Great. Good afternoon. Thank you, everyone. I'm Sam Chatterjee. I cover technology hardware at JP Morgan. With me for the next fireside chat is Calix. I have Michael Weening, who's the President and CEO. I have Cory Sindelar, who's the CFO of the company. Thank you both for being here. Jim, thank you for being here as well. I think where we'll start is relatively sort of with a more of introductory question here. Most people in the room can reuse a refresher of what Calix does. How are you positioned to disrupt the legacy broadband service market, and particularly how you make it a win-win for both the broadband companies as well as the consumer or the subscriber of the service at the end of the day?
Can you just start with that, and we'll go into more sort of.
Sure.
Questions.
Yeah, sure. The paradigm for broadband providers has always been one of just providing a pipe, right? What they do is if you look at whether it's a mobile provider or a broadband provider, everything that they do is speed-oriented. They provide you capacity, they provide you connectivity, and really they struggle to go beyond that for the most part. What we do as a platform software and cloud company is we enable them to radically change their business model and embrace the consumer in a very different way. In essence, going beyond that pipe, beyond speed and reaching into the experience, changing both the paradigm inside the home, the services that they provide, which obviously are monetizable for them, but also give these great experiences.
For example, our customers on average are, you know, Net Promoter Score is north of 50. In fact, we pressed release last week one customer with an NPS of 91, which if you're familiar with the NPS model, that's like a cult if you're in 91. Whereas the AT&Ts of the world are like a -6, -5, right? Then on top of that, you have this opportunity in the business side where there's a massive disruption opportunity because the way that business services are delivered is traditionally in an enterprise model, and enterprise doesn't scale down into small business very well. A managed service model, as we're doing there, really creates a amazing new opportunity for broadband providers to serve businesses.
Okay. Okay. Great. Let me. It seems like the investment community sort of misinterprets what the Calix business model is as well because they still want to group Calix with legacy sort of broadband equipment or call it sort of box companies.
Yep.
I think you've, if I quote you've used the term, it's like comparing apples to a jackfruit.
Yes.
Like, how do you see Calix being positioned differently? How should investors actually view it in terms of what's the industry group you're more closer to? What's sort of the growth driver for you related to these box companies?
Sure. I think the best way to understand what Calix does is actually the compare for us is an appliance in a cyber company. The concept of you put an appliance in, and then there's significant monetization on top of that. To explain that, I can go back to, you know, we're a 23-year-old company, right? This is the third multi-billion dollar company that Carl founded, our founder. We will organically go to $1 billion this year but to do that, what we've done is we've made a significant investment in the software and cloud platform, and it means a different business model. The old business model that we had, you know, best way to understand is how we worked with the customer.
If a customer would order like 10,000 Wi-Fi boxes, for example, they would send that into us, then they would say, "Michael, I need 10,000, and I'm adding 500 subscribers a week. That's my logic on why I want 10,000." What we would do, and this was the company, you know, that I joined seven years ago from Salesforce, we would then ship. We would say, "You're doing 500 subscribers a week. That's fantastic. We're gonna ship you the 10,000," and that's it. There's no more interaction, we would expect the customer to go out and achieve those goals. The extent of our interaction would be, "Want more? Want more? Want more? Want more?" Right? The new business model is that as a platform and software company, they say, "I'd like 10,000.
I'm doing 500 a week." Our response is, "No, you're not. You're doing 100 a week." In fact, the reason why we can do that is because we put an appliance into your net, into the home and business. We understand it connects into the cloud, and we can see exactly what you're doing from an incremental monetization, but also when it turns up. In that scenario, we say, "You're doing 100 a week, and therefore we're not gonna give you 10,000. We're only gonna give you 8 weeks. We're gonna send you 800." More importantly, Sonic, let's talk about your goals. You'd actually like to do 500 a week. Let's talk about how do we get you to those 500 a week, because in the end, Calix is a data company.
