Telecom Equipment: How Can Smaller Vendors Improve their Odds of Success? By: Shrikant Latkar, AVP Products and Solutions Marketing, AricentTeam YS
Shrikant Latkar, is responsible for Products and Solutions Marketing at Aricent. He has been the key driving force behind the launch of several of Aricent's award winning pre-packaged software framework and technology practices.1. What, in your opinion, what are the biggest challenges faced by smaller vendors in bringing successful telecom products to the market?
Some of the biggest challenges faced by smaller vendors include:
• Early stage companies and mid-sized companies typically have very innovative ideas which have the potential to revolutionize the telecom domain. However, they need to do a lot of development on non-core items, not their own mail value add – to bring a product to the market. Even though the idea may be interesting and disruptive, often, the market is not ready for the technology or product. By the time the companies realize this, they have invested far too much into it to be able to correct course.
• Bringing telecom products to the market proves to be pretty expensive as it requires telecom domain expertise, which does not come cheap. Additionally, the developed product needs to be tested extensively for interoperability with other products – which again does not come cheap, especially for smaller companies which are often strapped for cash.
• Unlike the larger vendors who have scale needed for dedicated off-shore development facilities, these smaller vendors need to deliver products – often at a lower price point than established vendors – without having the luxury of captive offshore development facilities.
• Timing is highly critical for small vendors, and they need to be ready when carrier spend cycles occur. Meeting stringent market windows with quality products under strict budget constraints is definitely not an easy nut to crack.
2. What should the smaller vendors do to overcome the identified challenges?
• They need to analyze the market opportunity very carefully and wherever possible use a third party to do this evaluation for them. These companies are typically driven by innovators who have come up with the idea and are very biased towards it. An external non-biased opinion would be very helpful in determining the actual market feasibility of the proposed solution.
• The smaller companies need to focus on their innovation and build in as many differentiators into their solution as possible. As this is really their main value proposition, it needs to come across as solid, and something that would raise interest levels among customers.
• Vendors need to de-focus from non-core work and develop strategic partnerships which help them deliver high quality products meeting their market timing and budget constraints.
3. Given the current economic climate, how does the outlook for smaller equipment vendors look like?
• Over the past year the economic climate has turned cautiously optimistic, and this is good news for equipment manufacturers. Although the market is a lot better than in 2009, it does not mean that the heady days of the late 90s or mid-2000s are back, and success is still very dependent on being able to successfully address all the challenges listed above.
• The last year has seen a lot of emphasis being placed on intellectual property in domains which are critical in the telecom arena. The acquisitions of Starent by Cisco, WiChorus by Tellabs, etc. all at favorable valuations, do indicate that if the right products to address the critical markets exist, these companies will either be bought up – or have a favorable outlook to make an IPO
• It is critical for equipment manufacturers to be in the right technology markets. Infonetics Research, in its latest report, has identified LTE, WiMAX, Datacenter Ethernet and Femtocells as “hot” telecom technologies with potential for high growth and significant innovation. Companies should consider technologies such as these as they decide to make investments, or alternately if they play in adjacent segments – move into segments with the most potential rapidly – so that their valuations can increase favorably.
4. How is Aricent helping equipment vendors as those listed above in meeting their goals?
Aricent has a long history of working with smaller equipment vendors and helping deliver many “industry firsts” which have paved way for broader deployments. Examples of our engagement include the first femtocell solution, enabling the first WiMAX ASN gateways, in-flight broadband solutions, etc., all delivered for small to mid-sized vendors – who have since gone on to become industry pioneers in their respective domains
Broad DaylightTM is Aricent’s latest initiative in this domain. As we understand the needs of the early stage and mid-sized equipment vendors very well, we have created an innovative tailored R&D program to help vendors “build it right the first time”. Broad Daylight offers a highly customizable menu of technology and product lifecycle services to streamline entry into new markets including:
o Business and Technology Consulting: Aricent’s BTC Practice helps communications equipment makers rapidly identify, define, and realize emerging business opportunities by conducting market attractiveness evaluations
o Product Design: Advanced product design including ATCA expertise and established NP relationships coupled with comprehensive hardware engineering services helps customers deliver complex, high performance systems at lower cost/risk
o Pre-packaged Software Frameworks: Development jumpstarts for LTE, WiMAX, Ethernet, Multimedia, Femtocells and more help equipment makers accelerate time to market, reduce development costs and minimize risk.
o Comprehensive Product Development Services: Aricent offers a complete set of product development and testing services, delivered via advanced processes with adherence to the highest quality standards and contemporary engagement models such as “pay-as-you-go” where framework licensing costs are tied to the subscriber/customer growth.
