Another networking company? Why?
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Steve Martin | Aug-2023
A good origin story is easily told, retold, and recognized. Unfortunately, the Shasta Cloud story isn't a simple sound bite. Our story is more about the journey that our team took as the enterprise networking industry emerged and evolved. This journey shaped our views and taught us incredible lessons. However, it also left each of us frustrated with the slow pace of change in this industry.
Over the years, our team has taken part in some amazing startups that truly moved the industry forward. However, as these startups grew and were eventually acquired by large companies, innovation often slowed dramatically. Corporate politics, silos, the innovator's dilemma - call it whatever you want. So we learned that innovation, change, and rewriting the playbook are not things you should expect from legacy vendors. That’s why startups exist. Startups start with a clean slate, are motivated to question the status quo, and work hard to disrupt the incumbents. It’s not the easy path, so you need a team that is truly passionate about what they are doing and willing to persevere and take on the giants.
My personal journey
Each member of the Shasta Cloud team brings a unique perspective, a set of expertise, and battle scars that collectively helps shape Shasta Cloud’s strategy. I thought I'd share some of my personal story here, it’s been a fun trip with lots of learnings which I leverage every day as we build our company. Unless you've worked in the bowels of this industry, I expect some of this would be new for you and hopefully of some interest.
I started in the business more or less at the dawn of large-scale consumer internet access with dial-up modems. It was a time of excitement and innovation as we worked on doubling access speeds to a whopping 56 kbps from 28.8 kbps and ran factories non-stop building dial access concentrators for many of the top ISPs in the world. USR was eventually absorbed by 3Com, and innovation ground to a halt as we focused on cost control and profitability versus building the top line. Cue a repeating theme here where big fish eat small fish and innovation slowly dies.
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In early 2002, I got a call from Pat Calhoun who I knew from USR to see if I was
interested in joining an early stage company called BlackStorm Networks
(later renamed Airespace) as the VP of Engineering. Seven employees at the time.
Working with the likes of Pat, Bob Friday, Bob O’Hara, Bob Tinker, Brett Galloway and other industry heavyweights, we focused on inventing this thing we decided to call a Wireless LAN Controller. Airespace along with Aruba (Keerti Melkote and Dominic Orr) were the two brand new startup companies working on this at the time, both running as fast we could to drive the definition of the emerging enterprise Wi-Fi market. At Airespace, we pretty quickly decided that AP hardware was likely going to become commoditized and controller software was where the long-term value was. So we started to spin up some Taiwan ODMs to make generic enterprise Wi-Fi hardware loaded with our software stack. As part of the strategy, we jumped into the IETF and created LWAPP (which later morphed into CAPWAP) which was the first attempt at standardizing enterprise Wi-Fi AP to controller interfaces. It was a great idea but twenty years too early and was definitively killed when Cisco jumped in and bought us and immediately shutdown the AP commoditization effort as they wanted to keep the AP hardware margin for themselves and lock accounts into their (our) proprietary solution. This over time grew to a $2B+ business for Cisco and it’s still part of Cisco Wi-Fi solution (amazing that pieces of it are still around) alongside Meraki.
Around 2006, while I was living in the depths of Cisco WNBU post-acquisition, we unveiled our "innovative" new 802.11n AP internally. It looked like a porcupine with antennas sticking out of it. Who the hell would want to put this thing up on their office ceiling? I was disgusted with the internal hardware design and thought “We're Cisco and this is the best we can do? And who is going to adjust all of those little antennas to the optimum angle, and how would they even know what the optimal angle is?”
Opportunity knocked at that precise moment when Ruckus Wireless, a 15-person startup,
was seeking a VP Engineering. They had really cool ideas on how to productize
dynamic arrays of internal antennas, which not only sounded cool but also worked great.
Victor Shtrom and Bill Kish had made huge progress building an initial solution that optimized performance using cross-layer optimization, tying real-time L4 performance measurements directly to L1 adjustments to automatically adjust antennas and maximize client experience. Today this would be called machine learning, but in 2006 it was really innovative, looked cool, and just worked way better than anyone else’s solution.
I joined the company working with Bill, Victor, and Selina Lo and down the rabbit hole I went.
After a year with Ruckus, Selina led a pivot from a Telco’s/Residential focus to enterprise. I was initially skeptical about how we would compete with established vendors like Cisco/Airespace and Aruba having come from that world with an intimate understanding of how heavy a lift that is. However, Selina showed us the value of understanding market segmentation by steering us towards hospitality and mid-market enterprise, a brilliant strategy that allowed us to service the “unfortunate 50,000" as she called it instead of focusing on the F500.
