CEOCFO: Mr. Mulhern, what is the concept at Cradlepoint?
Mr. Mulhern: Cradlepoint was founded eight years ago and we provide a set of cloud enabled, multi-WAN supported networking and routing solutions to distributed enterprises. Our core competency, or what we do better than anyone else, is optimizing the 3G/4G cellular link for 24x7 enterprise network environments.
CEOCFO: What are some of the challenges in doing that conversion and what do you understand at Cradlepoint that others may not grasp as well?
Mr. Mulhern: Carrier and operator networks are constantly evolving and we work very closely with the Carriers to stay ahead of that curve. Our secret sauce enables two critical things. For the Carrier partners, it is about ensuring that our solutions make the most efficient use of their networks and spectrum. For our customers it is about providing the highest reliability, quality and performance while at the same time minimizing and optimizing their costs when using the cellular networks. We have significant intellectual property in these areas, but even more important is the know-how we have developed over the years, the support we provide our partners and customers and our responsiveness to this rapidly changing environment. I sometimes liken our competitive advantage to the secret formula for Coca-Cola. Each individual ingredient may not be unique, but the way we integrate all the individual ingredients really sets us apart.
CEOCFO: What is the competitive landscape on many companies in the overall field?
Mr. Mulhern: Well there are many companies in the networking space that are calling on the distributed enterprise. But again, we were really the first company very focused on optimizing that 3G/4G link for enterprise networks and we target a sub-segment of the distributed enterprise that we call “Small Footprint Distributed Enterprise” (SFDE). The SFDEs are characterized by lots of locations, no local IT support, have to have a connection to the Internet and are typically involved in customer transactions so PCI compliance is important. Also, because we are a relatively young company we don’t have a lot of legacy networking solutions to slow us down. We are focused and delivering solutions for the network of the future that will be more about wireless, more cloud managed and software defined, more about security and analytics, and that overtime, will start to integrate more and more of the “Internet of Things” solutions that there is a lot of hype around today. There are certainly many competitors out there, but I believe we have a unique and well-differentiated position in the market.
CEOCFO: Was it a deliberate decision to work with that market or was it more opportunistic?
Mr. Mulhern: Well, like most companies where we started, is not where we are today. Our first products were focused on the consumer market and in fact we developed the first MiFi type solutions, or mobile hotspots. Early on we just recognized that based on our engineering capability and where the market was headed we really had a larger opportunity in the enterprise space. So we began by developing a business continuity solution, so if the customer’s wired network failed, they would automatically switch over to the 3G/4G network. We focused initially on the retail vertical and then moved into the finance and insurance verticals. However, what we found is that the Small Footprint, Distributed Enterprise is more of a horizontal market that crosses many verticals. Therefore, our enterprise customers include restaurants, banks, insurance companies and even transportation companies with hundreds or thousands of branch locations. Buses now are becoming like a mobile branch office. In many cases it can be a kiosk, which is essentially a retailer in a box. In addition, we specialize in machine connectivity where higher bandwidth is required. An example would be digital signage.