5. What was the purpose behind developing such a programme?
The telecommunications market is evolving at lightning speed with new technologies Aricent’s Broad Daylight program was created specifically to help small to mid-size telecommunications equipment manufacturers bring new communications infrastructure solutions to market, and capitalize on additional revenue streams. With the emphasis being placed on innovation today, and the willingness of larger companies looking for acquisitions to enter these domains – we felt that the timing was right to create something that would help small and mid-sized companies boost their valuation and attractiveness in this space.
Further, the program aims to enhance clients’ relevance and value to large Original Equipment Manufacturers (OEMs) who may be looking to partner in specific product and technology areas.
6. How has the response been and how do you foresee it evolving?
The response has been very encouraging so far. While, it is very early for us to give an answer in terms of absolute numbers, from the initial trends we are finding that the program does resonate with small and mid-sized OEMs. We have started receiving enquiries about the program from vendors all across the telecom equipment spectrum, spread across multiple wireless and wireline technologies.
As we proceed further, we plan to further cement our commitment towards this program by continually enhancing our offering to include newer technologies which are increasing in relevance and expanding our solutions portfolio (software enablers and services offerings) appropriately.
7. Will Aricent be partnering with others apart from Intune Networks to provide the Broad Daylight program?
Absolutely! Aricent has always spearheaded innovation in the communications industry, helping dozens of companies accelerate their entry into advanced communications and networking markets such as the early Femtocell deployments, new WiMAX and LTE base station installations, next generation Metro and Data Center Ethernet network development, mobile payment services, etc.
The small and mid-sized companies are the innovation engine of the telecommunications equipment manufacturers market and Aricent is committed to helping them accelerate their entry into the new telecom equipment market such as Long Term Evolution (LTE), Home Networking, Data Center Ethernet and Cloud Computing.
8. How is Broad Daylight program different from the other programs designed to address this underserved market?
Aricent’s Broad Daylight program is the first of its kind, enabling telecommunications equipment manufacturers to benefit from Aricent’s unparalleled experience as a research and development partner and its global pool of consulting and engineering resources.
Some differentiators in this program include:
a. Unique combination of deep domain expertise complemented with software enablers (protocol stacks and software frameworks) which reduce time-to-market and R&D expenses by over 50% over development from scratch
b. Aricent’s highly modular software enablers are customized to address the needs of smaller companies – where the vendors can license only a subset of the functionality required to help them deliver a quality product – without dealing with the overhead of an unwieldy and bulky integrated implementation
c. Aricent’s engagement models are highly flexible and the licensing schemes for software are tailored to meet the capital availability characteristics of smaller firms. For example, Aricent supports pay-as-you-go licensing for many software frameworks, wherein the licensing costs scale up with an increase in the number of subscribers that need to be supported – allowing low up-front costs, and a gradual increase as the product succeeds in the market.
d. Unbiased evaluations of technology/solution readiness for mass market adoption, helping companies avoid wasted expenses of precious capital resources.
About Shrikant Latkar
Shrikant Latkar, is responsible for Products and Solutions Marketing at Aricent. He has been the key driving force behind the launch of several of Aricent's award winning pre-packaged software framework and technology practices.
Previously, Shrikant worked for Juniper Networks where he spent three and half years leading, defining and implementing the company's solutions marketing strategies. Before Juniper Networks, Shrikant spent nine years at Avaya and Lucent Technologies in various leadership positions across Product Management, Marketing and Engineering.
Shrikant has a B.S. in Engineering from Karnataka University, India, and an MBA from the Leavey School of Business, Santa Clara University, USA.