This is what people don't really understand. The real-time behavioral analytics that we have inside of our cloud, which is about 15 TB and growing at a rapid rate every single week, gives us insight into how do you go from 100 to 500. We had a customer literally ask us that scenario recently, where they currently have 12,000 subscribers in a town of 20,000, and they said, "Our growth is slowing. We would really like to add more subscribers." Our customer success organization went in, did behavioral analytics based upon our Marketing Cloud, understood their go-to-market, their churn, their upsell opportunities. We also looked at their brand and how they were going to market. They were primarily speed-based, so changed their entire go-to-market strategy, and in eight weeks, they added 3,000 subscribers.
They basically went from 12,000 out of 20,000 to 15,000 out of 20,000. That 3,000 was us completely changing the outcome, where we helped them grow their business. Now the next stage with that customer is on top of that because we put those appliances into that home. We now have all these managed services on top of it, where we're now working with them saying, "Now where are all your upsell opportunities?" As we've said to our investors, the upsell opportunities once that appliance in is an incremental $1-$10 a month in revenue that is at about a 100% profit margin.
Essentially, you're the managed service for the service provider.
Yeah, right. Right. This is something they've always failed at. They've never been able to go beyond speed, right? We enable that in a huge way.
Yeah. Great. One of the reasons there's a lot of interest from investors in this broadband area in particular, which maybe you can say is again led by sort of focus on speed and sort of just connectivity overall, is the amount of government funding allocated to it.
Sure.
Your business model is obviously not contingent on that.
Right.
That does provide some opportunities. Maybe outline for us, how do you see the insertion opportunities sort of coming up as a result of this government funding?
Yeah, there's, you know, a lot of people are talking about that. I would take a step back and I would say our growth has been funded not by government funding. It's actually been funded by the segment that we're primarily focused on. What Cory said in January was that if we didn't add a single additional customer, we currently have 988 customers on our platform in one way, shape, or form. If we didn't add a single additional customer, we could grow at a healthy rate. The reason why is because the segment that we're serving is actually a huge target for private equity and family investment funds. KKR is buying up broadband companies. There's a company called Boston Omaha Broadband, who's been buying up broadband companies.
There's been this huge fuel of equity investment coming into it. At the same time, 42% of our customers are not-for-profits. They're cooperatives, whether they are telco cooperatives or electric cooperatives. To be really clear, electric cooperatives serve over 40 million households in the United States, and they have a ton of cash flow. We had one customer who funded a $300 million network build off of cash flow. That kind of underlying financial strength, which is completely separated from, you know, the macro things that are currently going on, is really strong. As I like to say, that $45 billion that's coming is like taking a big pile of gasoline and pouring it onto an already large bonfire, and it will roll out over the next 10 years.
That's how I would think about it, is that it just makes it even stronger, but the financial underpinnings below are very strong regardless of it.
Got it. Got it. For the tier 3, tier 2 broadband service providers, I think you call them as in your shareholder letters as the small and medium customers that you work with, how is this enabling them to compete better, or how is your service enabling them to compete better against incumbent tier 1s? In how many cases are they actually running into tier 1s in their regional markets? What are you sort of seeing in terms of their customers' success related to the big tier 1s?
They're all up against tier 1s, and they're eating them alive. You know, a tier 1's a big whale. You know, our customers actually with the platforms that we enabled, enables them to provide a wide breadth of services. As I said, AT&T has like an NPS that's negative. Our customers have all an NPS that's 50, 60, 70, or as I press released two weeks ago, 91. When you have that type of capability and the 11 managed services that we're offering and all of these incredible appliances that give you a very disruptive business model, it means that when they go head to head with an AT&T or someone like that, they crush them in their markets. The reason why is because no one likes to buy from those companies.
As a consumer, you just don't. If you have a local community-orientated broadband provider who has a really strong brand, that's in your community, they're involved in your local school, which we also expand out through our EDGE Room capabilities. They're actually working with the local community, for example, around mental health of children and all these different things, you're gonna buy from them. We, we think they're significantly advantaged. Then the other thing is, if you look at what's happening with the large telcos, it's the same playbook we see all the time is that with the interest rate rises that have happened, right? What do they do? Well, interest rates went up, now all of a sudden I've got three or four points that I have to cover. What do they do?
