Channel Chief
“The Wi-Fi opportunity here is huge”
 Known as an entrepreneurial whiz in Silicon Valley, Selina Lo has built a number of successful networking startups. At Alteon WebSystems, she defined a new market for load-balancing Web switches and eventually sold it to Nortel for $7.8 billion. Prior to that, she co-founded Centillion Networks, which developed the first token ring switch and was later sold to Bay Networks. Now as the CEO of Ruckus Wireless, she plans to do the same—identify new markets for Wi-Fi and exploit them with simple and affordable but cutting edge technology. On her recent visit to Mumbai, Selina spoke to Dhaval Valia about her plans to create a ruckus in the Wi-Fi market, taking on established players
How important is the Indian market for Ruckus?
India represents a major opportunity for Ruckus Wireless in both carrier and enterprise markets. In India, we sell directly to service providers and through two-tier distribution to enterprise customers and hotspot operators.
We’ve managed to establish a strong base of value-added partners and distributors such as Telexel, iValue, Zenexim and Comptel. We’ve also established strategic partnerships with Dell India and UTStarcom.
Since we landed in India in March 2008, Ruckus has seen remarkable growth in its business with respect to both revenue and unit shipments. In our most recent quarter, we shipped over 20,000 units into India. This represented nearly 25 percent of our worldwide revenue.
With a limited number of fixed lines available throughout India, carriers are looking to use Wi-Fi strategically as a way to provide high-speed wireless services. We have also seen huge growth in vertical enterprise markets such as education, hospitality and healthcare.
Some of the landmark deals we have clinched include deploying the entire wireless network for Lovely Professional College and Thapar University in Punjab—spread over a 600-acre campus. In the hospitality segment, we bagged the country’s largest deal from Hyderabad-based Lenoia Resorts for its 300-acre resort.
What are your plans for India?
Over the coming year, you will see us take a very aggressive position in the enterprise 802.11n, hotspot and wireless broadband access markets. We will continue to invest in local sales and systems engineering resources along with a focus on signing value-added systems integrators.
Specifically, in the market for wireless broadband access, we are building a complete portfolio of high-speed and highly reliable Wi-Fi products. Today, operators must build these broadband Wi-Fi networks in a piecemeal fashion—cobbling together customer premise equipment, user access nodes, backhaul and management.
Ruckus will also push for faster, more reliable and more affordable 802.11n systems.
Finally, we will deliver a new set of purpose-built Wi-Fi products that will allow for high-speed multimedia hotspots that can easily offload data traffic from congested 3G networks.
What is the Wi-Fi opportunity in India?
The Wi-Fi opportunity here is huge. Three key factors are driving demand—the explosion of Wi-Fi enabled mobile handsets, limited fixed line access to broadband services, and increasing pressure to purchase lower cost and higher value solutions.
ABI Research expects the number of phones with integrated Wi-Fi to grow to 90 percent by 2014, bringing the total shipments of Wi-Fi phones to 520 million units, globally. This means that Wi-Fi must become much more reliable to handle higher speed wireless services that can support an entirely new set of IP-based video applications.
Ruckus is just a $33 million company with focus only on Wi-Fi compared to biggies like Cisco and D-Link. How do you plan to survive and thrive?
Our focus and size is what allows us to add value where larger companies can’t. Their sheer size is precisely what hampers their ability to act quickly and provide responsive customer support. We don’t really compete against consumer-play companies like Netgear and D-Link. We sell to carriers and enterprises.
For the last five years, we’ve devoted ourselves to solving the problem of Wi-Fi interference, signal propagation and control. Because, we believe that Wi-Fi systems need to be highly agile and adaptive. It is simply not cost effective or practical to have IT managers become PhDs in wireless networking, constantly tuning and adjusting devices.
Since our inception, we have not seen a single Wi-Fi company make any significant headway in this area like we have done. This is why we continue to command 95 percent of the in-home wireless IPTV market among telecommunications providers.
