Carrier WiFi. Vendor Scorecard IHS INFONETICS REPORT EXCERPTS. Excerpts. July By Research Director Richard Webb

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1 IHS INFONETICS REPORT EXCERPTS Carrier WiFi Vendor Scorecard Excerpts July 2015 By Research Director Richard Webb Telecommunications Equipment Vendor Scorecard: Excerpts Reprinted with permission from Infonetics Research Infonetics Research, Inc.

2 Table of Contents TOP TAKEAWAYS 1 DETAILED SCORECARD ANALYSIS 3 RUCKUS WIRELESS PROFILE 4 Portfolio 5 Market Presence and Market Momentum Highlights 5 Bottom Line 5 METHODOLOGY 6 Market Segments Covered 6 Scorecard Criteria 6 Reports Used 7 REPORT AUTHOR 8 ABOUT IHS INFONETICS 8 REPORT REPRINTS AND CUSTOM RESEARCH 8 List of Exhibits Exhibit 1 Carrier WiFi Leadership Landscape Graph 2 Exhibit 2 Carrier WiFi Leadership Scores 3 Exhibit 3 Ruckus Wireless Carrier WiFi Profile 4

3 TOP TAKEAWAYS The only report of its kind, this Scorecard evaluates the top carrier WiFi equipment vendors on criteria using actual data and metrics, including direct feedback from buyers, vendor market share, market share momentum, financials, brand recognition, reputation for innovation, and other benchmarks. This approach eliminates subjectivity and ensures vendors are assessed accurately and fairly. There are a limited number of vendors around the globe that make and sell carrier WiFi equipment. The 5 vendors profiled in this Scorecard Ruckus Wireless, Cisco, Ericsson, Huawei, and Alcatel-Lucent were selected because they are the top revenue producers for carrier WiFi equipment. The purpose of this Scorecard is to analyze the relative strengths among these vendors. In this Scorecard, we classify vendors as leader, established, or challenger depending on their overall score; the 5 profiled vendors are grouped as follows: Leader: Ruckus Wireless Established: Cisco and Ericsson Challengers: Alcatel-Lucent and Huawei Bottom line: The WiFi market has sub-segmented into WiFi-only products and dual/triple mode products that integrate WiFi into licensed spectrum small cells. The vendor landscape has segmented along similar lines, with specialists focused on WiFi as the driving technology and mobile network equipment vendors coming very much at the market from the opposite direction, seeing licensed spectrum as the driver and WiFi as more of an add-on. Specialists drive WiFi technology innovation and are in a good position to win market share with operators focused on WiFi as a standalone network, albeit one that can be closely tied to the existing broadband network (whether fixed or mobile), and their efforts are based on pushing the capabilities of WiFi to deliver new services. Conversely, the focus of innovation in the RAN market is very much related to the challenges of integrating WiFi into the mobile network at the equipment level (i.e., within the small cell), rather than improving the performance of as a standalone technology; the RAN vendors pursuing this strategy view the role of WiFi as being subservient to the licensed spectrum network and are less interested in competing for a share of the WiFi-only AP segment, one that they might argue is likely to commoditize much more rapidly than small cells. Both approaches are viable and not mutually exclusive. Perhaps the ultimate winners of the carrier WiFi equipment market will be the vendors that have the most flexibility in their portfolio and that can address the myriad opportunities for WiFi to be deployed: in the mobile network, as public extensions of fixed/cable networks, in-building and outdoors, in smart city projects, or in support of new public/private models. 1

4 Exhibit 1 Carrier WiFi Leadership Landscape Graph Please see Methodology (excerpted methodology is at the end of this document; the full version, with a more detailed description of the scoring process, is available from Infonetics Research). 2