They cut CapEx, which AT&T and others have said, and they also cut headcount. On top of that, if you look at AT&T's results in Q1, they actually saw a decline in margin. Now I've got a double whammy of I also have to make up the fact that my margins have declined, so I gotta go cut more headcount and cut more CapEx to keep my profitability up, right? Our customers look at that as a massive opportunity. I literally sat down with a CEO about a month ago, and as we were sitting through it, we went through the nine towns that he's prioritizing and each of the different competitors that are in there, AT&T, you know, Windstream and a few others, targeted out them and said, "Who are you gonna overbuild first?
How do we go target them?" Then together, we actually went after those markets and said, "Okay, here's how we go build the business plan." That's what our customer success organization does. You know, some of our competitors, our customer success organization is bigger than their entire organization, right? That's because we can go lean in and build the entire business plan on how to, how to dominate a market. That's what, you know, that's what I brought from Salesforce.
Given all these dynamics, why aren't the tier 1s more receptive to the product? What do we need to see happen really for tier 1s to then start adopting the Calix product?
Tier 1s are political animals, right? They're exactly the same all the time. I, you know, I sold to them when I was at Microsoft 'cause I ran the big channel across Europe and those different things, I was at one, you know. I understand their ideas and what they like to do is they like to build. It doesn't matter how bad an idea that is, they have big budgets, they have executives who want to build. That's what their fundamental premise is. The simple reality is that as they get attacked by these companies. Because disruptions happen small up, our small customers are clearly disrupting. You know, I call small.
Small is zero to 250,000 service subscribers at $100 a month. That's a $300 million business, right? I had one of those service providers that actually just got a $520 million, you know, investment. I have another one who's actually in the process and will announce that they just launched a $700 million green bond, right? When I say small, it's not small. These are beast of companies that will be that next entire second tier and will take out the tier 2s that currently exist and who are slow. As that happens and as that disruption comes up, what'll happen is the tier 1s will have to start realizing that they have to be strategically aligned, as evidenced by Verizon.
Verizon is our customer. Why don't we have more tier 1s? Verizon is the only one who actually got it. They're strategically aligned. The whole narrative on what happened with Verizon six years ago, that's when I first came in to the company, was we said, "Look, we built this end-to-end platform that has never been built before." $1.2 billion invested. More importantly, 12 years of hard work to build it. It's not just a dumb prem system, it's actually the entire thing. It basically runs a broadband company. What Verizon did was they were gonna go and do this, build out their next generation network the same way they always built it, which was a bunch of dumb boxes.
We said, "Don't do the dumb boxes, put the platform in place, tied into the cloud with analytics, instrumentation, telemetry, and AI engines, and now you can run a fully automated network." They sole sourced the whole thing to us. You know, how big is Verizon? 100 million subscribers, right? Their entire fiber network will be Calix. Why did they sole source, which they never do? Because of the fact that it's gonna generate an 80% reduction in OpEx.
As they look at what they have to do over the long term, over the next 2 decades, when you have a margin gain against an AT&T who's running this disparate network, where they built all this garbage together, then they're doing a whole bunch of things in the end, you know, you have a huge gain because your margins are so large, which we've enabled. Then it comes down to, what do I wanna do on the EDGE? With our software platforms, they're unparalleled in the marketplace, so we have this flexibility. Will they do it? They will do it over time.
I mean, if I sort of think about the strategy then in terms of where you're allocating resources today and most of the investment, even as you build these customer success teams, to enable your customers, is really sort of the focus, let's build and expand with the tier 3s . They go and sort of take share from the tier 2s, and we'll wait for the next remaining tier 1s to come to us rather than saying, we push across all three segments for now, try to be investing in across all three. Is it more of saying, "Let's just focus on the tier 3s, everybody else will have to come to us over time?
I'll take it from a lesson that I learned from Benioff when I first joined there, when I first joined Salesforce. I joined Salesforce when it was a $3 billion company, you know, I run turnarounds, right? I got hired to go to Tokyo and run a turnaround. You know, the discussion that we had was, why would I go to Brazil when I can make more money in Minnesota, right? I think that really is the mindset of our company: focus, right? You know, when I first joined Calix, they had this strategy called pins in the map, trying to get to as many folks. No, we're a focused organization who has 16 quarters of beats and raises.
