(FORTUNE Magazine) – The IT business is full of stories about salesmen promising the moon and delivering only rocks. But two-year-old Peribit may be one of the few outifts that really delivers.

The company's business couldn't be more straightforward: It makes a VCR-sized box that reduces bandwidth use on corporate networks by 50% to 80%. Peribit should find a ready market: Corporate IT budgets are under pressure, and with all the bankruptcies in telecom, local bandwidth prices remain high.

Peribit's roots are in bioinformatics--the use of computers to spot and compare patterns in DNA. Two years ago founder Amit Singh was researching the technology for a Ph.D. at Stanford when he wondered if the same pattern-recognition principles could be applied to the analysis of network data. He took his idea to VC and former Excite@Home CEO Adam Grosser, who used his connections at his old company to let Singh test a prototype there. Peribit's boxes reduce network traffic by spotting and compressing repetitive data in e-mails, such as the boilerplate at the end of a Wall Street research report or the text of a message that always winds up at the bottom of the reply. Technicians install the boxes, which cost $15,000, at each node of a wide-area network. The job takes only 30 minutes, and the boxes work instantly.

Peribit's products have been on the market only nine months, but already the company has snagged ChevronTexaco and Network Appliance as customers. Peter Sivo, network manager at Network Appliance, was on the verge of paying telcos an extra $240,000 a year to boost bandwidth between company headquarters in Sunnyvale, Calif., and big offices in Asia and on the East Coast. Instead, he bought three Peribit boxes for less than $50,000 and has seen capacity more than double. "They came along at a very good time," he says. --F.V.