Stoke: Stirring the Mobile Broadband Market

Date:   Friday , May 01, 2009

Vikash Varma, CEO of Stoke was quick to pick the market moves. As a leader who has a successful track record of building businesses from the early stages to market leadership, Varma understood that the market for fixed mobile convergence was still evolving and the market needed more time to open up. Instead of waiting for the market to come to him, Varma repositioned Stoke as a maker of next generation multi-access gateways for the mobile broadband infrastructure market. Thanks to this repositioning strategy and redrawing of its development roadmap, Stoke plays an important role for the carriers as they look to improve the economics of data service offerings on their current 3G networks, and as they transition to all IP infrastructures as part of their migration to 4G networks like LTE. .
Mobile broadband is experiencing amazing growth due to rapid uptake of smartphones like the iPhone, Blackberry, laptops with 3G modems, and increasing usage by the customers. The popularity of social networking sites like Facebook and MySpace adds significantly to the usage growth. The challenge for mobile carriers is the massive growth in data traffic on their mobile networks, which ironically are not architected for this level of data traffic.

The financial crisis has put a lot of limitations on capital expenditure for network expansion and build-out of new 4G networks like LTE and WiMax. Countries have delayed auction of 4G spectrum because they cannot get reserve price for the spectrum and carriers do not have access to the capital to bid for these licenses. Those that already have 4G licenses are handicapped by budgets to build-out the network and lack of availability of 4G equipment. Consequently, the focus for carriers is to do more with what they already have in place, i.e. existing 3G networks. For starters, operators have to reduce the traffic on their RAN, Backhaul, and core infrastructures in order to keep the cost of delivering service as low as possible. “We see this year as the ‘year of offload’, which means offloading traffic onto the fixed line broadband infrastructure via femtocells and interworking with other wireless networks. The benefit to operators can be tens of millions of dollars in savings per quarter,” explains Varma.

On the Platter

Today Stoke has adapted its next generation multi-access gateway to meet the needs of carriers. Its solutions are focused on helping carriers extend the life of existing 3G networks by focusing on four main areas including offloading Internet traffic (which forms bulk of the mobile data traffic) from the 3G RAN; building gateways to aggregate and secure femtocell traffic (used to enhance coverage in 3G network); enabling interworking between Wi-Fi, WiMax, and 3G networks to enhance service coverage and offload traffic from 3G networks; and also by enabling consumer and enterprise subscribers to seamlessly move between different wireless access networks, enhancing a mobile operator’s offering.

Varma says that the company has designed the gateway especially for the mobile broadband market. In the past, routers and edge gateways for wireline (IP) networks were designed with large forwarding capacity or data plane because their focus was on moving large amounts of data quickly. The mobile networks have traditionally had very different design considerations. They were designed with large control planes to handle the signal requirements of large numbers of customers, but had limited forwarding capacity because each user required only limited bandwidth (typically 384K on 3G networks). In today's mobile broadband networks, we need a more balanced architecture with large forwarding capacity and large control plane. In addition, gateways are expected to have much smaller form factor and be more energy efficient. What differentiates the Stoke Session Exchange SSX- 3000 is the multi-function capability in the highest performance, highest density per rack unit device in the market today.

Stoke has re-engineered the physics of the mobile broadband gateway concept to address the very pressing current needs of mobile data carriers as they struggle to cope with massive rise in traffic. It recently introduced new software for its SSX-3000 gateway that provides improvements in session density and cost per bit for carriers, together with enhanced system resilience for critical deployments. As a result, operators are armed with an immediate means of adapting and scaling their mobile broadband infrastructure to meet the surging demand for data, within the constraints of sharply reduced capital expenditure budgets.

As the world moves to an ‘all IP’ mobile broadband environment, security will become the cornerstone of all network service offerings. In this environment, high-density line rate encryption and IPSec tunneling are the game changers. IPSec is specified by the standards bodies for this function, and with subscriber numbers in the tens of millions, high density or cost per bit wins the day.

Minting the Market

Varma says that the operators in Asia, Europe, and North America are discovering the advantages of multi-access networks and seamless mobility, and are moving full steam ahead. User cases these operators are focusing on include consumer as well as enterprise subscribers, and involve a combination of HSDPA, Wi-Fi, and WiMAX networks. Stoke is currently working with one of the largest mobile operators in Asia involving the three different wireless networks. Stoke has customers in the U.S., Asia, and Europe. "Our solution is in deployment today, and providing immediate benefits for carriers who see high capacity and low cost as a key to sustaining momentum in this market." As it is, the company focuses now on some of the most demanding customers with very complex networking needs. The sales cycles are long, typically 12-16 months, so the discipline and deliverables in such long sales cycles have to be at a different level to be able to compete and win in this segment.

More focus is on with high broadband penetration. These are markets like East Asia (Japan, Korea, and Taiwan), Scandinavia, and select markets in Western Europe. In these markets, carriers have to offer innovative services to keep their existing customers and differentiate their services to attract new customers away from their competitors. Stoke engages directly with network operators to create awareness and preference for its products. However, all fulfilment is done through partners ? typically established suppliers to these top-tier carriers.

Behind the Scenes

Stoke is a small company and hence is hypersensitive to the fact that they need to perform at an exceptional level to compete and hold themselves well against the established players in the market. As a result, the organizational culture is of high performance expectations with high rewards. The employee programs are drawn according to this culture. Stoke has several programs for employees, ranging from lunch and breakfast privileges at work, telecommuting, job rotations between Bangalore and Santa Clara, and bonus programs for important milestones. With so much negative news around everyday, Stoke has tried to keep all the employee programs intact. As far as possible, the effort is to make the workplace an exciting and welcoming place to be. The company also offers a health club membership and on-site Badminton and Table Tennis facilities for enthusiasts.

However, Varma says that Stoke too faces challenges that are no different from other startups. In today's financial climate, the top concern for Stoke is cash management. It is an extremely difficult time to raise money, although it just completed a successful round of financing. It received $15 million in fully subscribed series D funding; bringing the company's total funding to date to above $65 million. The latest investment will be used to support the rapidly increasing installed base and commercial carrier trials with top-tier carriers. “Even though we have adequate funding, we need to manage the cash and ensure that we focus on qualified opportunities,” says Varma. The company is also using this time to upgrade our talent. Due to recession, it is able to attract some of the best talent in Silicon Valley and India, but is being selective in the hiring process to keep up with the growing needs.

With a dearth of telecommunications investment and innovation marking the first half of this decade, Stoke stands out as a vendor of forward looking systems that focus on emerging requirements using contemporary technologies. Despite difficult economic conditions, high-speed wireless data is experiencing tremendous growth and has become essential to consumers across the globe. This growth challenges scale, flexibility, and cost containment in carrier networks. Stoke is well positioned with its breakthrough mobile broadband gateway solutions, enabling network operators to reduce cost, adapt to high traffic growth, support new applications, and address quickly changing usage patterns across 3G and 4G networks.