Interview with
LightPointe, leader in Free Space Optics…
Capital Christian L. Rook Managing Director, LightPointe Europe GmbH
talks to Luca Goldoni, Contributor, Ariadne Capital
Christian Rook (pictured) is Managing Director for LightPointe
Europe GmbH, responsible for all operations of the facility, which
serves as base for the company’s international operations, research
and development, sales and marketing. He joined LightPointe in October
2000 as Business Development Director for Europe, responsible for
creating, planning and implementing the company’s strategic alliances
and sales organization strategy for Europe, the Middle East, and Africa.
Prior joining to LightPointe, Christian was Business Development Director,
U.S. Region, for the Industrial Investment Council, in New York,
responsible for identifying and recruiting new investment and
businesses to the former East Germany. Previously, Christian was
Deputy Managing Director/CFO of the Economic Development Corporation
Mecklenburg-Vorpommern, of Germany.
Christian holds a Master’s of Arts in German-American
Studies from the Pennsylvania State University, and an undergraduate
degree from Freie Universität in Berlin, Germany.
Could you introduce a bit of
the history of LightPointe and in particular the history of the
European office?
LightPointe was founded in 1998
in Boulder, Colorado, by Heinz Willebrand, Ph.D., who serves today as
the company’s Chief Technology Officer. President and CEO John Griffin
joined the company in January 2001, bringing 30 years of experience
with such companies as ADC and US West. LightPointe’s executive team
has extensive experience in developing and selling products to service
providers and enterprise customers, both domestically and globally.
To date,
LightPointe has received US$51.5 million in venture capital and debt
financing. A total of US$45 million in VC funding has been secured
from Cisco Systems Inc., Corning Innovation Ventures, Sevin Rosen
Funds, Ampersand Ventures and Telecom Partners. Debt financing of
US$6.5 million has been obtained from GATX Ventures and Silicon Valley
Bank.
In July of
2000, LightPointe completed the strategic acquisition of the Optical
Products Division of Teleconnect GmbH of Dresden, Germany, which today
serves as LightPointe's European subsidiary and manufacturing entity,
LightPointe Europe, GmbH.
Through the
acquisition, the Optical Products Division of Teleconnect GmbH became
a wholly owned subsidiary of LightPointe Communications, Inc. The
acquisition gave LightPointe more than 30 years of knowledge, patents
and experience in free–space optical networking products and
development. It also provided a geographically strategic location from
which LightPointe can deploy optical networking products and entire
systems tailored to meet the needs of European customers.
How has Europe received the
FSO concept so far? What has been LightPointe's progress in
Europe?
The European market has been very receptive to FSO
technology, although continued education and awareness is needed for
FSO to become a standard, rather than a niche, technology. Because of
the high bandwidth capability and ease of installation that FSO
provides, in comparison to fiber, there has been increasing interest
from the enterprise sector (LAN-LAN) as well as from carriers (last
mile/wireless backhaul) to deploy FSO equipment. Interest in FSO
applications for cell site connectivity is also increasing.
LightPointe alone has over 30 resellers/integrators in EMEA with the
strongest revenue being generated in Germany, Italy, Spain and the
UK.
How big is the market
expected to be in the next 5 years?
By 2005, LightPointe
expects the worldwide TAM to reach approximately $2.5 billion.
What is LightPointe's unique proposition/competitive advantage?
LightPointe’s Flight™
Family is the only FSO product line that is protocol agnostic –
capable of transmitting a protocol over any network topology
(rooftop-rooftop, window-window, rooftop-window). We differentiate
ourselves by being a solely Layer 1 player – with the expertise and
patents for FSO equipment and a broad network for providing end-customers with service provider assistance for Layer 2 and
Layer 3
solutions. We are well funded, established in the enterprise sector,
and have Cisco Systems and Corning on board as strategic partners.
The
products range from 10 Mbps to 2.5 Gbps, and serve distances up to
4,000 meters. LightPointe offers the most dynamic portfolio of
products – from the cost-effective solution for LAN with it’s
FlightLite (155 Mbps) system to the carrier class FlightSpectrum (2.5
Gbps) with a spatial and path diverse four-beam system. All
LightPointe products are manufactured in Germany and are ISO 9001/TÜV and Class 1M certified. From a manufacturing standpoint, we can
provide all units immediately, and scale up to 750 systems a month if
needed.