With respect to a larger networking player like Cisco, who has both a strong wired and wireless portfolio, it’s important to understand that we are selling primarily into the middle of the enterprise market. Here, nearly every customer already has in place a wired infrastructure and is looking to overlay best-of-breed wireless on top of it. It’s also in this segment where price, simplicity and ease of use are major issues. This is where Ruckus has a clear differentiation. While we have seen Cisco effectively give wireless away to win wired business, these deals are typically Fortune 500 deals that we don’t usually go after.
Also, given the current economic outlook, we are being exposed to many more opportunities because the premium for big brands doesn’t match up with the price-performance customers are looking for. In other words, brand loyalty diminishes if someone else can provide 90 percent of the capabilities at half the cost.
You have created successful ventures and sold them off for billions. Same plan for Ruckus?
Well, yes (smiles). Though I’d like to take credit for all that, those were different times where valuations were astronomical and the anticipation of Internet gold rush caused irrational behavior. Today it’s all about when you will break even, become profitable and showing that you can continue to innovate.
Ruckus is really just getting started. It’s taken us four years to develop the right technology, evangelize and commercialize it. Since inception, our revenue growth has exceeded 4,000 percent. While this sort of growth is not sustainable, it does demonstrate that there is pent up demand and opportunity for new entrants who can deliver true value.
Our current goal is to scale so we can better capitalize on some of the opportunities we’ve discussed. We plan to break even in 2010 and reach profitability sometime next year. From there, our goal is to outperform and establish a track record of sound profitability.
How does the TCO of your technology compare with the other established players?
Dynamic beam-forming, which is our patented technology, has the ability to form and direct Wi-Fi signals constantly over the best path to any given client device. Conceptually, it’s very similar to comparing an overhead light bulb to standing in a dark room with flashlight in your hand. The light bulb is unfocused and wastes energy shining light everywhere, needed or not. With the flashlights, you direct the light only where you want it.
With this technology, you need about 40 percent fewer access points than you do with any other competing systems. This means lower capital and operational costs.
The other big TCO benefit is that you don’t have to run Ethernet cabling to every wireless access point. In many places such as hotels, hospitals and schools, cabling isn’t always available where you want to place an AP.
Competitive products force companies to pull additional Ethernet cabling, which takes time and costs money. With our wireless meshing solution, companies can simply plug APs into a power outlet and walk away. The system is smart enough to know that it must connect to another Wi-Fi AP using the RF spectrum.
In comparison, with a typical Cisco 802.11g wireless network within the hospitality and education markets, we have consistently found that companies install our next-gen 802.11 gear in half the time, for half the cost, while getting three times the performance.
Does Wireless-N create an entry point for small and young players like Ruckus?
Absolutely. 802.11n is based on new silicon technology along with fundamentally new wireless techniques needed to make Wi-Fi faster. This means new hardware must be purchased to enjoy the benefits of 802.11n. It also creates a new set of unique problems that must be solved—giving new companies such as ours a more level playing field and an entry point into a crowded market.
With 802.11n, wireless vendors effectively have access to the same silicon from the same chipmakers. The key is finding ways to innovate on top of this silicon. Ruckus Wireless has done just that. We’ve focused on the physical layer using intelligent antenna arrays to make Wi-Fi more reliable. Other vendors are merely bringing to market the same products they’ve always had but with faster chipsets.
What are the wireless trends you predict over the next three years?
Over the next couple of years, you will see Wi-Fi integrated into almost every conceivable electronic device—from set-top boxes to home gateways to all sorts of home automation systems. In the enterprise, we’ll continue to see wireless speeds get must faster reaching gigabit range like the wire networks.
And, in the carrier space, Wi-Fi will become a strategic inflection point. Carriers will use it to augment wireless broadband access services such as LTE, 3G/4G and WiMax and, in some cases, will deploy Wi-Fi over much broader areas. They will also use it for fixed mobile convergence as new dual-mode mobile handsets reach critical mass. |