Riding The Wireless Wave
September 25, 2002
It's a sign of how real and how big the fixed wireless market has become that a niche player like TerraWave Solutions can not only exist but thrive.
It's a sign of how real and how big the fixed wireless market has become that a niche player like TerraWave Solutions of San Antonio, TX, can not only exist but thrive. TerraWave, formed a little less than two years ago, is a value-added distributor of accessories for 2.4 and 5.8 GHz wireless networks.
The company, funded by its four partners, has been profitable virtually since day one, says TerraWave president and co-owner Chris Marco. Revenues have more than doubled year over year. "We're going to far exceed our forecasted goals for this year, just because of the tremendous growth in the industry," Marco says.
TerraWave is a spin-off from another company formed by the same four partners. GigaWave Technologies, also of San Antonio, is a training company specializing in fixed wireless and, more recently, mobile wireless. GigaWave is a Cisco Learning Partner. It develops and delivers Cisco Aeronet training programs.
There is, not surprisingly, considerable synergy between the two companies. Students of GigaWave training programs become TerraWave customers and GigaWave instructors also function as TerraWave sales consultants. In fact, the value-add that makes TerraWave such an attractive partner for resellers is exactly its rare depth of experience and expertise, Marco claims.
The recent surge in the WLAN market sometimes makes us forget that the industry does have some history, albeit not a very long time in the larger sweep of computers and networking history. The fact that wireless resellers need the depth of expertise from a distributor that TerraWave offers is perhaps a sign of how new the wireless market still is and how inexperienced some of its participants.
"Many of the people involved in the WLAN business today really need a lot of help in integrating solutions," Marco says. "All of our guys are extremely experienced. If a customer comes to us and says, 'Hey, we've got this situation, what should we do?' -- we can help. It's an unusual consultative-type sale for a distributor."
While some of the TerraWave expertise and experience is given away as part of product sales and technical support, the company also offers fee professional services -- consulting to its reseller and integrator clients, not to their end customers. Visiting an end-user site is a rarity, Marco says.
TerraWave's other products include amplifiers, antennas, enclosures, towers, splitters, site survey tools and -- under recently-announced agreements with AirMagnet of Mountain View, CA, and Cambridge, MA-based Funk Software -- WLAN administration and security tools. They offer virtually anything and everything needed to build a wireless network.
The company distributes products from just 13 "best-of-breed" suppliers. They also include Cisco Systems (site survey tools) and MAXRAD (antennas) of Hanover Park, IL, as well as TerraWave's own custom-manufactured site survey tools. The small roster of suppliers is another of the secrets of the company's success, Marco says.
"Anybody can ship boxes," he notes. "Our perspective has been that if we went out there and signed up ten different manufacturers for every type of product, there would be no differentiation for us. And if you distribute 50 or 100 product lines, you can't give the attention that a lot of these smaller suppliers need. We've always believed that fewer relationships make much stronger relationships."That doesn't mean there is exclusivity on either side, though -- or at least not on paper. "Some of [our supplier deals] are more on a handshake basis," Marco explains. "We say, 'We're going to represent your product as the best out there. We're not going to try and find three other products just like it.' In return for that, we get -- not exclusivity, but we get some benefit back from that."
Terrawave's well over 1,000 customers include small pure-play WLAN resellers, networking VARs turning to wireless, and Fortune 1000 systems integrators involved in large-scale projects. While it does sell overseas occasionally, the main focus will remain North America, primarily in the United States and Canada, Marco says.
The company finds its customers in a number of ways. Participants in GigaWave training programs still make up a significant chunk of the customer base, but TerraWave also buys distribution lists and mounts e-mail and direct mail marketing programs, participates in joint marketing programs with its suppliers and exhibits at both multi-vendor and vendor-specific trade shows.
As a Cisco Ecosystem Partner -- a respected supplier of complementary products and services -- TerraWave's products are represented at Cisco's San Jose wireless integration lab. "Cisco takes literally hundreds of customers through there on a monthly basis," Marco notes.
The company is looking to step up marketing efforts another notch. The recently released catalog of products -- downloadable in PDF format from the Web site -- is an example. It has been "extremely popular," Marco says.
The value proposition for customers is fairly clear: virtually every product you need for building wireless networks (besides the core networking equipment itself), a consultative selling style, plus expert after-sales technical support.
The value proposition for suppliers is similar. Many have adopted a business model that requires them to sell through distribution anyway. Even if they also sell direct, they provide incentives for end customers to go to a distributor. TerraWave is an attractive partner because its consultative selling style and superior technical support help ensure customers are satisfied.
Also, because its sales engineers understand the technology so well, and what it takes to build successful wireless networks, TerraWave often ends up selling more products. "When customers come to us for a specific item, we'll often end up saying, 'Have you thought about this?' And we're able to close the sale not just for that one item but for a whole set of items."
This is certainly a benefit to TerraWave's suppliers. While it may not sound like a great benefit to reseller customers, in fact it probably is in most cases. Not buying what you really need to do the job right is usually false economy.
TerraWave expects continued strong growth. Its plan for the future calls for stepped-up marketing, but no aggressive effort to increase its portfolio of product offerings.
"We're always on the look-out for products that fit in our mix and suppliers with the same focus on the marketplace as ours," Marco says. "A lot of manufacturers come to us. Some we work with, but some we didn't think fit, or we didn't think were best of breed."
That may be TerraWave's greatest strength: it doesn't sell just anybody's products.
Want to get started with your own WLAN deployment? Join us at the 802.11 Planet Conference & Expo, Dec. 3-5 in Santa Clara, CA. One of our workshops will be an Introduction to Wireless LANs and the IEEE 802.11 Standard.