CRN Exclusive: Cradlepoint CEO On Meraki Being Cisco's Biggest Competitor, SD-Perimeter Technology And An $89M Channel Investment

' Always Bid Cradlepoint'

Fresh off its $89 million Series C funding round, Cradlepoint CEO George Mulhern discusses new channel initiatives, his technology roadmap and winning deals over the likes of Cisco and software-defined WAN players.

The Boise, Idaho-based networking vendor has grown at over a 40 percent compound annual growth rate (CAGR) for the past five years and believes the enterprise will become completely wireless in the future. Mulhern said Cradlepoint's Software-Defined Perimeter technology is creating a "dark cloud" for connecting "Things" to the network that's winning over customers and channel partners.

"A lot of our partners are 'ABC' partners – Anyone But Cisco. We're trying to change 'ABC' into Always Bid Cradlepoint," said Mulhern, in an exclusive interview with CRN.

Would you categorize Cradlepoint as an SD-WAN, LTE or an Internet of Things focused company?

We have three strategic pillars that we're investing in. The first is SDN enablement, and it's just not SD-WAN – although we are playing in that space – it's also what we call Software-Defined Perimeter which is going to be very important to 'things.' It's a different approach on how you create a secure network for things. The second pillar is around LTE and 5G. We believe the only way you're going to create this elasticity you need when you are connecting your vehicles, and you're putting up a pop-up network or putting sensors up – wireless is going to be absolutely essential to that. The third pillar is around IoT. To reap the value of the long-term promise of IoT, it has to become more integrated to the enterprise network, and that's exactly what we're doing.

What's your Software-Defined Perimeter technology and how it's unique in the market?

TCP/IP (Transmission Control Protocol/Internet Protocol) has been a pervasive transport for decades now. It's great for a campus or in a branch office. It's not really that great for IoT because it allows to physically connect to the network, then authenticates you. For IoT, it needs to be the opposite – you need to be invited to that network before you’re authenticated and let in.

What SD-Perimeter does is essentially creates a dark cloud. So for us, our NetCloud SD-P solution is in the cloud, but it's an invite only network … It's an overlay to the physical network, and it's fully encrypted end-to-end. So for DDoS attacks and things like that, nobody would even know that this network exists. The real power of it is you can do micro-segmentation. It's a very powerful solution for IoT applications.

Who are you battling it out with most in the sales trenches?

There's a couple of different players. We do bump into Cisco and Meraki. In fact, I think Cisco's biggest competitor is Meraki. We have a branch routing solution that's fully cloud managed and highly robust and winning lots of deals in those areas. We are the partners' SD-WAN solution and we're going in and winning deals against all the big guys.

We see the pure-play SD-WAN folks as well. Many times, they use us for their LTE capability. Then on the end-to-end IoT side, it's the usual cast of characters like Sierra Wireless and Digi and those folks.

You said Cisco's biggest competitor is its own Cisco Meraki unit. Can you elaborate?

Cisco is a great company, and we have a number of former Cisco employees at Cradlepoint. But they're sitting in the middle of this transition where customers are really moving from an era of build your own – where you bought the boxes, the data plans and data services then the customer built their own network – to one where people are buying networking as a service. That's kind of what Meraki is doing. You subscribe to their cloud platform and a very simple point and click. But customers are having to decide what way they want to go and many customers have a very large investment in Cisco. Cisco's offering both, but at some point the customer will have to make a decision.

Are you winning against the pure-play SD-WAN players like the CloudGenix, Viptela and Silver Peaks of the world?

Yes. It's crowded. Really what they're doing is kind of like Branch 3.0 – they're optimizing that MPLS network combining with broadband. Where we are having a lot of success is, for a company that wants to move to broadband and combine a wired broadband with an LTE connection, you get all the bandwidth you're going to need that's a cost-effective solution. Then we can create policy and direct what traffic is going over what channels.

Long term, we think people won't be building wide-area networks. It will just be the internet in the future.

So you think organizations are going to all go wireless?

Our view is that, in the future, the enterprise is going to be all wireless. That the same thing that happened on the LAN side is going to happen on the WAN side. It's too agile, too flexible, and it's become too cost effective not to go that way … We just signed a deal with a major customer that has thousands of outlets all across the US, and they're going all wireless.

Traditionally it's been connecting to branch office or a retail outlet to the data center to corporate, but now our customers are trying to figure out how to connect things to the network. How do they connect their vehicles to their network. People are working in a mobile way much more now.

You just received $89 million in funding. How is that going to help Cradlepoint channel partners?

When we did this round of funding, it was to invest in two things: to advance our NetCloud platform that crosses all the software and cloud things we're doing. The other was to invest in our go-to-market. We're a 100 percent channel company. As we get bigger, we know the only way to reach the number of customers we need to reach to build our business is to invest in the channel.

Has your channel community grown in numbers over the past 12 months?

It's grown by at least 20 percent over the last year.

As we're seeing more and more customers start to look for LTE solutions, more and more channel partners are trying to get in and build practices around that business. For the deal we just signed with a customer with thousands of outlets across the country, it's all LTE-based. There's not a wire going into any of those locations. More and more partners are starting to see this is an area of interest.

How are you helping partners transition and evolve to this software-focused cloud market?

When we talk about these transitions, the impact in the channel is huge right now. Partners are having to figure out how to move from a product-based business to a cloud-based business, then there's M2M and IoT that is starting to come together.

We have a set of M2M partners that we grew up with and also enterprise partners. The M2M partners are trying to get better at the enterprise, and the enterprise partners are trying to get better at IoT. We're moving from this build-your-own model to an as-a-service model. We're seeing MSP's becoming more important to the customers. We're investing in our programs and trying to build out our reach specifically to more enterprises.

If I want to make the most money as a Cradlepoint partner right now, what should I be selling?

You sell the cloud first because that's where the real value and visibility of the value is to the customer. Zero-touch deployment, complete visibility into what's happening on your network, analytics on what's getting used by who and where – that's really the value. It's not necessarily in the box itself … All of our partners are trying to move to recurring revenue opportunities, and that's what our NetCloud platform provides to our partners. We’re fully aligned to make sure partners can participate in that recurring revenue stream.

What's one big channel initiative that you're investing heavily in?

We're making a pretty substantial investment is really updating, revising and approving our [certification and enablement] Cradlepoint University program because it's complex and the more our partners that can learn about how to deploy, manage and support our solutions –the more they sell. We’re putting a lot more effort into Cradlepoint University so that it's not just the technical side, but also the sales side for our partners to help them make money.

What’s your message for the channel?

A lot of our partners are 'ABC' partners -- Any But Cisco. We're trying to change that into Always Build Cradlepoint … At the end of the day, we're taking a unique approach to the market that's all about providing agility, flexibility, security and scalability to customers as they integrate IoT into their networks and make LTE wireless a bigger part of their networks. There's a huge opportunity for partners here.