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October - 2006 - issue > Entrepreneurship
Creating-an-Airtight-Wireless-Network
Sohini Bagchi
Tuesday, October 3, 2006
Hackers are moving beyond the corporate wireline networks. They are looking for fresh victims in the wireless sphere as well. Wi-Fi networks will be the next breeding ground for cyber crooks. Cyber criminals are building expertise in wireless technologies to steal information from individual users and corporates.

Airtight Networks is offering solutions to prevent wireless attacks. Despite its late entry and serious capital resource crunch in the early days, the Mountain View, CA-based company is today in a sweet spot. It leveraged India’s high-talent-low-cost factor to quickly bootstrap the company while shooting targets of first release in 18 months and an improved version in 24 months.

“We outpaced the competitors, grabbing the No.1 rank,” says Jai Rawat, VP Product Management, reminiscing about the cost and execution efficiency, India offered. “Not only did we cut development cost by a factor of five, but also offered solution that the competition did not. Our competitors were offering intrusion detection solutions. We focused on building wireless intrusion prevention solution. Competition was offering wrong solution to the right problem,” quips Rawat.

Starting in India has worked well for Airtight. The company today employs 100 engineers in Pune. “We’re much bigger than any of the competitors and yet our spending is much lower than them,” says Rawat.

Early Days
Pravin Bhagwat with substantial experience in Wireless Networking and then as a faculty member at IIT Kanpur, who played a key role in the ‘Unwire Kanpur’ (first largest outdoor wireless network) project, sensed an opportunity. “The idea of marrying wireless to security is a critical dimension, yet left unexplored for years,” says Bhagwat.

Action followed thought. In 2002, Bhagwat roped in his friends in the US—Kiran Deshpande, Samir Palnitkar and Jai Rawat and kicked off a company in Pune. Their mission: To build “next big thing in Wi-Fi” and secure the wireless network.

Bhagwat’s stint in IIT-Kanpur helped him attract 15 graduates, many of them joining the venture at the expense of lucrative placement offers.

During the next 18 months, the team focused on building the prototype of the product. The goal was to monitor wireless traffic and automatically block malicious or unauthorized activities. The end result was an effective umbrella resistance system against such activities. Several sensor devices installed across the enterprise constantly monitor what is happening in the air. Information from all the sensors get pooled in a central server appliance, where security policies have been specified. The server correlates the information, checks if there is any incident of unauthorized activity. The server then instructs the appropriate sensor to block the activity this making the entire network safe.

Once the central server gives clearance, the traffic [data] is channeled through the security devices that are already in place for wired networks thus making sure that all malicious traffic is effectively blocked.

Currently the company has four products: SpectraGuard Enterprise, which is a Wi-Fi IPS firewall and performance management solution, ideally suited for large networks, SpectraGuard Sentry, a Wi-Fi IPS firewall for small businesses, SpectraGuard Safe for Laptops and SpectraGuard Planner for wireless LAN planning for performance, coverage and security.

The capital
“Three things are required in order to create an enterprise: idea, team and capital,” says Bhagwat. “In our case, we had the first two strongly in place, but we were losing out on the third one—capital.”

The company faced significant challenges to raise capital. Despite the impressive background of the four entrepreneurs, the venture capitalists were skeptical that a product built entirely by a team in India would qualify in the U.S. markets.

So the founders pooled in their money to build the prototype of the product. They also did not take salary. Incidentally, in 2003, one of the VCs that Airtight was talking to brought in David King (one of the respected personalities in the wireless space) to do the due diligence.

Luckily for Airtight, King showed substantial interest in the company’s technology and product. He wanted to come on board immediately. “It was a golden opportunity for us. We hired David King as the CEO right away,” says Jai Rawat. Things changed thereafter. In a few months, Airtight received $10.25 million from Walden International, Granite Ventures, Blueprint Ventures and Trident Capital. A year later, it further raised $12 million taking the total amount of capital invested in the business to $22.25 million.
With a ‘good’ product in hand, Airtight focused on being aggressive on sales. Its goal was to get as many customers signed in as possible, because they were already late into the market.

Soon the sales folks found out that it was really difficult to get customer meetings. The company did not have any visibility in the market. “Hiring marketing person that too a right guy is a fairly time consuming task. Since we wanted to sign on deals as quickly as possible, we delayed hiring the marketing person. The marketing person came on board almost a year after the launch of the product. “In hindsight, that was a mistake,” notes Rawat. Airtight today has over 100 customers and among its customers are Adesa, Assa, Abloy Identification Technology Group, C.E. Unterberg, Towbin and Ketera Technologies.

Going Forward
The Market is still evolving and is at an early stage now. “We are trying to grow the market as we are building the product. We spend considerable amount of time educating the customers. Initially we had a hard time convincing the customer. Gradually we are seeing them becoming proactive. They have begun to understand the nature and seriousness of the threat,” says Rawat.

The company asserts that in the next three years close to 70 percent companies in the U.S. are expected to run on wireless networks. So far only five percent of the large enterprises worldwide have deployed solutions that would help protecting their information from wireless threats. The estimated potential for such products in the U.S. alone is close to $1.4 billion, as compared to $3 billion for the world market.

Airtight wants to grab as much share of the market as possible, that too quickly.
The good news is that there are very few solid players in the wireless security space and Airtight already has the lead. However, infrastructure vendors—those who provide WLAN solutions—pose a challenge as they have begun to incorporate security capabilities into their solution. “It’s cost effective for companies to go for an integrated solution, though they miss out on various critical aspects of pure wireless security solution,” says Rawat. He hopes that just like Checkpoint, in the wireless world, customers will recognize the need to have best-of-breed security solution. To manage the threat, Airtight has partnered with the infrastructure vendors.

Airtight is crossing the chasm right now. It has been successful in getting its product to the early adoptors. The company is now looking at early majority. The opportunity is there. Airtight has to continue to focus on execution and stay ahead of the competition.
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