fiber-optic network.

"Global Crossing is the first major telecom to offer unified messaging," Scheinrock said in a phone interview Friday. "The contract will expand the acceptance of unified messaging and make it happen a lot faster."

Other global carriers are close to signing deals to implement Tornado Messenger, according to Landoline. "Tornado Development is very much focused on having a very good product for the service provider side of the business," he said.

Tornado Development is also hoping to work closely with Intel since the chip maker's Dialogic telephony boards can be used in conjunction with Tornado Messenger, CEO Scheinrock explained. "We have a meeting (with Intel) the week after next where we'll lay out a road map for working together," he said.

"Intel's Dialogic boards are ubiquitous throughout the industry, so the ability to interface with them would be a fundamental coup for any unified messaging company" opening the doors to a "very broad and fertile marketplace," Landoline said.

Including this fourth round of financing, Tornado Development has raised around $38.5 million to date. The company is using the money to expand internationally and hire more engineers, Scheinrock said.

Tornado Development will open its first international office in Hong Kong Aug.

1 which will also be the company's Asia-Pacific headquarters. The vendor expects to have offices in Singapore, Taiwan, South Korea and Japan up and running up by the end of the calendar year, according to Scheinrock. The company will also open an office just outside London in the fourth quarter of this year, he added.

The unified messaging specialist's headcount is expanding rapidly, having recently hired almost 60 staff in the space of 90 days to bring the workforce up to 100 people. The company intends to hire a further 60 engineers within the next 90 days, Scheinrock said. It will also build up its sales and marketing team, he added.

Tornado Development doesn't sell its software to end-users, but concentrates on signing licensing deals with ISPs (Internet service providers), ASPs (application service providers), Web portal specialists, wireless providers and telecom carriers. The licensing deals range from partial to full licensing agreements and hosting arrangements.

Licensees can sell Tornado Messenger under their own name. "We don't care about branding, we are a technology development company," Scheinrock said. "The consumer won't know that they're using Tornado."

He believes that Tornado Messenger has the edge on its competitors since other unified messaging vendors use multiple platforms, employing different platforms for storing e-mail, voice mail and fax messages. "We have a Net-centric, single-store architecture -- something that's very important to ISPs and portals," Scheinrock said. To purchase or maintain Tornado Messenger is "approximately half the cost of the company's rivals, he added.

Tornado Development, based in El Segundo, California, can be reached at +1-310-760-5000 or via the Internet at http://www.tornadodevelopment.com/.

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