Upstart vendors make names for themselves in the channel
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Ruckus Wireless Inc. President and CEO Selina Lo says it's no mistake that the wireless upstart is called Ruckus and its channel offering is referred to as the Big Dog program.
That's because the Sunnyvale, Calif., company is biting into bigger competitors like Cisco Systems Inc. with innovative and reliable technology at a better price along with a margin-rich, 100-percent channel-friendly sales model.
Ruckus has done what the wireless pundits claimed was impossible: deliver a no-compromise wireless LAN experience for the midmarket that is every bit as reliable as a wired LAN. Just as impressive, the Ruckus solution comes in at half the price of old-school wireless solutions. And it takes half the time to install.
Lo credits Ruckus' intelligent SmartMesh networking software and patented BeamFlex smart-antenna array technology. Combined, the two have opened the door for solution providers to deliver a reliable wireless solution without all the heavy Cat5 cabling requirements that have made some competitors' offerings costly, messy and time consuming. What SmartMesh technology does is eliminate the need to run Ethernet cables to every Wi-Fi access point.
"Our company is not shy," says Lo, who bet the company on a move into the crowded and intensely competitive wireless market and in short order has won over several hundred savvy solution providers. "We are pretty loud. The Ruckus name represents our spirit. You can't ignore us. If you say we can't do something, we go out and do it and make a 'ruckus.' "
Ruckus indeed. The company is one of a record-breaking 177 vendors in this year's CRN Emerging Vendors class. It's a class that has grown steadily in size and influence over the last several years as some larger, more established vendors continue to dole out single-digit margins and haphazard support for the channel.
Channel-hungry emerging vendors across the board—in software, security, storage and all tech sectors—have designed products aimed straight at the heart of the SMB market, where clients are every bit as demanding as enterprise customers but are more willing to take a risk on cutting-edge solutions from the entrepreneurial solution providers partnering with vendors on this year's list.
What Ruckus and the other emerging vendors are doing is rewriting the rules of the marketplace by building a better mousetrap. They are risk-takers moving to gain market share from larger, established companies.
"Ruckus is probably the best-kept secret in the technology business," says Mike Gompers, president of One Media Wireless, an Atlanta-based solution provider and one of Ruckus' Gold Big Dog partners. "They have great products. And Ruckus really helps the system integrator solve the business challenges of building networks vs. spending all my time trying to get the wireless equipment to where it needs to be."
He was looking for a wireless solution last summer for the hospitality industry that would allow him to get the job done without having to tear apart a hotel to install Cat5 cables. "My biggest challenge now is finding wall power, not how to get cabling from the phone closet and go room to room with it."
NEXT: Battling A TitanGompers, a gutsy former Cisco global accounts executive who started One Media Wireless two years ago, beat his old company and other wireless vendors in an exhaustive competitive bid showdown to win a huge deal earlier this year with Lodgian Inc., one of the largest independent hotel operators in the country.
The Ruckus ZoneFlex Smart WLAN enabled One Media Wireless to outfit the original Lodgian property, the eight-floor, 181-room Courtyard Marriott in Atlanta, with no additional Cat5 drops. Compare that to a traditional Cisco solution, which would have required 19 additional Cat5 cable drops at $250 per drop, according to the final bid specifications. The final bid number for total installation and labor costs for the Courtyard Marriott was four times greater with the Cisco WLAN from a local Cisco solution provider vs. the Ruckus ZoneFlex product from One Media ($4,750 for the Ruckus ZoneFlex Smart WLAN vs. $19,750 for the Cisco Enterprise WLAN system). The total cost of ownership costs that included maintenance came in at $43,795 for the Cisco solution vs. $13,950 for the Ruckus solution on the property.
Cisco wouldn't comment on the Lodgian final bid comparisons or even on how its technology stacks up against Ruckus.
Dan Webber, who served as vice president of IT at Lodgian when the big deal was completed, says the Cisco solution came in at more than two times the price of the Ruckus solution even with a 41 to 55 percent Cisco discount. Not only that, but maintenance costs for the Cisco solution were a whopping three times higher than the Ruckus solution, said Webber, a partner at Tatum LLC, an executive services and consulting firm.
The Cisco-Ruckus face-off ended up at board level for approval for the funding for the Wi-Fi rollout, Webber said. It came down to bucking the old IT maxim that no one ever got fired for buying Cisco or IBM.
Webber, who was in the midst of an eight-month Tatum temporary assignment for Lodgian when the big deal was signed, points out that the executive firm prides itself on its vendor independence. "We put all the products through the paces and Ruckus had not only the financial and technology metrics but also hit the business needs right over the top of the head at the right price point."
The ROI on the Ruckus solution was less than 90 days compared to a 270-day ROI on the Cisco solution, he said. The Lodgian general managers have been so pleased with the reliability and the new business opportunities it brought to the company that Webber received several thunderous ovations at the hotel operator's general manager conference in April.
"Part of it is how you define bleeding edge vs. leading edge," Webber added. "When you get down to the heart and core of the technology we were able to demonstrate that Ruckus was able to do what needed to be done in the hotel properties. Quite frankly, I have spent millions of dollars over the years with Cisco. There is a place where Cisco absolutely makes sense. It's a great company and a great vendor, but in this case we had all the pieces on the table to show we could get where we needed to be with Ruckus."
As for One Media, Webber said the solution provider "truly defined the word partner" during the extremely intense implementation schedule. "I would highly recommend them and I am very tough on vendors. They lived up to every promise."
So what does it all mean to One Media's bottom line? Gompers says his wireless solutions profitability is up 100 percent since teaming with Ruckus because his company is doing twice the number of installs each month at half the cost to the client. One Media was able to implement the Ruckus solution in 41 Lodgian hotels in only 90 days.
Year to date, One Media has been able to complete 75 installs compared to 25 in the same period one year ago with traditional Wi-Fi technology, Gompers said. "We can knock out four or five installs in the same area with one plane ticket per person," he said. With older wireless solutions, profitability always looked good on "paper," but once the One Media team got on the ground, each install was "like trying to build the space shuttle," Gompers said.
Not only that, Gompers can get directly to the top Ruckus engineers to try to get new features added to the product portfolio that will directly impact his ability to win business. "You wouldn't get that in a million years working with Cisco," he said. And because Ruckus is a channel-focused company, he is confident that he is not going to spec out a deal and have it shopped at the last minute by a purchasing agent Googling for a better price from an Internet e-tailer or a consultant working out of a garage.
Gompers, for his part, sees no end in sight to the wireless LAN boom times with the Ruckus solution. He is in the midst of rolling out a Ruckus wireless LAN-in-a-box solution for hotels with 100 rooms or less. "It's a limitless opportunity," he said.
Lo's message to partners is simple when it comes to making wireless every bit as ubiquitous as Ethernet-based LANs with a more advanced technology that is differentiated from the larger player offerings and not overdistributed: "If you want to make a difference, make a Ruckus!"