Who is your target customer? Has your target customer changed as the
technology becomes more accepted?
LightPointe's target customers can best be described within our
targeted markets, which consist of enterprise (military, banks,
universities, hospitals, SMEs), fixed line carriers (CLECs, ILECs,
small carriers) and ISPs and mobile wireless carriers (for which LightPointe has developed the FlightStream system). The
natural first
customers were on the enterprise level, but through strategic
relationships with Cisco, Corning and Qwest, we anticipate more
carrier wins over the long-term as the technology becomes more
accepted.
What progress has been made in the last year in terms of sales or
number of customers?
Obviously specific numbers are very confidential. We can say
that a lot of educating still needs to be done but on the other hand, the
economics and the success stories are so compelling that almost every
single carrier (in particular the wireless operators) in Europe has a
tender offer or an internal study to understand, develop and apply FSO.
Everyone is very active in the space and the technology is gaining
strong momentum; however, not many are currently buying the
products. Our key market remains the enterprise market where the
business case makes the purchase very compelling.
What is the most difficult part for the salesperson when facing
prospective customers? What has been your sales strategy?
FSO’s
biggest obstacle is technology education, which LightPointe combats
with a combination of marketing initiatives (information about trials,
customers, strategic partner wins and product performance). Our
sales strategy in EMEA is as follows: Direct Sales are exclusively to
"Key Accounts", which would consist of the Mobile Wireless and Fixed
Line Wireless Carrier markets. Through a combination of Business
Development activities and Sales, Marketing and Engineering contacts,
wireless and radio competence teams in the above market segments are
approached to present the effectiveness of LightPointe solutions both
in a technical nature and for the value proposition that exists.
Resellers and System Integrators are chosen based on a quality
assessment (market position, regional position, existing vendors used,
turnover, etc.) and most importantly, which vertical market they serve
(universities, hospitals, military, financial services, etc.)
Resellers and SI's are required to have FSO training courses and
purchase demo equipment (usually the lower end FlightLite system).
Through the LightPointe partners, we attack the baseline enterprise
market for FSO and increase awareness of the technology in local
markets. We do also work with System Integrators to approach the
Mobile Wireless and Carrier markets, as local contacts and cultural
acceptance are inherent in building relationships.
Weather conditions are often mentioned as the real obstacle for this
technology. How serious of a problem is weather conditions? How is
it being solved?
The one weather condition which remains an obstacle is fog, but this
does not mean that FSO products can not function in fog conditions.
Based on more than two years of field studies and installations, our
products can provide carrier-class availability when deployed in a
network. This availability is achieved through our multi-beam
system—the only one of its kind in the industry—link distances,
weather data and network management tools.
LightPointe has run a number of trials in areas which experience
frequent fog (Seattle) and has amassed weather information to
determine the equipment and maximum distances for various solutions.
In addition to running trials to test equipment, LightPointe has
reacted to this concern with the development of the FlightNavigator
(available Q3 2002). The FlightNavigator system uses
VISIONet tool which collects visibility measurement data in targeted
cities and an FSONet tool package which permits calculation of link
availability and associated link distances for each version of
LightPointe’s products. This system will be available to partners
online.
Our products have been proven
through both deployment and successful field trials with carriers.
They operate in a variety of weather conditions, from -13°F to 122°F
(-25°C to 50°C).
What is the competitive landscape in Europe? What has been the reaction from the
"traditional" Wireline broadband local loop equipment manufacturers?
Almost every traditional equipment manufacturer has invested in an FSO
player. Our key investment relationship is with Cisco. Local loop
equipment manufacturers are realising that there is not a single
solution to every problem and that you need to have a portfolio of
technologies to both maintain your flexibility and to be able to offer your clients an
integrated solution. Despite the partnership, the competition is very
healthy. In fact, we often find ourselves directly in competition with
other equipment manufacturers, including Cisco.
Please
note that the views and opinions expressed in this article are those
of the individual being interviewed and do not necessary reflect the
views of Ariadne Capital.
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