As we released to everybody here last week, we reiterated guidance that everything is strong, and the way we do that is through focus. To your point, we're not gonna go chase. You know, everyone chases the shiny nickel of the big logo. Who cares, right? Especially if it's crappy margins? Why would I go chase a tier 1 at like 15, 20 points margins? You're gonna go where the money is and where the profitability is and where you can have the most value. We will talk to tier 1s who understand, are strategically aligned to us, and understand our value, which is we're the best software and cloud platform that exists in this market, bar none, 'cause we're the only one who can actually do it end-to-end.
As they start to understand that, then we will work with them, and as long as they get strategically aligned, we'll agree to sell to them.
Okay. Okay, got it. Now let's unpack the growth here a bit because I think one of the questions I've got is, like, You've grown at, on an average of 28% over the last three years. How do you unpack that growth between new customers driving it or broadband service providers driving it versus sort of just scaling revenue per customer? That sort of maybe unpack that for us a bit, and then we can talk about the forward outlook there.
If we look at our growth drivers, there's three of them. One of them is adding new customers, two is adding more subscribers, and three is expanding our application and platforms. If I look at those three vectors, the one that drives the most growth is subscriber adds. We have nearly 1,000 customers that are, you know, on the platform journey with us, and every day they are just adding additional and incremental subscribers. That's where the, our largest growth driver comes from. Two is the application expansion. Once they start on 1 cloud, they'll adopt a second cloud, they'll adopt a third cloud, or they'll start with a one managed service, and they move to a second managed service. That's the second. The third driver is really add new customers.
I had said in January that, you know, we don't have to add any new customers, and we can grow healthily for the next few years just off the existing ones. We're not stopped adding new customers. We're always out there looking for incremental new subscribers, new customers 'cause they obviously are our future growth. That's how I would characterize the growth vectors for the company.
Okay. Can I just clarify the first one when you say more subscribers? Is it the customer going and signing more subscribers?
Yes.
A daily basis.
Right.
How much of that is onboarding more and more subscribers onto your platform where they do a rollout, but it's probably only some portion of their subscriber base that gets onboarded to your platform and the remaining remain on a legacy platform. As they go through a more of a rollout through the regions that they're in, they bring more subscribers on board.
Both. It's all of that.
It's both, right? Where we're unique is the fact that because we actually understand how to run their business, we actually lean in with them and help them. You know, it's easy to convert off of. Let's say they went and they made a mistake and they bought, you know, some competitor product, right? Over time, that'll migrate out. That's just the migration out, and we're not really gonna go push on that. Where we're gonna go spend our time and push on is actually what we're really good at, is actually doing market segmentation, understanding all the different elements of how you run your business. We've overlaid inside of our Marketing Cloud, demographics on top of behaviors.
With demographics allows us to do mapping around acquisition, and then our BI and our customer success team says, "Let's micro segment out that town. How are you gonna target each segment? By the way, how do you run your social media campaign? You know, currently you're getting 100 interactions on your Facebook page a week." We had one customer, that was the case, and with a bit of tweaking, all of a sudden they're doing 4,000 a week, right? That drove activation. That's where the focus is, helping them win. When we help them win, then what comes is that we just naturally succeed. We're not thinking about our own success. We think about their success, and then it just flows to us.
Okay. So.
Yeah. Then maybe the follow-up to that, you described the three drivers for the growth that you've seen historically.
Mm-hmm.
When you think about sort of the growth going forward, I think we noted this in our report that we published is you're not obviously stopping to go after new customers.
No.
The new customer count did sort of growth in that industry . You said you have 988 customers, I think. What does that sort of total market look like that you can go after? Does going forward it become more like two drivers instead of three because.
Well.
The third one becomes less of a priority.
Well, we have 2,000 customers, right? Of which 988 are on our platform.
Right.
