The market for enterprise Wi-Fi products is still tough going, as Wi-Fi startups Trapeze and Vivato have both lost staff, including senior executives this month. There are big differences in strategy however. Trapeze is still expanding its European staff, while Vivato (whose system, based on directional antennae has yet to receive European approval) cancelled a visit to a London IT fair this week.

"We have invested a lot in order to put Trapeze on the map," said Kees van Veenendaal, general manager of EMEA at Trapeze. "Once this is done, then you can slow down a bit and reinvest in field operations." However, the company’s thirty percent staff cut does not sound nearly as "planned" as van Veenendaal suggests.

The company has taken a classic high-profile approach to establishing itself, spending its £50 million of venture capital at a high rate in order to establish share of a market which it expects to take off quickly. The change in direction suggests that it no longer expects explosive growth in the enterprise Wi-Fi switch market.

"In Europe we are seeing very good successes with end users," said van Veenendaal. "We have installed in several companies and are on track with the business plan we have – we can run beyond 2006." George Prodan’s retirement as vice president of international sales had always been planned, he added.

Despite the reduced headcount, new products will come through quickly, he said, in particular, an addition to the product which will allow access points to communicate across a switched Ethernet network to the Trapeze wireless switch. At present all access points must be plugged directly into wireless switches.

Vivato, meanwhile, has laid off around 25 percent of its staff, leaving it with 77 people. Its technology is based on using a single higher-powered base station with a phased array aerial that lets it support more staff over a larger area. The recent announcement of a bridge/router offers a cheaper and more conventional way into the product, which requires more of a leap of faith than other Wi-Fi systems.

Vivato’s system also requires a breakthrough in regulations to be approved in Europe, where the energy output of Wi-Fi systems is more closely defined than in the US. This may explain the company’s sudden withdrawal from Cal-IT, an event in London to show "hot young" Californian start-ups to the European investment community. Despite its presence in the brochures for the event, Vivato apparently did not show.