Colubris may be big in Wi-Fi hotspots, but it's still got challenges, and this week took on a new CEO and a new strategy. We spoke to the new guy, Robert Eisenberg, on the day he took over.
The company claims to be number two provider of access points for public Wi-Fi services, but that market is the least exciting sector of the Wi-Fi market, eclipsed by the burgeoning enterprise and home sectors. Last year, Colubris announced a Wi-Fi switch, but its push into that crowded market hasn't yet borne fruit.
Before Christmas, chief executive officer, Barry Fougere left the company, along with ten percent of the staff. Eisenberg aims to push harder on getting into the enterprise market.
In a nutshell, Eisenberg reckons
- although existing network vendors have mostly already got OEM partners in wireless, the expansion of Wi-Fi will create new opportunities,
- enterprise Wi-Fi isn't commoditised yet, so it's still possible for a new arrival to succeed
- Europe and Asia still have big opportunities for hotspots, and Colubris will be expanding in these areas.
Vendor seeks partners
"Colubris is going on the offensive," said Eisenberg. Like most new CEOs, he said a new head was needed as the company reached a new stage. Fougere had succeeded in getting funding and making products, but Colubris now needs the ability to complete deals with OEMs and large users, to get the kit in use.
"Colubris has had many successful conversations with potential partners, but these things taper off," said Eisenberg. "We're going to be branching out into new opportunities in Asia and Europe, and we're looking for strong OEM relationships." As CEO of hosting company NaviSite, he has experience dealing with enterprise IT, and companies operating in that area.
Colubris wants other vendors to adopt its kit on an OEM basis, but most of the big network players - from Cisco down through Nortel, Avaya and the rest - either own enterprise Wi-Fi technology or have partnerships with companies like Trapeze or Aruba. Backbone network company Juniper actually sells Colubris' hotspot kit to service providers, but recently adopted Meru for Wi-Fi voice.
Eisenberg reckons other opportunities will appear: "Wi-Fi equipment will grow 88 percent in the next three years or so," he said. "This will create a whole new set of people entering the game. Wi-Fi will be part of a wider range of apps, which will create opportunities for new partnerships." He would not comment on the kind of companies that he meant.
Also, he pointed out that the likes of Aruba and Trapeze will need to renegotiate their partnerships. "Existing vendors may need to bring on solutions for other applications, to create a portfolio of solutions, depending on what the end customer is looking at."
Not a staff-cut, a refocus
The staff cut was for operational reasons, said Eisenberg, and is not a crisis move. "Our revenue forecast and run rate were out of wack," he says, explaining that the company had hired new staff, on the basis of expected revenues that hadn't materialised because the enterprise kit had taken off slower than expected.
"We haven't ramped up revenues as rapidly as we hoped," said Eisenberg. "We announced some very strong products, and got a lot of interest from enterprise customers, but there was some delay in bringing them to market."
Although staff have been laid off in the US, it's just a matter of balance, Eisenberg claimed. He expects to take on equal numbers outside the US, where the opportunities in enterprise and hotspot Wi-Fi are still good: "We're redeploying our resources in other areas." The company has around 86 staff, he said.
Although growth in the service provider sector has been disappointing, the sector is still growing, he said, and will help fuel the company. Meanwhile, although revenue form the enterprise sector so far has been low, Colubris will now be focussing on certain sectors such as education.
At the same time as taking on Eisenberg, Colubris has acquired a vice president of worldwide sales, and promoted a vice president of engineering.
Chris Koeneman takes the sales post, having been vice president of worldwide sales at Avici. Roger Sands, who headed the team developing Colubris enterprise products, becomes overall head of engineering at Colubris, replacing John OHara.
Sands' promotion should steady the troops, reckons Eisenberg: "We're sending a message to our organisation that we are going to look within first, and we will build up our engineering capabilities."
In future those engineering strengths will be needed, says Eisenberg, because enterprise Wi-Fi is still a long way from being a commodity.
Will they make it?
With an investment $36 million of venture capital, and a strong presence in one part of the Wi-Fi market, Colubris is not going to disappear. It's not at all clear that the OEM opportunities are as good as Eisenberg believes. He's right to say the market is still changing, and there are opportunities for a company whose product is distinctive - but there are other vendors with a clear difference in Wi-Fi architecture. Will Colubris' approach be distinctive enough, compared with, say, Meru?
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