Mesh Shakeout Looms
The concept of municipal mesh networking itself is already moving onto another stage. There are still a mass of deals to be had. (See Cisco & Pals to Unwire Silicon Valley.) Some of the larger U.S. depolyements are running into hurdles, however. (See SF Net to Go Public?.)
The recent "Wireless Mesh Equipment Tracker Market" from Heavy Reading estimates that the global WiFi mesh infrastructure market will worth be almost $1 billion by the end of 2008. The report says that there are currently nine major players [Ed. note: Some more major than others] in the market and six of those are startups. Typically, as a market matures and consolidates, public companies buy up the smaller startups that at the outset had a technology or customer edge while other large firms attempt to buy their way into the market.
Some argue that mesh shakeout has already started with Motorola Inc. (NYSE: MOT)'s purchase of Mesh Networks in 2004. (See Moto Gets Mesh.) All agree, however, that the real feeding frenzy is still to come.
"I see this market quickly becoming a three-player race between Cisco, Motorola and Nortel," says Ben Gibson, director of mobility marketing at Cisco Systems Inc. (Nasdaq: CSCO) "I believe that ultimately, Cisco's combination of WiFi, breadth of outdoor wireless portfolio and IP market leadership will carry the day."[Ed. note: Betcha didn't expect to hear that.]
"I can't see how there won't be a shakeout, as it is simply not clear to me how startups can play for the long haul in a market where having a mesh AP is just one piece of the required solution," adds Gibson.
The thinking here is that, as more carriers get involved in municipal networking, mesh will end up being just one part of the puzzle and operators will naturally gravitate to larger vendors.
That's not the only change that will alter this market, however, as Farpoint Group principal and Unstrung columnist Craig Mathias points out. He expects that that a shakeout will occur "18 to 24 months" from now.
"There's plenty of action available now," Mathias says. "The trigger will be the approval of the 802.11s [mesh standard] and lower prices, which will ruin the cost structures of the unprepared."
Executives at two of the leading startups in the marketplace -- Strix Systems Inc. and Tropos Networks Inc. -- also agree that consolidation is coming, but both expect to come out on top.
"I think that all emerging markets go through some sort of shakeout phase," says Bert Willams, VP of marketing at Tropos. "The flipside is that it may be a little early for things to shake out yet."
"The best strategy for a company is to continue to execute and innovate," says Nan Chen, VP of marketing at Strix.
Neither firm would directly say that they were in the market to be acquired. Nevertheless, the next couple of years will be a dynamic, and turbulent, second phase on the wild mesh frontier.
— Dan Jones, Site Editor, Unstrung