Red-M Gets WAPI Happy
The Chinese government caused industry uproar earlier this year by insisting that all 802.11 kit used in the country must implement the proprietary wireless LAN security standard by June 2004 (see Intel's Chipset Diplomacy, SIA Fights China's WiFi Standard, and Chinese Security Snafu Looms).
WAPI is not compatible with other WLAN encryption standards, such as Wired Equivalency Protocol (WEP) or Wireless Protected Access (WPA) – thus, foreign vendors that want to use the standard will have to license it from a select group of Chinese vendors. Chinese network vendor Huawei Technologies Co. Ltd. and PC maker Legend Group Ltd. are among the companies with which foreign firms will have to partner.
Despite widespread U.S. belief that the standard is little more than a protectionist policy from the Chinese aimed at shoring up market share for domestic vendors, U.K. startup Red-M claims the dispute has been overblown.
"It isn't an unreasonable situation," argues CEO Karl Feilder. "There is indignation from the U.S. as to how anyone can dare come up with a different standard, but the world is different in different places... It is the nature of diversity."
Feilder states that it will take "two months at the minimum" before "formal certification" for its products is complete, which will enable the vendor to sell its WAPI-compliant intrusion detection system (IDS) kit to resellers and manufacturers throughout China.
IDS software, used in combination with a WLAN switch or appliance system, dedicated overlay hardware, or installed on laptops and handhelds, is used to warn administrators of attacks on the network and – in certain cases – prevent such attacks from taking place (see Wireless IDS Is All the Rage and Red-M Launches IDS).
In general, it is expected that it will be easier for vendors that offer centrally managed WLAN infrastructure kit to meet the Chinese requirements, since such firms will likely only have to make a software upgrade to their switches or controllers to update the entire system. Vendors that supply WLAN chipsets, cards, or standalone access points will have to work to ensure that each element complies with Beijing's wishes.
Back in March, Intel Corp. (Nasdaq: INTC) cited technical concerns as one of the reasons why it wouldn't be able to make its Centrino chipset WAPI-friendly.
Red-M's upfront stance on WAPI is unsurprising in light of its desire to beef up market presence in the region and turn things around from its past misfortunes (see Red-M or Dead-M?). The company opened a Beijing office in March 2003, and it claims to have already won a deal with a local manufacturer.
"About 45 percent of our revenue comes out of Asia, and we expect China to become a major contributor to this revenue stream in the next one or two years," comments Feilder.
Such revenue will be warmly welcomed in light of a new, as yet unannounced, round of funding. "We have just completed a B series round that we will be announcing fairly soon. The money is in the bank. It takes us to breakeven and beyond."
A previous cash injection was supplied by Apax Partners and Amadeus Capital Partners.
— Justin Springham, Senior Editor, Europe, Unstrung