Right? They have one of two elements of our platform. Our platform consists of two components, which is the Intelligent Access EDGE, which is all of the network consolidation, which is, by the way, like building a nuclear power plant, right? We consolidate all the functions that exist into a network into that. The second part, you know, link of our Cloud is everything we've done on the Revenue EDGE, which is what we're doing on inside the subscriber's home, but then also this massive opportunity where we, where we take the appliance and actually disrupt business. You know, 988 out of 2,000 existing customers. On top of that, the broader business, just if you take U.S. rural market, is 3,000 service providers.
Mm-hmm.
There's pretty significant growth inside of that. With regards to the 11, what we said was, you know, Q1 is always a bit slower from a, you know. Q1, what's fascinating for us is that the 11 were the ones with significantly more investment. They were way bigger. You can have one quarter that has 30, and they all have like $10 million, or you have 11 with, you know, a couple whales in there who have had, like I said, $520 million and $700 million, right? You know, which are you gonna take?
Okay. Great. Great. Talk about the sales and marketing sort of investments required here because you have a different go-to-market approach.
Yep.
Any of your competitors. Firstly, I think the first piece I wanted to understand is as you talk about the customer success teams, it also seems like you'd have to build out regional customer success teams.
We absolutely do.
The area.
Yep.
It does drive more sort of investment. Maybe outline that for us, and then we can sort of talk about how do you then think about those investments if eventually sort of five, 10 years down the line, you have tier 1s coming on board, then how would you think of that? Let's get to the first part.
You know, it's one of the first things I did when I joined, right? Which is implement a proper sales and marketing organization. Sales organization specifically, which is territory-based, so it was a sales rep with an engineer, right? As you get into highly complex products, because again, we do an entire end-to-end broadband business, right? We're not just a dumb prem or, you know, one component. What happens is you have a territory manager, and then you have, you know, a systems engineer who's on all of the network complexity, and then you have one who's doing end-to-end on the Revenue EDGE. That's not just Wi-Fi, that's actually data analytics, how do you integrate into your billing engine, all those different components. Those two parts.
Inside of it, every single cloud has a specialist. That specialist isn't, you know, just about our cloud. These people that we're hiring come from ServiceNow and places like that. You have someone on the call center. Like, when we go into a call center, we're actually not talking to you about how do you do, you know, the simplistic Wi-Fi analytics. We're actually, how do you set up your call center? What's your outbounding all those different elements. By the way, it also goes into what's the marketing element of your call center. We'll actually secret shopper our customers, things like that. The marketing is actually around behavioral analytics and segmentation. We have the most advanced behavioral analytics engine that exists in the world. It's as good as what Google.
This is what people don't understand, is that we're a data company. This is what I brought to the company when I first started. When I looked at what Calix was doing, I looked across everything and I'm like, "You don't realize what we have from a data point of view." Not to monetize it, because that's the stupidest thing ever, because then you're breaking privacy with your customers. It's actually to use those insights to help you build a better relationship. That's what we do with our customers, to help them understand, how do you take those insights and build that close relationship, which, you know, delivers that 91 NPS, right? You have someone on operations side. Operations is, again, this is what's unique.
I can go and I can kludge all this technology together, or I can just run it end-to-end and automate it. You know, I got picked up by Fortune with regards to my banning ChatGPT comment, right? What people don't actually realize is we've run GPT-1, GPT-2, GPT-3, we're running GPT-4, we run TensorFlow, we run, you know, the beta from Amazon that's going on, all these different components. That's what Operations Cloud is. It automates everything end-to-end. When you do, for example, a new service, it actually provision it automatically. It's never been done in the industry before, right? You have to kludge it all together. That's the complexity of what a sales team does. Imagine I'm a small service provider and, you know, if you're AT&T, you have thousands of people doing those things, right?
I'm a small service provider. I have 10,000 subscribers. Maybe I have 20 or 25 employees. The Calix army shows up. They say, you know, "Instead of you go building all this stuff out, we'll educate you on how to run your call center, we'll teach you how to run your marketing organization. We'll help you automate everything from a workflow and provisioning point of view, and that will generate massive margins in upsell and cross-sell. As you make money, we make money.
