WaveRider flips the switch on direct sales

TORONTO — Wireless broadband developer WaveRider Communications Inc. is connecting to a new type of business model, one that is firmly aimed at the channel.

WaveRider, based in Toronto with offices in Calgary and Australia,

was mired in the high-tech slump and forced to do major staff cuts. Today, at its Annual General Meeting of shareholders the company announced a new focus on indirect sales.

“”Sell, sell, sell is the strategy,”” said Charles Brown, executive vice-president of WaveRider said at the meeting.

“”We have transitioned from direct to indirect and we are building a channel of highly qualified VARs with a strong local presence to revamp sales,”” he said

WaveRider will still have a direct sales force in Toronto and Australia, however it will be there to augment and expand channel opportunities. The sales process with WaveRider products is a long cycle, Brown said, and the direct sales force can help speed it along for VARs who are establishing a practice in this area.

Wai Sing Lee, an industry analyst for Frost & Sullivan Canada, said WaveRider is playing in a good space. The wireless ISP (WISP) space is a fast growing area in the U.S. There are well over 600 WISP in the U.S.

These WISPs are predominantly made up of companies, but also individuals, especially in rural areas, Lee said.

According to Frost & Sullivan figures the WISP market hovered around US$250 million in 2002 and is expected to grow between 10 and 15 per cent.

“”For WaveRider they have to start to differentiate themselves from the802.11x crowd or make people understand what they are selling,”” he said.

Lee added that the company’s change from the direct model to indirect would help them differentiate. “”For a small company it is a wise strategy to move away from direct. They do not have the resources. They have to partner up, but they still have to be careful of the partners they choose,”” he said.

Lee said he was surprised that WaveRider’s revenue was only $9 million and said VARs would help them gain more exposure.

Currently, WaveRider revenues are 80 per cent direct and 20 per cent indirect, but Brown said that could flip flop as fast as the end of this year. He added that six months ago direct sales were 95 per cent of overall revenue.

“”We eventually won’t have any direct sales,”” Brown said. WaveRider has 60 VARs in North America and through its distribution partner Alliance Corp. in Mississauga, Ont., have an additional 300 other VARs to tap into.

The company’s agreement with Alliance is an exclusive one that will end in six months. However, Brown said he has no plans on adding another distributor.

WaveRider’s product line up and accessories typically net margins of 25 to 30 per cent for VARs, Brown said.

The company enhanced its non-line-of-sight Last Mile Solution and NCL line of products. The new version can now deliver non-line-of-sight wireless broadband service to up to hundreds of subscribers using a single base station.

WaveRider, in July, acquired Avendo Wireless Inc., also of Mississauga, which was developing a new patent-pending, advanced non-line-of-sight technology. The acquisition, according to WaveRider, will help them expand its product line and strengthen its financial position. Avendo will provide a $1 million of cash upon closing.

The company also completed the private placement of U.S.$1.6 million of convertible debenture financing. This latest round of financing is for new product development.

Comment: info@itbusiness.ca

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