Enter Ted Watson and Ron Gill at Ruckus to lead our new enterprise focus on the sales side. We jumped into the mid-market and we became a 100% channel-driven company. We created the wall plate AP as a completely new form factor as a focused solution for hotels and other MDU applications. The MSPs were a new kind of partner evolving in front of our eyes, and I saw firsthand the strength in partnering to reach large parts of the mid-market where these partnerships bring deep value.
Unfortunately, we eventually went through a period of multiple acquisitions which was painful and killed much of the company culture. But a shoutout to Dan Rabinovitsj for helping to save Ruckus when we got thrown off the Broadcom Island post the Brocade acquisition, largely making the best of a bad situation.
What did I learn?
My top-level lesson learned was to be bold, don’t be afraid to take risks, and above all focus on providing value that your customers can really use (thanks Selina!). Most critically, I learned the value of partnerships and how to build successful GTM relationships. Ruckus was a great ride and definitely an adventure. During my 12-year tenure at Ruckus, we grew to become a market leader and went public via an IPO. And along the way we acquired an Israeli startup building subscriber management solutions which started my longtime collaboration with Shasta co-founder Doron Givoni.
So why another networking company now? Haven’t you had enough?
Quite often people ask me why we decided to build a new company in the enterprise networking space. Haven’t you had enough? Isn’t it already a crowded market? Isn’t enterprise networking in general and Wi-Fi in particular a solved problem? What can you do that isn’t already offered by existing vendors and solutions?
What has changed in the past 20+ years?
Two years ago, my co-founder Doron and I started thinking about how the networking space has evolved over the years. Back in the late 1990’s, Aironet took early versions of residential Wi-Fi and turned it into a business solution. But as these networks grew, they were tough to manage. So Airespace and Aruba created the first WLAN controllers which allowed businesses to scale their networks more easily across buildings and campuses. Later Meraki rode the growth of cloud computing and took WLAN controllers into the cloud which allowed solutions to easily scale across distributed enterprises. More recently, Mist pioneered the comprehensive integration of analytics and AI into the network operation to further improve visibility and control.
Coupled with this progress on the management and control of modern networks, Wi-Fi and Ethernet standards and chipsets have steadily improved over the years to the point that LAN hardware has essentially become commoditized even as its performance continues to rapidly advance (WiFi7, 6 GHz, Multi-Gig, PoE++, etc) . I’ve seen AP hardware go from something we could easily differentiate on to now become a commodity based on the same merchant silicon design under the hood, making it hard to see any meaningful difference between vendors C/A/R. It’s clear that the value has moved elsewhere fulfilling our early vision from twenty years ago at Airespace, however all of the industry vendors’ business models continue to be structured around supplying branded hardware at high margin locked by proprietary software stacks, while controller and other software services are often cross subsidized and almost given away. This is the structural foundation of all vendors today, even some of the newer networking startups, and for the life of me, I can’t understand this except for the obvious fact that everybody’s making money so no one wants to change the status quo.
What hasn’t changed in the past 20+ years?
The way networks are designed and delivered has remained shockingly unchanged. For the average mid-market enterprise customer, designing, purchasing, installing, and managing a network requires a major commitment of time, energy, personnel, and of course money. Experts are required to plan the network, significant equipment and software purchases need to be made upfront, installers need to be contracted, and more expert resources are needed for the ongoing management of operations and system upgrades.
But increasingly, today’s businesses are looking to achieve greater efficiency in their operations and focus on what they do best. So they often turn to managed service providers for help to outsource their networking headaches as MSPs bring together the technology, the expertise, and the services needed to stitch complete solutions together. But the MSPs face their own set of challenges: Lack of sufficient skilled IT resources needed to scale their businesses, managing proprietary hardware and software stack lock-in dictated by the incumbent vendors, disjointed business systems that need to be painstakingly pieced together and maintained, and painful channel conflicts with the same incumbent vendors with whom they are ostensibly partnered.
Redefining Simplicity
But what if we completely re-imagined the technology stacks and the business models, effectively refactoring the whole networking industry into a leaner, more efficient machine that quickly and easily delivers the services and solutions that modern businesses require and only adds margin where value is created? What exactly would that look like? Is that even possible?
So back to the “haven’t you had enough” part of the question. That’s an easy hell no!! I’m incredibly excited about the challenge and opportunity to change the industry status quo with the Shasta team. The time is exactly right, we have a fantastic team that is on a mission, and I’m totally fired up about our future.
If you're an MSP considering or already offering Network as a Service to your customers, come talk to us at Shasta Cloud and see what the future looks like!
