CRN Exclusive: Ruckus CEO Talks Winning Over Aruba Partners, New Juniper Partnership And Channel Push

Ready For Challenges

Longtime Ruckus Wireless President and CEO Selina Lo says her company is being boosted by the consolidation of the Wi-Fi market as former Aruba Networks partners flock to the Sunnyvale, Calif.-based company.

Unlike Aruba, which was bought by Hewlett-Packard last month, and Meru Networks, recently acquired by Fortinet, Lo says Ruckus is dead set on remaining a stand-alone company and looks to gain traction in the market from the consolidation. Ruckus plans to beat competitors such as Cisco Systems, HP, and wireless vendors Aerohive and Xirrus through strategic partnerships, channel differentiation and being a financially sound company.

Lo spoke to CRN about the impact of the Aruba acquisition, Ruckus' new partnership with Juniper Networks, and the company's first-ever Volume Incentive Rebate program rolling out later this year.

How is the HP acquisition of Aruba going to impact Ruckus?

Ruckus is now the largest pure-play Wi-Fi company.

With Aruba now being part of HP, it's extremely positive for Ruckus because I think that Aruba had to merge to HP because they really needed that firepower against Cisco. It is really against Cisco in the data center and in the large campus network, the Fortune 500 types of campus environment.

I believe now that HP has put all the HP switching and networking under Aruba; I think this is really going to distract Aruba from Wi-Fi.

Are you seeing Aruba partners coming to Ruckus?

We already have Aruba channels coming to Ruckus; we've already taken channels partners away. We also have common channels of Aruba that are giving deals to us because they don't want to continue to deal with HP.

The channel tends to get their biggest margins from picking best-in-class products, especially products that are not widely distributed and they provide the technology integration so that the customer gets a completely seamless solution. The consolidation of HP and Aruba really takes away that kind of a choice from a lot of channels and they also impose a lot more rigid rules to the channels and introduce a lot more channel competition. So we are benefiting from that.

How do you plan to compete against larger companies such as Cisco and HP?

Clearly, Ruckus will partner with all the infrastructure players that are not Wi-Fi players. Everybody from Juniper to Brocade, all these guys are on the radar as potential partners.

We'll also continue to grow our channel and treat the channel right. If you look at Aruba, for the longest time even though they had a channel program, they're not really a channel company -- they're a direct sales company. We know well that a lot of channels don't like doing business with them because they always have a sales force that's trying to maneuver in the middle -- if the deal is good, they take it. The channel never completely trusts them.

We definitely intend our channels to have higher margins that Aruba and Cisco. It's not only in terms of giving them more discounts, we continue to offer more opportunity to actually expand their business and expand their business models.

With HP buying Aruba, Fortinet acquiring Meru Networks, how is Wi-Fi consolidation impacting Ruckus?

Ruckus has been profitable for four years now and our business has always targeted to be a long-term, stand-alone company. Our target is to be a billion-dollar company, so that's why we've always been very responsible financially and fiscally.

If you look at a lot of competitors, Aruba was profitable, but Meru really had to do this sale because Meru had never been profitable -- they had no choice. If you look at many of our competitors, many of them have not been profitable and those are the ones that are really in danger of having to somehow be saved by a bigger company. Market consolidation is really positive for Ruckus.

Do you see more wireless consolidation coming? Should partners be cautious?

In the Wi-Fi space, there still are a few private companies. I really don't see Wall Street having the appetite to take another Wi-Fi company public.

Aerohive [hasn't] been profitable. Xirrus, AirTight Networks, you have companies like that, that I just don't know what they're going to do. I just don't see Wall Street taking another Wi-Fi company public. It is already quite a mature market.

If I were a channel partner, I'd be very wary of these types of companies; the channel doesn't really want to invest in a company and then have it be acquired. In contrast, Ruckus has been profitable for the last four years and we will continue to stand alone.

Why is now the right time to partner with Juniper Networks?

Juniper had a wireless business [of their own] for a long time. They decided instead of continuing to invest in R&D in that business, they're going to partner and we're really happy we have come together with a go-to-market arrangement so we can provide a complete solution to our partners -- both in the form of having interoperability, tested products that can work together, but also integration in terms of their virtualization platform with our virtual SmartZone as well as single-pane-of-glass management.

How are partners going to benefit from a Juniper partnership?

We want our channels to have the smoothest integration of our solutions together. We want to be able to feed our channel new leads and allow them to offer a complete solution from wired to wireless to security all together. It will open up the addressable market for both companies.

Ruckus already has a lot of channel partners that are already Juniper, but we also have channel partners that are not. All partners now have a solution that will work together well. We will also work with Juniper for joint go-to-market promotional programs.

Any new channel-focused initiatives at Ruckus?

You're the first to hear it, but we are going to introduce a Volume Incentive Rebate program set for the second half of this year. It's the first time ever that Ruckus will have a VIR program for our channels.

We will announce details in the coming weeks.

Can you talk about your revamped channel efforts?

We have been building out our channel account management team. We just doubled the size of that team in North America in the last six months, and we will continue to grow that team to support our channels directly.

We're also making all of our training, both pre-sales and post-sales support, free to our entire channel base. So basically, Cisco and HP and all those guys, they have channel programs but that's just one program out of their many, many go-to-market strategies. Whereas at Ruckus, our channel program is our only enterprise go-to-market strategy.

How much of Ruckus is through the channel?

Our enterprise business is two-thirds of our revenue and it's almost 100 percent channel for enterprise sales. Every bit of our enterprise business is done through channel partners. We've continued to grow that channel base.

One-third of Ruckus is selling to carrier businesses. A good portion of that is from channels, but we don't break that one down. An overwhelming portion of our revenue comes from channels.