Sort of the next step there, so as let's say 10 years down the line, you've on-boarded your ones.
Yeah.
Does this marketing model scale where it gives you a lot more operating leverage, or how do you think about that?
I would actually see it. Having run, you know, big sales organizations across many companies, actually, when you're selling to tier 1, your sales and marketing is dramatically lower. Because the fact is that if you're selling into, you know, that same team, so the same team that's covering a territory.
Mm.
Is now covering a monster company. Therefore, your sales and marketing will actually go down when you go into tier 1.
Okay. Okay. Actually, let me check. Any questions in the room? Okay, let me continue. Couple of more near-term questions. You talked about the sort of the business model that your tier 3 customers have, and, they're not really sort of looking for credit at this point to fund some of their CapEx. What are your customer conversations like, particularly in this macro backdrop? Are any of them showing any hesitation in relation to spend, just given sort of the macro, what are you hearing from them? Just curious to hear that.
If they had a new market where they were, you know, they're waiting for government funding, they're obviously gonna say, "Hey, I'm gonna slow that down." A lot of them are looking at it as actually a significant opportunity. I talked about, you know, AT&T's cutting back on CapEx. I've had a ton of CEOs say to me, "Actually, this is a great opportunity. I'm gonna expand faster." It just depends on what their goals are. Again, if you look at a lot of these customers, their cash flows are so strong that they don't require external funding to do it. If you look at the rules of what's going on with rural broadband, actually you can go build it and then be, get the money after the fact.
There's a whole bunch of them that are actually saying, "I'm gonna go build it. I've submitted for the dollars. It hasn't arrived yet, but I'm not gonna wait. Then when it shows up, I'll just get recoup it." I had a customer who did that two weeks ago, actually. From a macro point of view, you know, if you say macro is government, you know, government's always slow, right? It usually takes longer than we anticipated, and it comes out as more than we expected, right? With regards to the broader macroeconomic-
Mm.
Our customers are very successful. You know, you look at the pandemic, what happened, you know, even with the whole back to work and all those kind of things, you saw massive migration out into rural markets. It's a lot more people working from home and all those different things. Demand is strong with their end subscribers. You know, there's no recession coming, I don't believe, right? You can't have full employment in a recession. Unless we start, I think it was Kevin O'Leary, he said, "Unless we start firing a whack of people, there's not gonna be a recession yet."
If it did come, actually, our customers are also highly advantaged, because if you think about your own personal and my personal discretionary choices, if I was not under economic pressure, I'm going to the theater, I'm going to restaurants, at the country club, you know, traveling a lot, all that kind of stuff. If you see a reduction in disposal income, what I'm gonna do, I'm gonna hunker down at home and what's central to everything? What's gonna be my broadband service provider. If that broadband service provider is offering me all of these incremental services, I'm gonna be consuming them 'cause I love them and I trust them. you know, I would say they kinda win both ways, and they're bullish.
Okay. One of the reasons for that question is, I think you've seen one of your primary competitors pre-announce before your earnings print, highlighting inventory rationalization by their customers. Effectively, one of your primary customers selling into the same customers that you sort of have in your group of customers. Why shouldn't investors be concerned about inventory position as it is to your platform products as well?
First of all, we reiterated guidance, right? Specifically for that reason, so there'd be no confusion. If you looked at our earnings, we pulled our earnings ahead a week. You know, we were kinda came out with our earnings at the same time as some of the best-run companies in the world, the banks and folks like that. A whole bunch of dogs came out, we reiterated after that to make sure there was clarity with regards to our performance, right? With regards to inventory, I will go back to the first story that I told you, which is we put an appliance into the home that connects into our cloud, and we know the difference between inventory and activations. Most important, unlike some of those people who announced that, they have no ability to change outcomes.
