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.
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
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
"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
"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."