Tech Report: Plexxi Looks to Disrupt Networking

Plexxi’s rapid growth isn’t likely to slow soon as the networking tech startup expects to hire another 100 employees in the next 18 months—about half in engineering and half in sales positions. And that’s after growing its engineering department by 40 percent in the past year.

“We’re growing revenue 10 times this year” from 2014, says CEO Richard Napolitano. While he would not disclose specific revenue figures, he says it is measured in the millions.

The Nashua company won the 2015 Product of the Year award from the NH High Tech Council for its Plexxi Switch hardware. The  Plexxi Switch 2 takes the traditional rack of servers connected through myriad cables and distills it into a single box that interprets the bandwidth a user needs and provides it.

Napolitano says he was attracted to Plexxi for the same reason the investors are—the basic building blocks of IT infrastructure are undergoing a radical change not seen in 20 years, influenced by such game changers as the Internet of Things, the cloud and big data. “Plexxi is seeking to disrupt how that infrastructure is navigated,” Napolitano says. “This is the wild west of business.

The technology was developed by company founder Dave Husak, a tech industry veteran with 16 patents who serves as CTO and executive vice president of products and technology. About four years ago, Husak brought Richard Napolitano onto the firm’s board, and two year later, Napolitano, who has more than 30 years of experience in the IT industry, took the helm as CEO. He previously served as the head of EMC’s Unified Storage Division, where he was responsible for more than $4 billion in annual revenue and 2,000 employees.

He led Plexxi in closing a $35 million investment round this past summer that will allow the company to build out its sales force.  Napolitano expects to generate another round of investment this summer, which will help Plexxi achieve profitability. The company so far has raised $83 million in venture capital from Matrix Partners in Boston, North Bridge Venture Partners in Boston and Lightspeed Venture Partners in California.

Napolitano says a big advantage of Plexxi’s technology, which ranges in price from $25,000 to $100,000, is that it is physically agile, allowing for different configurations of networks without losing speed. He points to one client who used the technology to create a 34,000-mile network around the Pacific Ocean that is controlled from New York City. Another client, Washington State University, networked six departments involved in genomics research that were spread across its campus.

Plexxi’s primary customers are professionals that create cloud storage and infrastructure, and it is building a network of partners to reach them, Napolitano says. The company will spend most of 2016 ramping up sales. “You can imagine a company like this doing hundreds of millions of dollars in the next few years,” Napolitano says.

This is Napolitano’s fourth startup, and he is excited to be back in Nashua where he started his tech career. “I am tired of companies in California doing all the innovative stuff,” Napolitano says, explaining 70 percent of the IT industry’s revenue is generated east of the Mississippi. “We need tech companies here. We have the talent here. We need the jobs here … We need to fill these buildings with people who build cool things.”

Helping to fill up the Nashua Technology Park where Plexxi is located is the park’s owner, John Flatley, who also owns the Nashua Office Park at Gateway Hills. Flatley started the annual Flatley Challenge a few years ago to assist entrepreneurs in the fields of IT, communications, data storage, connectivity, robotics, mobile app design, clean tech, medical devices, life sciences and other technologies. The challenge winner, of which Plexxi was one a few years ago, receives free rent for one year for up to 5,000 square feet of office and/or lab space as well as up to $10,000 in fit-up, connectivity and related costs.

Plexxi outgrew its original space and is quickly filling its current space. “The market is moving towards what we do. Everyone is building private or public clouds,” Napolitano says.”