A New Voice in the Boardroom

In Silicon Valley, if you leave the office before 6:00 p.m., you will be labeled a slacker. It's a hard and fast rule that was ingrained in Ben Guderian after 10 years of working at GTE, NEC and several Valley start-ups. So in 1992, during his first day at his new marketing job with the fledgling Boulder, Colo.-based wireless solutions developer SpectraLink, Guderian experienced some extreme corporate culture shock.

“I was sitting in my office in Boulder doing the things you do when you start a new job — filling out HR paperwork and reading manuals and tech docs — and I noticed it was nearly 6:00, so I could finally leave,” said Guderian, now SpectraLink's director of product management. “When I came out of my office, there was no one else there, and the front door was locked.”

It's not that SpectraLink is full of slackers, Guderian said. The company just has a different idea of what constitutes hard work. In Silicon Valley, he said, the appearance of hard work was often more important than the work itself. At SpectraLink, however, long hours are put in when they are demanded to meet deadlines and commitments.

SpectraLink's differences from Silicon Valley were more than geographical or philosophical, however. While the start-ups and software darlings were developing technologies for the mass consumer and the giant global enterprise markets, SpectraLink was thinking smaller. A lot smaller. Its proprietary wireless local area network technology instead targeted vertical market customers, making its way into hospitals, industrial plants and home improvement stores all over the country.

But today, as Silicon Valley's light continues to flicker, SpectraLink is starting to look a little more like the Northern California firm it always refused to be. With the advent of the 802.11 standard and Wi-Fi's proliferation across the globe, the company has started thinking bigger. A lot bigger.

SpectraLink wants to go international, and it wants to go after the broader corporate enterprise market. It wants to play in the same arena as the giants in Silicon Valley. The company has even found itself in direct competition with the biggest networking behemoth of them all: Cisco Systems.

SpectraLink is making the leap at the perfect time. 802.11 technologies are penetrating enterprises all over the world, and for the first time, corporate culture is embracing the idea of mobility in the office. The wireless network is no longer an idea welcomed solely in warehouses and hospital corridors.

Ironically, the mass market was exactly where SpectraLink wanted to be when it opened its doors in 1990. The company envisioned bridging the gap between cordless and cellular, developing a frequency-hopping spread spectrum technology in the lower 900 MHz band that integrated back into the PBX.

But SpectraLink soon realized that the solution would be too expensive for businesses to justify the costs — and at that time, wireless communications was still more a novelty than a critical business tool. Selling a wireless office voice network was going to be very difficult.

By the time Guderian got locked in the building in 1992, SpectraLink's first commercial products were being released. The question he and his new colleagues had to answer was whom to sell them to. “It wasn't going to find a place in the mass market,” Guderian said. “It had to be used in an environment in which mobility was important enough to justify the cost.”

The answer was healthcare. In the early 1990s, hospitals across the country were launching new patient-focused initiatives that demanded doctors and nurses be more immediately accessible to those in their care. The new initiatives required a better way of tracking down medical staff than the standard voice paging system most hospitals used, and SpectraLink had a system that seemed to fit perfectly.

In 1993 and 1994, SpectraLink was devoted entirely to servicing the healthcare industry, and today 34% of all hospitals still use its Link technology. The company equips doctors and key nursing staff with wireless handsets, tracked by access points distributed throughout the hospital. Medical staffers essentially take their desk phones with them on their rounds, enabling real-time communication with colleagues. That means doctors can spend less time running from one page to another, and nurses are no longer tethered to their stations, freeing up more time to make rounds.

As the decade wore on, SpectraLink expanded into other vertical markets, such as industrial services, big box retail and education. Some 300,000 handsets using SpectraLink's proprietary technology are now in the field. But with the advent of 802.11 standards and the proliferation of Wi-Fi, SpectraLink sees an opportunity to go back to its original plan and pursue the broader enterprise market.

“It seems that all of the stars have aligned for SpectraLink,” said Sarah Kim, an analyst with The Yankee Group. “The market seems to be finally ready for their product.”

SpectraLink's new 802.11 product line, NetLink, targets both its traditional vertical markets and the general office. The company's revised strategy is very simple, Guderian said.

“We decided we'd only make the handsets,” he said. “There are already a lot of companies out there doing a good job at infrastructure. We didn't want to compete with those companies. We wanted to partner with them.”

So SpectraLink developed an IP wireless handset that, with a simple software upgrade, will work with any vendor's access points. The company also began working with other vendors to establish a voice-over-IP standard for all Wi-Fi equipment. “Putting voice and data over the same local area network is going to be problematic if you can't guarantee that the voice packets won't be held up by the data packets,” Guderian said.

Furthermore, SpectraLink developed a gateway that works with any call center manager, integrating seamlessly with both IP and legacy PBXs. SpectraLink also has begun working with vendors' voice over IP technologies, eliminating the need to deploy gateways, and is even developing push-to-talk capabilities for its devices.

There's just one obstacle standing in SpectraLink's way: Cisco Systems.

Consider that after its initial launch in the vertical market sector, SpectraLink saw its competitors in the WLAN telephony space dwindle. Companies like Nortel, Lucent, Avaya and Ericsson all dropped out of the space. The sole exception was Symbol Technologies, which still produces its own proprietary network technology. With the advent of IP and 802.11, those companies chose to focus on data infrastructure instead of voice handsets and gateways. Now SpectraLink has partnerships with most of its former competitors.

But Cisco unveiled its 7920 IP phone in April, the same week SpectraLink released its NetLink phones. While Cisco is one of the company's partners — SpectraLink adopted Cisco's proprietary voice-over-IP technology to eliminate the need for gateways on the latter's IP networks — SpectraLink isn't daft. Cisco knows a market is developing, and it isn't leaving it open to one small vendor.

Guderian, however, isn't too worried. Sure, he'd prefer it if Cisco wasn't going after SpectraLink's prospective customers (not to mention its current ones, since Cisco is pursuing vertical markets as well as its traditional corporate enterprise sector), but Guderian said Cisco views its product as one element in a complete end-to-end solution. Its phones only work with Cisco access points, which in turn work only with Cisco call center managers. If it's a battle to gut and rebuild the entire communications infrastructure of a company, Cisco has a big advantage. But even if a company is using all Cisco access points, if it uses different gateways or IP PBXs, SpectraLink would be a more natural choice, Guderian said.

Still, Guderian admits that Cisco poses a formidable threat. Even if SpectraLink develops better products, establishes better partnerships and builds better relationships with its customers, the minute Cisco comes calling, customers are going to pick up the phone. But Guderian believes SpectraLink has a good shot — and if anyone at SpectraLink knows how to play Silicon Valley's competitive games, it's him.

“We're going to have to battle it out in the general office environment,” Guderian said. “But our product has a lot of advantages, and I think customers will see that.”