NEWS & VIEWS: "We are fixed on three new releases per year"

Aventail's development center at Bangalore has been operational for more
than 15 months now. The company has also had a sales and marketing presence
since September 2004 there. Chris Hopen, the company's co-founder and CTO, has
constantly worked to create differentiation for the company in the SSL VPN
space. Hopen spoke to Voice&Data about Aventail's ongoing activities and
plans during a visit to India. Excerpts:

How's the India center doing and contributing to overall product
development activities at Aventail?

The group here in India is picking up more and more projects and they are
all current development projects. They are working with the US team in parallel.
We are just finishing one major release, and we have a small team which has
already started working on the next release. We currently have the 8.0 release
and we are working on 9.0.

Chris Hopen

I was here for the first anniversary and to transition from one release to
another. I also came here to educate and spend time with the team.

Typically, how long does it take to move from one release to another?

We are fixed on three releases per year. There are people working on every
release in a 12-month period. Right now, it's very competitive.

Three releases a year is quite high. How do you manage issues like
backward compatibility?

The only place we don't maintain backward compatibility is when special
hardware gets in the way of it. We try not to take away featured functions from
existing customers and a big part of each release is the migration of customer
configuration information and data for all those deployments.

Having said that, many customers don't upgrade on each and every release.
The three-release-per-year schedule is all about new customer acquisition. Also,
it is meant to create a sustained engineering organization that will continue to
make minor enhancements.

How different a model do you have than your competitors?

We have Aventail services group and an Aventail products group and Aventail
India is a product group. The services group offers much more around the
technology. Today we sell both the service and product through channels.
AT&T, Sprint, MCI, Bell Canada, British Telecom all sell our service for us;
we don't sell direct.

The service is totally different from anyone else in the SSL VPN space and
this is a major differentiator for us.

If you do a break-up, what part of your business will the service
component account for?

For 2004, service revenue will probably be about 60 percent vis-à-vis
product business, but we have been in products for just a year-and-a-half. The
nice thing about the service business is that you know that 80 percent of
revenues are guaranteed.

But if you look at revenue growth, the service business grows at an
annualized rate of probably 25 percent, but on the product side, it grows well
over 100 percent; so it's hard to compare.

Have you broken even?

The service business is incredibly profitable; the product business is
little over and year-and-a-half old and hasn't yet reached profitability, but
we will.

When you are selling through a service provider, does it get co-branded
Aventail?

The only thing that gets branded is the software because the customer doesn't
really see the device. For instance, when we do it with AT&T, it will look
like an AT&T service being operated by Aventail. We have had requests from
folks at IBM to re-brand, but we have not done that yet. When it reaches higher
volume levels, it will make for an easier discussion.

Deepak Kumar