ReefEdge cuts staff, reworks strategy

The wireless LAN security and management vendor has trimmed its staff and is reworking its strategy, the latest sign that the WLAN market could be moving toward a dramatic consolidation.

Wireless LAN security and management specialist ReefEdge Networks Inc. has reduced the size of its workforce and

is modifying its strategy in order to make another run at the rapidly evolving WLAN market.

David Goretski, CEO of the Fort Lee, N.J.-based vendor, declined to specify how many positions were eliminated and refuted rumors that the company is closing its doors.

"We're continuing to support our existing customer base, while we evaluate the direction that we're taking the company in," Goretski said. He added that the layoffs were "not core engineering resources," but were part of the ongoing effort to refocus the business.

ReefEdge was founded in May 2000 by a team of former executives from well-known tech firms such as AT&T and IBM. However, the company has faced the loss of several key executives during the past year, including co-founders Inder Gopal and Sandeep Singhal, as well as its vice presidents of sales and engineering, respectively.

Goretski did not provide details on the company's new strategy or goals because he said they are still being solidified. However, Goretski noted that the market is evolving quickly, and its primary objective would be taking advantage of new opportunities.

For more information

Read how ReefEdge competitor Vernier keeps Wi-Fi users under control.

Learn why ReefEdge and other vendors have added FIPS security support.

 Craig Mathias, principal with Ashland, Mass.-based Farpoint Group, said ReefEdge's security and management software to date has focused on enhancing the capabilities of access points, providing security and mobility that was missing.

However, Mathias said the industry is now consolidating, and hardware vendors like Aruba Wireless Networks Inc., Airespace Inc. and Chantry Networks Inc. are incorporating functionality that had been offered by ReefEdge and its competitors, such as Bluesocket Inc. and Vernier Networks Inc.

Goretski said even though wireless switch vendors are adding functionality to their products, his company believes it can continue to find success by continuing to target specific industries. "The key for ReefEdge is to make sure we're not pretending we're something we're not," he said.

Despite his commitment to keep the company moving forward, Goretski did not rule out the possibility of a merger or acquisition. "We've had plenty of conversations, mostly presented from the standpoint of our OEM partnerships," he said.

Goretski said the company has discussed the changes with most of its partners and customers and received "some very supportive feedback," though he did not offer any details on the company's current finances.

Last November the company raised an additional $13 million in venture funding, led by Comcast Interactive Capital, and has raised a total of $40 million, as of late 2003.

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