InvestorPlace.com
Date: November 16, 2012
Wi-Fi products maker Ruckus Wireless came public today to a muted reception, with shares off roughly 4% in its first day of trading.
Still, RKUS looks like a solid company. The company already is a leader in the market for sophisticated Wi-Fi gear, and it’s still growing at a rapid clip. For the first nine months of 2012, revenues nearly doubled to $152.5 million, and it brought in roughly $7.4 million in profits after breaking even in 2011.
To get some perspective on this deal, I interviewed Dave Fraser, CEO of Devicescape — another top operator in the Wi-Fi market that manages more than 11 million hotspots and boasts customers like Nokia, Microsoft and Hewlett-Packard. Here’s what he had to say:
Q: What are your thoughts on the Ruckus deal?
A: It is always exciting to see a startup company make it to the level of an IPO, especially one that is selling to wireless carriers for a portion of its business. The early-morning market reaction to the deal seems to reflect the difficult tone in the stock market this week.
Q: Will we see similar deals over the next couple years?
A: The IPO market is certainly difficult to predict, but we do expect to see similar deals over the coming years. Mobile operators are focused on finding innovative solutions from technology providers that can help improve their networks for increasing demand, and to deliver services that can differentiate them from their competitors. One exciting area is integrating Wi-Fi networks with mobile networks to offer the best experience from multiple networks. We expect that a number of companies will prosper in this arena based on the considerable demand for these solutions.
Q: How is Devicescape similar? Different?
A: Ruckus is a leader in equipment and technology for public Wi-Fi. Devicescape delivers a cloud service to mobile operators that helps them better leverage public Wi-Fi and deliver a high-quality user experience to their customers. The solutions are entirely complementary.
Q: Why the importance and growth for Wi-Fi?
A: We are used to Wi-Fi in our homes and workplaces; however, Wi-Fi is playing an increasingly important role in public spaces and buildings. In particular, Wi-Fi is now being adopted as a complement to cellular networks, helping mobile operators deliver service in the face of exploding demand for data. Wi-Fi is a perfect example of the growing trend toward small-cell and heterogenous solutions to deliver richer media services over mobile networks. Hot-spot owners and mobile operators — everyone from Starbucks to Sprint — are interested in ensuring that their customers are able to make the most of their smartphone and tablet experiences.
View the original article here: http://investorplace.com/ipo-playbook/qa-devicescape-ceo-dishes-on-ruckus/