5 DETAILED SCORECARD ANALYSIS The next chart summarizes the 5 vendors scores in market presence and market momentum and places them into one of 3 categories: leaders, established players, and challengers. Leaders perform strongly across all evaluation criteria and vectors. Leaders have established a significant presence in the market and have positive momentum, which means they are likely to cement and expand their leadership positions in the future. Established players perform strongly in the market presence vector. Though established players have lower market momentum than leaders, their significant presence indicates strong adoption of their solutions. Challengers perform strongly in the market momentum vector. Though challengers have lower market presence than leaders, their positive momentum indicates they are in a good position to grow their market presence in the future. Exhibit 2 Carrier WiFi Leadership Scores Leader Established Challengers Ruckus #1 Presence: 2.6 #1 Momentum: 2.1 Cisco #2 Presence: 2.4 #5 Momentum: 1.2 Huawei #3 Presence: 2.1 #3 Momentum: 1.7 Ericsson #4 Presence: 2.0 #4 Momentum: 1.3 Alcatel-Lucent #5 Presence: 1.5 #2 Momentum: 1.8 3

6 RUCKUS WIRELESS PROFILE Ruckus was founded in 2004 and designed an adaptive directional antenna technology called BeamFlex, which it initially targeted at the in-home video distribution market, first selling the technology to other manufacturers to incorporate in their products, then coming out with a CPE device in 2006 that it sold to service providers. In 2007, Ruckus launched ZoneFlex, a centrally managed WLAN platform for enterprises and carriers, which has since gone on to become their core offering. In 2012, Ruckus held an initial public offering that raised $126M. Ruckus Wireless began shipping WiFi products into the carrier space in 2007, and carrier WiFi shipments now account for a little over one-third of its overall revenue. Even though it s up against heavy-hitter telecom equipment vendors like Cisco and Huawei, Ruckus holds the lead for overall carrier WiFi revenue market share. In the last year or so it has expanded its business outside North America, gaining footholds in EMEA and Asia Pacific through customer wins with Virgin Media UK, China Telecom, and KDDI, among others. Additionally, Ruckus Wireless started to see more of a presence in CALA from 2014 and on, as it was selected by a consortium of Latin American mobile network operators, including Oi and TIM Brasil, to supply indoor/outdoor WiFi products and technology in some of Brazil s largest soccer stadiums. Exhibit 3 Ruckus Wireless Carrier WiFi Profile Carrier WiFi Revenue $127.4M Score Market presence: 2.6 (+0.5) Market momentum: 2.1 (+0.5) Leader Strengths Market specialization Product innovation Challenges Smaller player Note: The market presence and market momentum scores are described fully in Methodology. We show the difference in parenthesis (e.g., +/- x.x) between this vendor s score and the average score of all 5 evaluated vendors. 4

7 Portfolio Ruckus has proved itself as one of the innovators in carrier WiFi capabilities, having launched location-based services, cloud-based service management, NFV tools for implementation in carrier WiFi networks, and a suite of tools to support monetization of WiFi by service providers, including data analytics all of which bode well for the vendors future. It has a range of EAP-based (Extensible Authentication Protocol) access points for indoor and outdoor deployments, supporting both n and ac, as well as Hotspot 2.0 and WiFi Calling, including narrow beam APs for high-density applications like venues. At the core of Ruckus ZoneFlex APs is BeamFlex, its directional antenna technology, which automatically adapts to changes in the RF environments and focuses WiFi transmissions at clients, thereby delivering a stronger signal. Though beamforming has now been incorporated into the latest version of the standard, ac, the greater antenna diversity in Ruckus APs should still provide greater performance, at least in theory. Beyond BeamFlex, Ruckus has added other technological differentiators, such as smart meshing, predictive channel selection, and dynamic pre-shared keys. For management and control, Ruckus offers two different controller platforms, ZoneDirector, which is geared toward smaller, single-site deployments, and SmartZone, targeting carrier and large, multi-site enterprise deployments capable of supporting thousands of access points. ZoneDirector is an appliance-based offering, whereas SmartZone can be delivered as a physical and virtual appliance. Ruckus supports other radio access technologies such as small cells, so it receives a perfect score in solution breadth and the highest survey-based ratings for product reliability and technology innovation. Market Presence and Market Momentum Highlights Ruckus gets the highest scores for market presence and momentum, and has a high score for financials; it is well placed to drive revenue growth in this segment as the overall market grows and embraces NFV-based solutions, where it has a differentiated position. Ruckus is a comparatively small company surrounded by giants, which may be considered a weakness by some, but it is meeting the challenge, remaining nimble and competitive in a market where it trades blows with much larger vendors with broader radio access portfolios. Bottom Line Ruckus has a strong financial position and gets strong feedback from service providers, especially on technology innovation; the vendor has been the most visibly proactive innovator of carrier WiFi technology, launching several new product and service initiatives during 2014/15. It is not surprising to see Ruckus achieving leadership in this Scorecard, given that it is a clear #1 vendor by revenue market share, has built a good reputation among its many customers, and has a track record of innovating WiFi technology its sole focus across enterprise and carrier markets. 5

