I have recently spoken to a few enterprise FMC vendors and the feeling I have is that there have not been many deployments. Can you tell me something different?
We are deployed at over twenty customers. In fact we have announced a couple of them and we should be able to make at least 2 or 3 more names public soon.
The twenty customers that you mention, typically what sort of verticals do they come under?
The most popular verticals for us thus far are healthcare and education. These two verticals tend to be early adopters of new technologies. The other reason is that these two verticals have been the biggest adopters of WiFi technology till date. And the reason they have adopted WiFi wholeheartedly is that people within these verticals tend to be highly mobile within the campus. These are what we call road warriors that can use FMC to be more productive in their jobs. The value of availability is very high in these organizations. Other areas we are finding traction in are construction, hospitality, and high-tech.
A lot of the FMC vendors do not bother about the WiFi part. What are your thoughts on their approach?
WLAN is not a huge business for the likes of Cisco. Other smaller companies like D-Link and Netgear are not entirely focused on WLAN. As such the shipment numbers and the scale of WLAN is not appreciated so much by the industry. If you want to have an understanding of how WLAN is penetrating the enterprise market, I suggest you go through the Aruba public financial reports. They are the only WLAN dedicated company that is public in this industry segment. They are number 3 market share leaders in WLAN switches after Cisco and Symbol (now part of Motorola). And it is interesting the correlation between where they are finding demand and where we are finding demand.
Have you explored any OEM channels for yourself or are you still selling direct?
We are working on signing up 2 or 3 OEMs. We have not announced them yet. Having said that we are not exactly selling direct either. We are selling through resellers and distributors.
How many channel partners do you have?
Even though we have only 20 customers, we have signed 40 channel partners. Generally vendors have 1:5 kind of ratio for channel partners to customers. In our case it is the reverse. That tells you how hungry the traditional enterprise channel is for a solution such as ours.
Can we also interpret that as saying that there is a lot of interest from the technology point of view and not much interest in terms of deployment?
Yes, that is one. The other thing is that most of these channels are 20-30 people shops who are very much mobile themselves. In fact all of these channels that we have signed up are effectively our customers as they are using our technology internally.
If you speak to companies like Cisco and Avaya on the FMC subject, you get the impression that FMC is all talk and no deployments.
Companies like Cisco and Avaya are not the right companies to discuss FMC with. They have little motivation selling FMC solutions because they would be cannibalizing their own business. Cisco would undercut its IP Phone business if it promotes Nokia dual mode phones.
Can we apply the same logic to the carrier space? They would also not want to make this thing successful because the WiFi part cannibalizes their minutes revenue.
That is right. WiFi has potential to completely nullify their cellular business.
OK, in terms of enterprise FMC server licenses being shipped these days, I know it is still early days. Are we talking somewhere in the region of 10 to 15 thousand such licenses sold each quarter these days?
This is an early market. One of the best indicators for you to look at is the uptake of the dual mode phones sold in the market these days. You want to know how the E-Series Nokia phones are selling globally. That would be one of the best indicators regarding the uptake of dual mode FMC services.
Any important new announcements from your side over the last few months?
We announced interoperability with Nolia E-Series phones at the Interop. We also made an announcement with Microsoft where we demonstrated Microsoft communications applications on our platform.