Our customers trust us. We've been doing this for 23 years, they know that through the good times and bad, we care about them. Most important, our business model is aligned to, we only get paid on the revenue generation when they get paid. In that type of scenario, we're so closely aligned, we have the biggest, you know, like I said, our customer success organization is bigger than some of the companies we compete with, right? We're in beside them every single day, helping them win. We know what their inventories levels are. Through the pandemic, we didn't let them hoard toilet paper because we knew the difference between what they were doing and what they wanted.
We're quite comfortable with regards to where we are because we're not the dumb box company that we were seven and 10 years ago.
Okay. In the time we have left, let's move to the services. The services that you are enabling your broadband service provider to sell directly to the subscriber.
Mm-hmm.
Maybe just give a quick overview of the nature of services that you're already enabling to sell to those subscribers. What's the plan there? Like, how broad-based will this rollout be? Is this again informed by the data that you collect on a day-to-day basis, and some are saying. These are the services that are going to be most popular to roll out.
Mm-hmm.
Hence we'll focus our energy on these 10 things that are.
Right.
Most important.
Well, you know, that's a really good point. How do we make the informed decision, right? If we started out with we have a Customer Advisory Board. We actually have six Customer Advisory Boards. One's a CEO Customer Advisory Board, then we have a whole bunch of others underneath it, actually based on segment. From that, we actually engage with our customers very directly on what are the challenges that they have in their business and what are the opportunities that our large R&D budget, right? Again, R&D budget's a $180 million-$200 million a year, bigger than the revenue of some of our competitors, right? You know, we actually are investing that, and it's on this platform that allows us to move at an incredibly fast pace.
The problem with that is we can move at a fast pace and do what our engineers want or what we can do is listen to our customers, right? We try to balance out those two things and come up with the right solutions. The other part of having a platform is that we're not hard integrating everything in. If something didn't work, we can actually kill it and move on to the next thing. We take that feedback, we go in and through partnerships, or if we decide to build it, we launch it, and if we've all agreed with our customers, this is what we wanna do, then we go forward. Honestly, our customers give us great ideas.
The concept of what we're doing with SmartTown, which is actually ubiquitous Wi-Fi enabled across a town, came from a customer who said, "If you look at COVID, one of the biggest challenges was that, you know, children who were in underprivileged homes didn't have access to broadband. Wouldn't it be great if we could actually take all of those broadband systems that are out there?" By the way, a Wi-Fi router is a microcell, right? If you have a platform in place, if you can convert that capacity into a ubiquitous Wi-Fi mesh and put something on top of it, like an educational roaming network that allowed an underprivileged child to leave their school and in a secure way, wherever they can get broadband, connect in and do homework, wouldn't that be a great solution? That's how SmartTown was born.
It was actually a call on, you know, July fourth, last, you know, two years ago, and we had it in market in eight months. You know, everyone else is gonna take two or three years to get that out. Eight months, we had it in pilot. As we go forward with all these solutions, it's gonna be what's your needs? Where do you see your market opportunity? A great example of that. Another example would be what we've done on SmartBiz, where that again, came from a customer who said, "I never wanna buy some of these. I never wanna buy Ubiquiti again. I never wanna buy those things.
I really want you to actually make this a managed service for us so that we can actually build out on top of it and monetize in the business." Starting with small, because enterprise class technology never scales down. That came from them. They said that, "Gotta have it, gotta have it, gotta have it." The third example would be they said, "Let's look at what Amazon's doing with regards to Sidewalk," which is this ubiquitous IoT network using LoRa radios. A LoRa radio, if you know what it does, it reaches like 15 mi for IoT switches. Again, that came from a customer. "I really would like to have that." We fast turned it and in seven months we'll have it out so that they can actually put in place a ubiquitous IoT network.
It's this constant collaboration with our customers at all levels that really keeps us, you know, really focused. To your point, we then take all the data that we have and the insights, again, that are theirs. We do not own the data. They own the data. It's their private data. It's that collaboration with them saying, "Hey, you think you should do this," but the, you know, the data supports that or the data says, "No, maybe we should do that." Right? It's a collaboration.
Got it. We'll be running up on time here, so I'll close it there.
27 seconds.
Yeah. Thank you. Thank you for coming to the conference. Thank you, everyone.
Thanks, Sami.
Thank you.