Will Belden treat Trapeze right?
Can a cabling company make the most of a WLAN vendor?
By Peter Judge, Techworld | Techworld | Published: 20:00, 09 June 2008
And there's another financial issue. Trapeze has been struggling to quote good financial figures, because of reporting rules, said Belden. At present a lot of Trapeze revenue does not show up in its formal accounts until a long while after it has reached the bank, because the company can't quote all revenue from a bundled deal until the whole thing has been installed. This can take up to a year.
To quote revenue sooner, and make its publish cashflow match reality, Trapeze has to satisfy vendor specific objective evidence (VSOE) rules. To do this, it has to prove that the hardware and software elements of its range have independent value. This has required it to renegotiate with resellers to get contracts that "compartmentalise" the products, said Belden, and the process will probably not be complete till the end of 2009 at which point it effectively has a windfall of revenue in its books.
So will it work?
Belden is doing a good job of selling this deal. The company showed a good understanding of the wireless LAN market and Trapeze's place in it, during its conference call. It painted a picture of a technology leader which was struggling to sell hard enough - and promised to fix that.
The company marshalled the right reports and statistics to show that Trapeze's future is viable and made the right promises to support its growth, in its materials.
Other vendors will pour scorn over the deal. There's no doubt that Trapeze would prefer not to have been bought at this stage, at this price. But it could leave Trapeze in a decent position.
The test will be whether Belden can keep upgrading Trapeze products, whether it can achieve integration with other people's products - to compete with Cisco's Motion announcement, for instance.
We're ready to give it a chance.