8 METHODOLOGY Market Segments Covered The carrier WiFi market segments analyzed for this Scorecard include: Access points: wireless networking devices based on the standard; typically configured for WiFi client access, but can also be configured to backhaul traffic wirelessly between two nodes Controllers: appliances and/or software that provide centralized control of WiFi networks, including: configuration and management of interactive access points; management of wireless traffic, clients and RF environment; network access; security; and roaming Scorecard Criteria This Scorecard includes the 5 top carrier WiFi equipment vendors, each with $30M or more in 2014 carrier WiFi revenue. We did not include the next tier of players, such as HP, Nokia Networks, Motorola, and others. Our criteria are based on actual data and metrics. For each criterion, we scored vendors on a 5-point scale; 1 is the lowest possible score, 3 is an average score, and 5 is a perfect score. Specifically, we evaluate vendors on market presence and market momentum. Market presence: a company s current position in the market, including size, brand recognition, reputation, and financials. The market presence score is calculated using these criteria: Market share: a vendor s percentage share of the carrier WiFi equipment revenue Financials: an analysis of a vendor s financials; a strong financial position improves long-term viability and allows a company to stay ahead of the competition by investing in R&D and/or acquiring other companies/technologies; this score is based on the Altman Z-score non-manufacturing model Solution breadth: a measure of how many carrier WiFi equipment segments a vendor addresses; a broader solution set improves a vendor's potential and efficiency of its operations and allows it to differentiate by innovating across segments Buyer feedback: an assessment of a vendor s performance by carrier WiFi equipment purchase decision-makers, based on interviews we conduct with global service providers every year Product reliability: buyers assessments of a vendor s product reliability Service and support: buyers assessments of a vendor s service and support 6

9 Market momentum: a company s potential, including growth, reputation for innovation, and development of next generation technologies. The market momentum score is calculated using these criteria: Market share momentum: changes in revenue market share over time ac intensity: a measure of the contribution of ac sales to a vendor's overall carrier WiFi equipment revenue Buyer feedback on technology innovation: an assessment of a vendor s performance by carrier WiFi equipment purchase decision-makers, based on interviews we conduct with global service providers every year Based on the scores for each of the 8 criteria, we created 2 composite vendor scores, one for market presence and the other for market momentum, using the same 5-point scale, and weight the individual criterion based on its importance in the buying process. Reports Used The information in this Scorecard is based on findings from multiple Infonetics Research services, including: Market share, size, and forecasts: Carrier WiFi Equipment Biannual Worldwide and Regional Market Share, Size and Forecasts Small Cell Equipment Biannual Worldwide and Regional Market Share, Size and Forecasts Survey-based research: Carrier WiFi Strategies and Vendor Leadership: Annual Global Service Provider Survey 7

10 REPORT AUTHOR Richard Webb Research Director, Mobile Backhaul and Small Cells Twitter: richardawebb ABOUT IHS INFONETICS Infonetics Research, now part of IHS (NYSE: IHS), is an international market research and consulting analyst firm serving the communications industry since A leader in defining and tracking emerging and established technologies in all world regions, Infonetics helps clients plan, strategize, and compete more effectively. REPORT REPRINTS AND CUSTOM RESEARCH To learn about distributing excerpts from IHS Infonetics reports or custom research, please contact: IHS Sales: