[1st-mile-nm] Small Biz Wi-Fi Strategies bMighty

[peter]

Forbes.com


bMighty
*Small Biz Wi-Fi Strategies*
Carmen Nobel 10.22.07, 6:00 AM ET

In the world of computer networking, Selina Lo is an entrepreneurial 
whiz. She co-founded Centillion Networks, a switching technology 
start-up that Bay Networks bought in 1994 for $100 million. In 1996, she 
joined Alteon WebSystems, a Web switch company that Nortel Networks 
bought in 2000 for a cool $7.8 billion.

These days, Lo is CEO of Ruckus Wireless, formerly Video54 Technologies. 
The company was founded in 2004 with a focus on wireless video. Last 
May, it decided to enter the small and midsize business market with a 
wi-fi product line of access points and controllers called ZoneFlex. Lo 
recently talked to bMighty about Ruckus' brief history, its product 
plans and its exit strategy.

*bMighty: So what's in a name? Why "Ruckus?"*

*Selina Lo:* It represents our spirit. We tend to be loud and a little 
bold in the promises we make. And when we deliver, we let everyone know 
about it. Video54 was a name that was endearing to the engineers. It had 
the "Studio 54" hint, and the reference to 54 megabits [per second] and 
it was focused on video. But we realized that video wasn't our only 
gate. And we knew that [data rates] were going beyond 54 megabits. And 
we knew the name Video54 pegged us as a consumer electronics company, 
solely. And we didn't want that. So we became Ruckus.

*When the company was founded, you /were/ focused solely on video over 
**wi-fi* *, and your customers were primarily telecommunications 
companies who wanted to offer wi-fi to consumers. What made you decide 
to enter the small and midsize business market as well? *

A lot of [service providers] started using our products for multi-tenant 
buildings, and they started calling us to ask for centralized 
management. We'd get calls from a lot of systems integrators and service 
providers who were offering managed services to condos and vacation 
properties. They wanted to manage [the access points] all together. We 
were getting feedback that, given how good our product was, if we would 
add centralized management, our product would be a lot more extensible. 
At the same time, we ran into a small company [called AirSpider], which 
had built a really good SMB management solution. We felt that it would 
be easily integrated with our RF technology, and we acquired that 
company and started the integration process at the end of last year.

*What are the specific wi-fi needs of small and midsize businesses? 
Explain your company's assertion that before you launched ZoneFlex, none 
of the wi-fi equipment makers were serving the niche between the home 
office and the larger enterprise. *

Well, when we say small and midsize businesses, we tend to think of 
offices, but the category also includes hotels, vacation resorts and 
vacation properties that are run by a franchise. These places have a lot 
of remote chains, and each of them needs a smallish network of 10 to 30 
access points. Consumer-level products aren't scalable; they might be 
fine for supporting fewer than 20 people, but beyond that you can't 
scale and control them independently. But buying something big from 
Aruba [Networks] or Cisco won't work, either, because it's so expensive 
and you need an IT team to manage it. A lot of times with the Cisco and 
Aruba solutions, you have to deal with costs and licenses that make the 
hardware much more expensive.

These customers still need a reliable wireless solution, but they don't 
need all the bells and whistles like firewalls and VPN concentrators. We 
like to say that [other companies] are addressing the Fortune 500, and 
we are addressing the unfortunate 50,000.

*If wi-fi is so hot, and if small and midsize businesses are the 
fastest-growing market segment, then why aren't more wi-fi start-ups 
focusing on that market? *

First of all, I think the total market potential for wi-fi is beyond 
belief. There are still a lot of big companies that need to install 
wi-fi networks, and there's a lot of money in big companies. SMB is not 
for everyone. It's not the traditional model for start-ups.

*And you're not traditional. *

We always do things that other people think is difficult. Ruckus is in a 
unique position to leverage our past three years of work. Our first 
focus was the consumer, so price was a big issue and ease of use was a 
big issue. So it's not like we don't already know how to make things 
cheap and simple for SMB customers. We do.

*It's common for a company to target multiple types of customers and 
businesses. Cisco, for example, sells everything from cable equipment 
for cable operators to network-security software. But Ruckus is small, 
and you haven't been around for that long. How do you justify the 
decision to enter a new market as such a young company--to your 
customers, your investors and your partners? Are you shifting away from 
your original market focus? *

We definitely are very much still in the IPTV market, too. The thing 
that allows us to participate in all these markets is that we have 
developed a technology that is both scalable and unique. This RF 
advantage that we have is something that can be leveraged easily to 
different price points and different sizes. For us, the challenge is 
distribution.

*Because you have to go through channel partners in the SMB market? *

Selling in Europe and selling in Asia, even when [the customer] is an 
operator, we still have to go through a distributor. So for the 
distributors in Europe and Asia, our [entering the SMB market] is really 
not that much of a change. The distribution challenge is really a North 
American thing. Fortunately, we hire people who have experience in that. 
People all know the market is going to explode. A lot of distributors 
and channels are looking to get in. We have [deals] lined up.

*What do you think is missing from your product line, and from the wi-fi 
industry in general? *

Basically, our belief is that wi-fi is going to be ubiquitous. Look at 
devices like the iPhone and the BlackBerry. But to be successfully 
pervasive, wi-fi networks need to be more reliable and predictable. The 
market needs something that can turn wi-fi from a high-tech, 
leading-edge, complicated technology into something that is a lot 
simpler to deploy and a lot more reliable. Anything that can make RF 
more reliable and manageable is good for the business.

*Speaking of which, what are your product plans for 802.11n?* /[Editor's 
Note: The 802.11n wi-fi protocol boasts data rates of up to 248 
Mbits/second. While 802.11n isn't due for final standard ratification 
until March 2009, many vendors are shipping "pre-N" products, or 
products based on draft versions of the standard. 802.11n uses multiple 
antennas to achieve a vast increase in data throughput over current 
standards.] /

We definitely will be shipping our 802.11n product this year, based on 
draft two of the standard. In the consumer space, 802.11n has been 
available for a while, but in the enterprise, it is still [under] a lot 
of speculation. The enterprise will want it because of the higher 
capacity, as well as the better range. But we believe that 802.11n by 
itself will pose more problems for the enterprise, particularly in the 
area of interference. Making sure that all these radios do not interfere 
with the neighboring AP is going to be a challenge. We think that 
BeamFlex technology is particularly well-suited to manage the large 
number of radios, and we have designed our controllers to be very scalable.

*What's the grand plan for the company? Are you planning to be bought or 
are you planning to go public?*

I can't say whether we're going to get bought because it takes two to 
tango, but I can tell you we are not /trying/ to get bought. I've done 
three companies; this is my third one. I know you have to build a 
company that can stand on its own two feet, and along the way you get 
offers. I don't build companies just to get bought, because if you do 
that then your value is automatically lower. Or investors are bullish on 
us. People have offered more money than we want to take.

/Carmen Nobel/ /is a journalist with an interest in mobile computing and 
wireless networking. //She lives in Watertown, Mass./

-- 

Peter Baston

*IDEAS*

/www.ideapete.com/ <http://www.ideapete.com/>

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Santa Fe, NM 87507

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