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May - 2009 - issue > Top 10 most promising technology companies
WiChorus-Betting-to-be-a-Goliath-of-4G
Poonam Bhattacharya
Friday, May 1, 2009
David vs Goliath scenarios in real life have rarely panned out as per the lore: more often than not, the Goliaths have won, by the sheer might of their size, and hence their power. The analogy applies to the corporate world as well; Goliath being the large incumbent with multiple customers and huge revenues, and David the often-hapless startup.

WiChorus, the David in this case, in the mobile network space, however, was determined to push its way through the mélange of incumbents and emerge victorious.

For starters, WiChorus is a provider of scalable core platforms for 4G networks, and hence is a direct competitor to behemoths like Motorola, Alcatel-Lucent, Huawei, and Nokia.

The company’s President and CEO, Rehan Jalil, says that despite the yawning gap between the stature of his company and that of its competitors, WiChorus can and will come up trumps. So what fuels his confidence?
Founded in 2005, WiChorus has weathered the initial storm - it was built at half the average cost of building up a company in the networking space, but more on that later. Today, its SmartCore platforms enable operators deploy WiMAX and LTE networks with advanced service and subscriber management, content management, and network optimization. “WiChorus, with its purpose-built SmartCore platform, is the first vendor formed to specifically meet the needs of 4G networks and the operators launching them,” says Peter Jarich, Research Director, Current Analysis. They also enable operators to monetize the Internet for increased ARPU and profitability.

What have fuelled the company’s rise, essentially, are one belief, and two facts. Rehan believes that in the corporate world, in any space, there is always an opportunity for a startup. The trick is to find a niche; if and when a new player does that, it can beat the incumbents ‘even in frontal assaults’.
The two facts, on the other hand, are these: one, all big players in the space that WiChorus operates come from the video or telephony background, and do not possess expertise in making backend 4G oriented packet core equipments; two, WiChorus’ broad-based team, spanning different nuggets of the space it operates in, gives it a rare expertise.

Agnostic at the Core

WiChorus started as a platform company, and four years into its existence, remains strongly that. This, Rehan believes, has been the company’s core strength, and also the hedge against possible drag of any particular standard.

“We did not start out to build platforms for a specific standard. Instead, we focused on building a 4G platform that could support different standards,” he says.

As a first-time entrepreneur, Rehan was quick to identify the hedge while starting his company. Over 15 years of experience in the telecommunications, networking, and multi-core processor business had taught him that in the wireless space, standards are a tricky thing.
For every standard, there is always an initial phase of hype, when everyone talks about it and thinks of deploying it - WiChorus was incidentally started during the peak of a similar hype surrounding WiMAX. Then comes the development phase, and finally the remedy phase, depending on the way the earlier stage panned out.

In essence, he had gathered that by the time the real opportunity to sell products pertaining to a specific standard in the wireless space arrived, the next standard was already being talked about. So, building a product around a particular standard was a complete no-no.

However, what helped his company create the platforms it boasts of today is, as he puts it, “a certain commonality in the standards” it supports. WiMAX, LTE, 4G - these standards are quite similar, and it was easier building a platform keeping the similarity in mind.
“We had our share of good luck in getting the thing right, though,” he notes.

Recalling the early days, he says what got investors interested in the company—Accel Partners, Mayfield Fund, Pinnacle Ventures, and Redpoint Ventures pumped in a total of $43 million into WiChorus over two series—was the prospect of building a core for all mobile networks.

Opportunity, Superiority

Rehan says that in the next 5-6 years, all mobile handsets will become Internet and data enabled, and they will need 4G connectivity. That is where, with superior technological prowess, WiChorus will win over traditional rivals like Alcatel-Lucents of the world and others.

“Incumbents are basically trying to adapt 3G platforms for the next generation. That brings in inherent problems of legacy; such platforms are not as efficient as platforms built with the sole aim of working with 4G,” he says.

Fortunately, at the time when the company started operations, standards were gelled. “Had the company had to do as many iterations as is the norm, we might have had to burn our fingers”, says Rehan.

That it was possible to build the company at about half the cost that a large company normally requires shows that WiChorus did not really have to do much iteration of its products, unlike many of its competitors. “Traditionally, large companies in the space require $100 million or so to be up and running.”

Differentiator

What differentiates WiChorus’ products from the rest of the crowd is their superior performance, say the company bosses. They claim that when the performances of the products present in today’s market are compared, WiChorus’ products are upto 30 times better than the products of some larger incumbents. In fact, they are 10 times better than the nearest competitor. Add to this the fact that WiChorus’ platform has been built with the future in mind, unlike most competitors’ platforms, which are modified versions of the 3G architecture, the advantage for the company seems huge.
“We are not trying to displace anybody,” says Rehan confidently, “Instead, we are looking at winning new businesses.”

The company’s sales approach is unlike that of many other startups’ that choose to start from emerging markets. Generally, startups sell their ware in emerging markets, build credibility and a brand name, fine-tune their products, and then attack the tighter American and European markets.

This strategy does not work for WiChorus because, as Rehan says, in the data network space, emerging markets are the laggards; they are not the trendsetters in high-end mobile technologies. In India, for instance, licenses for 3G services are still not available, he elucidates to drive home the point. American and European markets, on the other hand, are ahead and are ready to experiment and deploy new technologies.

Even in the developed markets, WiChorus focuses on forward-looking operators. Cable operators form a special part of the company’s sales approach, as they are at the forefront of deploying WiMAX and the likes.

“The trick is being at the right place at the right time,” says Rehan, reiterating one of the most favored clichés of entrepreneurs.

The company has a sales team in every geography - be it South Asia, the Asia Pacific, Africa, Taiwan, Europe, South America, or North America. These teams maintain regular contact with local operators, in the form of weekly or bi-weekly calls. This helps the company identify opportunities before they crystallize.
“If the opportunity is good, we attack,” says Rehan. Talking about getting ahead in the business he says it is all about timing the product releases with larger market opportunities.

Looking Back, Opening Ahead

Is there something Rehan would have done differently with respect to WiChorus were the clock turned back to 2005?

It’s a difficult question, he replies. Maybe, we would have been more focused; maybe, we would have done things slightly differently, he mutters.

After a slight pause, he says, “We have had a few things wrong, but that did not break us.” His answer underlines the fact that the real test of survival is in being pragmatic.
Pragmatic he is, for he has chosen to place a major chunk of his team in the Silicon Valley as against anchoring the larger team in India. The real test for WiChorus’ platforms, as we said, is in the U.S., and for a company that makes products for next generation technologies, it only makes sense to be stationed where the action is.

“After all, we do not want to make artificial products,” says Rehan.

Taking the pragmatism a step further, WiChorus started the One Open WiMAX initiative. Rehan says, “The PC market developed in bits and pieces; different parts of the ecosystem came from different parts of the world and from different companies.”

This, he argues, slows down the pace of innovation. One Open WiMAX initiative was started with the intention of quickening the pace of innovation, of breaking the mould, and getting companies working in the WiMAX arena to contribute their knowledge and expertise and help build a robust technology. Through One Open WiMAX, WiChorus has accelerated the availability of an end-to-end open WiMAX ecosystem, ensuring service providers have the option to combine the best-of-breed solutions.
Some of the largest operators in the space have since contributed to the initiative, and yet others are still doing so.

Here too, being agnostic helps further the robustness of technology, and in extension, WiChorus.
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