FatPipe Networks President and CEO Ragula Bhaskar has emerged over his 15 years in the industry as one of the most respected and listened to entrepreneurs in Utah. His company has survived its share of struggles to emerge as a real standout in the local high-tech community.

The Beginning

Bhaskar met his wife, Sanchaita Datta, known to all as "Sanch," while both attended graduate school at Penn State University. They later moved to Utah when Bhaskar was offered a position at the University of Utah.

Both worked in the early days of computer networking. Bhaskar found himself landing consulting work on a regular basis, so in 1989 he formed a consulting company, Ragula Systems Development. Bhaskar and Sanch later developed a line of networking LAN products initially funded from their own pockets and a group of greatly appreciated friends and family.

In 1997, the two developed an innovative protocol capable of dissecting data into various units, transmitting those units over separate data lines and then reassembling the parts to reform the original data on a remote site.

This new "multi-path" technology allowed customers to aggregate multiple sources of bandwidth (DSL, Cable, T1, T3, ISDN, wireless, etc.) to form a single virtual connection. A multi-path solution of data transfer offers greater security, scaleable redundancy and a dramatic increase in total bandwidth.

Security is increased since only part of the data is transmitted on each line - a potential hacker would have to access each of the lines simultaneously in order to access all the data. Each new source of bandwidth increases redundancy - if one of the data lines goes down, data is rerouted to the other operational lines virtually insuring no downtime for the network. Each new source of bandwidth adds to the total bandwidth, creating a cumulative effect of, well, a fatter network pipe. Many of their clients experienced a greater ROI due to the ability to aggregate many low-cost bandwidth sources into one large, high-speed source.

After realizing the great potential of multi-path technology, Bhaskar and Datta went to work on products unitizing this new technology and phased out their LAN products. After constantly using the term "Fat Pipe" to describe the aggregate effect of their multi-path technology, they decided to change the name of the company to FatPipe Networks in 1999 in order to reflect their newfound focus.

A Penny Saved

Beginning in 1994 through 2003, FatPipe Networks received a total of $13 million in venture capital funding in three rounds. The most recent round should see the company through its current phase of ramping up sales and developing new products. That money is sure to last as long as planned, thanks to FatPipe's policy to spend money sensibly.

One unique trait not always seen in VC-funded entrepreneurs is Bhaskar's ethical commitment to be frugal with his investors' money. "For me personally," says Bhaskar, "if I take money from you, I have more than just a legal obligation, but also a personal obligation to spend that money even more wisely than I would spend my own money. It's a personal philosophy."

At FatPipe, every dollar spent must be justified. The company operates under what Bhaskar calls the "zero budget" model. "The bad thing about giving people a budget," he says, "is that they feel the allocated money must be spent. At FatPipe, everything must be justified. When you ask me for money, you have to tell me what you will get out of it. We try to be very careful about spending money. If you look at our staff, we don't have too many vice presidents or bloated departments. When we travel, we stay at Holiday Inn Express."

Walk into a FatPipe office and the philosophy becomes clear. No Herman Miller furniture. No FatPipe logo-shaped reflecting pool and fountain in the lobby. No swanky Class A high-rise office space. Customers rarely show up at FatPipe's headquarters in Salt Lake City or its branch offices in the UK and India - so FatPipe spends its money on R&D, not office space to impress clients.

Bhaskar admits it can be challenging to be so frugal, especially right after receiving a round of financing. "After you have raised money," he says, "that's when you need to be the most careful spending it. There are many competing interests for that money. If you don't keep your focus, you can very quickly go through the money without having achieved anything."

"If you take care of your money," he continues, "then you don't have to go around and ask for more money as often. From my observations, most companies that fail don't go under due to bad technology or people; it is because they have bad financial sense. They need to understand cycles - how long does it take to get a product to market? How long does it take to get a product known in the marketplace? It never happens in the way that you want it to happen."

Bhaskar always makes certain that there is at least eight month's worth of operating capital in the bank. It's this philosophy of parsimony that likely helped FatPipe weather the dot-com bust, 9/11 and the recent recession. His strategies seem to be paying off. The company just celebrated its third consecutive profitable quarter.

The Last Mile is the Longest

FatPipe's solution for providing low-cost network redundancy helps alleviate the dreaded "last mile" problems associated so often with network downtime.

The term "last mile" refers to the stretch of cable running from a telecommunications company's central office to its final destination. This last stretch is largely out of the telco's control and subject to a variety of potential assaults that can spell disaster to a cable - power outages, wayward backhoes, weather damage, natural disaster and human error.

FatPipe's products allow customers to combine multiple bandwidth sources. If one source goes down, the other sources seamlessly share the load and keep the network up - welcome news to any CTO wishing to avoid frantic calls of "the network is down."

"As companies and individuals become more reliant on their Internet/WAN connections to deploy mission critical applications or simply to perform daily tasks, needs or wants," says Bhaskar, "the easier it is for FatPipe to sell its router clustering products that provide the highest level of redundancy, reliability, additional speed and security for WAN transactions."

Corporate America's Harsh Lesson on Redundancy

In an interesting turn of events, 9/11 actually ended up helping FatPipe's sales a bit. As with most companies, the post-9/11 recession caused the company's net sales to decrease. However, the downturn was mitigated somewhat by the glaring need for system redundancy and security 9/11 engendered in corporate America.

"One of the largest switches in the United States was obliterated on 9/11 because it was situated near ground zero," says Bhaskar. "Thousands of companies and residents could not use landlines for voice or data services for weeks because they were only connected to this one switch (last mile connections). Since FatPipe's technology allows a company to combine multiple bandwidth sources, those of our clients that had integrated FatPipe products before 9/11 had their networks automatically failover to alternative and available ISP services and were not suffering like the other companies that only had one line out to the Internet. 9/11 reminded companies that corporate networks can easily be compromised from a security standpoint and that disaster may strike when you least expect it.

Will the Long Road End?

Where will FatPipe be five years down the road? Certainly it is a prime candidate for acquisition. While Bhaskar recognizes this, he would like to keep FatPipe its own entity and to stay at the helm through its growth phases - though he notes the inherent difficulties faced by Utah companies wishing to grow from around the $10 million a year to $100 million a year size.

"We would need qualified, talented people and additional financial resources to grow FatPipe into a $100 million-a-year company," Bhaskar says. "As for selling the company, well, at this point, we are focused on making the company successful at dominating the market. We have the best product and the largest market position. We want to continue that thrust. Would we be able to hit $100 million a year in the state of Utah? Yes, with the right resources."